Tracking the steady growth of infrastructure in all provinces: the GDP target of most provinces is more than 5.5%, and major projects are overweight.
1) 32 provinces and municipalities directly under the central government have announced the GDP growth target for 2022, and most provinces have set the target of more than 5.5%. Among the 32 provincial administrative regions, 29 provinces are higher than or about 5.5%, 21 provinces are higher than or about 6%, and 26 provinces are higher than the average growth rate in the past three years. In terms of regions, the growth target of most provinces in the central and western regions is more than 6.5% (such as about 6.5% in Sichuan, about 7% in Hubei and more than 6.5% in Hunan), and the growth target of developed regions is at least more than 5% (about 5% in Beijing, about 5.5% in Shanghai, about 5.5% in Guangdong, more than 5.5% in Jiangsu and about 6% in Zhejiang). From this perspective, it is expected that all regions will maintain reasonable GDP growth and steady growth in 2022;
2) from the perspective of major project planning: at present, 11 provinces have announced major provincial projects in 2022, with a total of 14000 (a year-on-year increase of 730). It is expected to complete an investment of 5.8 trillion yuan in 2022 (a year-on-year increase of about 360 billion, + 6.5%). Among them, Zhejiang Province and Henan province plan to invest about 1.1 trillion and 2 trillion, with a higher total investment in each province. The investment demand of provinces in developed regions has increased steadily. For example, the planned investment of Beijing and Shanghai (280.2 billion and 200 billion) has increased by more than 10% year-on-year, and that of Zhejiang Province has increased by 35% compared with 2020 (the data of 2021 has not been publicly disclosed yet). In terms of project types, most regions focus on infrastructure and urban construction (there are 226.7 billion transportation and social facilities projects in Zhejiang, 216.2 billion infrastructure projects in Jiangsu and 213.2 billion urban upgrading projects in Chongqing) and industrial projects (368.7 billion high Shenzhen New Industries Biomedical Engineering Co.Ltd(300832) projects in Zhejiang and 2015 billion industrial projects in Jiangsu). On this basis, a number of green related projects have been planned Digital infrastructure and other projects (for example, Zhejiang plans 154 major projects in the fields of ecological environmental protection, urban renewal and water conservancy facilities, with a planned investment of 501.8 billion yuan within the year)
(Note: the current disclosure is the estimated plan for the whole year of 2022, and the actual implementation and rhythm may be different in different regions. For example, it is expected that many regions may be implemented in advance and concentrated).
ABS high-frequency data track the quality of retail assets: the unemployment rate of residents in 21q4 increased, and the non-performing rate of consumer loans and credit cards increased slightly. We counted five bank credit cards and consumer loan ABS products issued since China Merchants Bank Co.Ltd(600036) , Ping An Bank Co.Ltd(000001) , Bank Of Ningbo Co.Ltd(002142) , Bank Of Hangzhou Co.Ltd(600926) 2020 and still in renewal to track the asset quality trend of bank retail loans in the near future. We found that:
1) the proportion of overdue loans of ABS products of 21q4 bank increased from 2.41% at the end of September to 3.24% at the end of December, and all banks increased to a certain extent. Month by month, the single month increase in December was 0.44pc, which was also significantly higher than that in October and November. The total default rate of the current period increased by 0.15pc to 0.37% compared with that at the end of September, and all banks increased to a certain extent.
\u3000\u3000 (Note: compared with the quality of assets in bank statements, the assets that are not overdue will be withdrawn from the asset pool due to no new assets and no write off, but the overdue assets will eventually remain in the asset pool. Therefore, generally, the overdue rate will increase with the growth of ABS duration. Therefore, compared with the absolute value of the overdue rate, the growth range of the overdue rate and the default rate of the current period The change of is more important.) 2) The quality risk of bank retail assets has increased, or in part due to the weak economy, the unemployment rate of residents in 21q4 has increased. At the end of December, the urban survey unemployment rate and the unemployment rate of people aged 25-59 have increased by 0.2pc to 5.1% and 4.4% respectively compared with September. From the historical data, the correlation between residents’ unemployment rate and the quality of retail assets is also relatively high.
3) however, we also observed that the data of China Merchants Bank Co.Ltd(600036) two ABS products in January 2022 have been updated (other banks have not updated yet). The current default rate of China Merchants Bank in January has decreased significantly by 0.21pc to 0.28% (back to the level in September) compared with that in December, and the proportion of loans overdue within 90 days has also decreased significantly by 0.28pc to 1.11% (lower than the level in September), or it is related to the improvement of residents’ cash flow near the Spring Festival, In the future, as the economic effect of the policy underpinning continues to appear, if the resident unemployment rate can be improved, the quality risk of bank retail assets is expected to be improved. We will continue to track and observe.
The national development and Reform Commission issued a document to support the industrial economy and service industry and stabilize the basic economic situation. On Friday, the national development and Reform Commission issued the notice on printing and distributing some policies to promote the steady growth of industrial economy and some policies on promoting the recovery and development of difficult industries in the service industry. It will support the recovery and development of difficult industries in the industrial economy and service industry by reducing taxes, stabilizing prices and guiding financial institutions to increase support. 1) “Financial profit transfer” is mentioned again in the document, but it has been basically reflected in the past policies, and the new requirements for financial institutions are limited. Generally speaking, it includes: A. continue to give full play to the policies of implementing the previously existing RRR reduction funds, the two major tools directly to entities and carbon emission reduction support tools, and increase the investment in manufacturing (especially medium and long-term), Inclusive Finance and green finance loans; B. Implement the downward trend of LPR, promote the continuous downward trend of real loan interest rate, and urge banks to reduce other charges for small and micro enterprises (LPR has been reduced twice since December 21, which will drive the bank’s loan interest rate to decline in 2022, but after taking into account the release of dividends from deposit self-discipline mechanism and the availability of reduced reserve requirement funds, it is expected that the bank interest margin will remain stable throughout the year); C. We will strengthen the assessment of bank loans invested in manufacturing, promote large state-owned banks to optimize the allocation of economic capital and favor manufacturing enterprises. 2) The two documents have indeed increased support in tax reduction and fee reduction (such as guiding Internet platforms to reduce the operating costs of catering enterprises, continuing the value-added tax plus Deduction Policy of service industry, and increasing the pre tax deduction of equipment and appliances of small, medium-sized and micro enterprises). These policies help to alleviate the operating pressure of industrial and service enterprises (conducive to the stability of the loan asset quality of bank related customers), Stimulate entity operation and investment demand (increase relevant credit demand).
Market tracking of personal loan non-performing assets transfer: 1.403 billion yuan was issued in January, which was relatively stable as a whole.
After the implementation of the notice on carrying out the pilot work of non-performing loan transfer in 2021, large state-owned banks + joint-stock banks can apply in yindeng center to pilot batch transfer of personal consumption loans and business loans, and broaden the disposal channels and methods of non-performing loans. After one year’s pilot, practice and accumulated experience, the auction, pricing, trading and transfer market of personal loan non-performing transfer market has become more mature and perfect, and the dividend is gradually released. At present, according to the follow-up:
1) volume: since the beginning of 2021, 13 banks have issued a total of 57 products, with a total transferred out loan principal of 2.363 billion yuan and principal and interest of 6.878 billion yuan. Among them, 6 products (all Ping An Bank Co.Ltd(000001) ) were issued in January 2022, with a total principal and interest of 1.403 billion yuan, which is relatively stable (equivalent to the average base of 21q4);
2) price: the highest discount rate (starting price / loan principal) of the asset package reached 40% in June last year. At present, it is basically stable at about 10% (the actual transaction price is gradually formed by the buyer’s bidding, and no public data has been found). The market pricing is gradually becoming reasonable and stable.
Sector View: at the current time point, we are actively optimistic about the banking sector.
1. From top to bottom, from the perspective of industry logic: no matter how the current market environment evolves, the sector deserves active attention.
1) at present, the policy direction of “steady growth” and “moving forward” is relatively clear. The social finance data in January alleviated the early market’s concern about the lack of credit in January, and the medium and long-term loans of enterprises have increased year-on-year (an increase of 60 billion yuan year-on-year in January, and an average decrease of about 220 billion yuan per month year-on-year in the past six months). This week, relevant policies continue to be overweight, such as issuing reform documents to support industry and service industry, infrastructure projects around the country are constantly being implemented and promoted, and media reports such as surging real estate reported that the regulatory documents of pre-sale funds are being implemented. 1 In the general direction, the trend of policy driving economic stabilization and improvement is certain, which will become the key to supporting the valuation repair of the banking sector.
2) there is no need to worry too much about the impact of the interest rate cut on the bank’s net interest margin: Although the interest rate cut affects the bank’s loan yield, considering the reform of deposit self-discipline mechanism and the reduction of reserve requirement, we calculate that the bank’s interest margin will remain basically flat in 2022.
3) the central bank pays more attention to overseas inflation. If the future policy is disturbed by overseas interest rate hikes, bank stocks often have excess returns. Bank stocks are also stocks, and the DDM model is also applicable. Due to the tightening of liquidity expectations and the fear of credit risk exposure, they may “cover the decline”. However, due to the upward expectation of interest rate, bank stocks can often obtain relative returns.
2. From the bottom up, three main lines are recommended for individual stocks, and “small stocks” are selected β Portfolio “: robust leading stocks ( Bank Of Ningbo Co.Ltd(002142) , China Merchants Bank Co.Ltd(600036) ), banks with undervalued retail characteristics and improved operation ( Postal Savings Bank Of China Co.Ltd(601658) , Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) , Ping An Bank Co.Ltd(000001) ), high-quality small and medium-sized banks with expansion flexibility and strong willingness to convert convertible bonds into shares ( Bank Of Nanjing Co.Ltd(601009) , Bank Of Chengdu Co.Ltd(601838) , Bank Of Hangzhou Co.Ltd(600926) , Bank Of Suzhou Co.Ltd(002966) , Jiangsu Zhangjiagang Rural Commercial Bank Co.Ltd(002839) ).
Regular data tracking: 1) interbank certificates of deposit: A. volume: according to wind data, the issuance scale of interbank certificates of deposit this week was 0.46 trillion yuan, a decrease of 0.33 trillion yuan compared with last week; Since February, the issuance scale of interbank certificates of deposit has been 1.26 trillion yuan, with a month on month increase of 0.47 trillion yuan; B. Price: the issuing rate of interbank certificates of deposit this week was 2.44%, up 2bps from last week; So far this month, the issue interest rate is 2.44%. 2) Trading volume: the average daily turnover of stocks this week was 0.84 trillion yuan, down 69.733 billion yuan from last week. 3) Two financing: the balance of two financing is 1.72 trillion yuan, a decrease of 0.42% compared with last week.
4) fund issuance: this week, non monetary funds issued 5.800 billion shares, a decrease of 5.186 billion from last week. Since February, a total of 16.787 billion shares have been issued, a decrease of 213.722 billion from the same period last year. Among them, the stock type was 2.019 billion, a year-on-year decrease of 13.489 billion, and the hybrid type was 8.679 billion, a year-on-year decrease of 183.497 billion.
5) Bill interest rate: the 3-month discount rate of bank notes of large state-owned banks + joint-stock banks this week was 2.49%, down 3bps from last week; So far this month, the interest rate is 2.50%, down 20bps month on month The three-month bank note discount rate of urban commercial banks was 2.58%, down 2bps from last week, and the interest rate so far this month is 2.59%, down 27bps from last week 6) Issuance scale of local government special bonds: 53.737 billion new special bonds were issued this week, a decrease of 3.484 billion from last week. Since the beginning of the year, 782.117 billion local bonds have been issued. The amount of local bonds approved in advance in 2022 is 1.46 trillion. 7) 10-year Treasury bond yield: the average 10-year Treasury bond yield this week was 2.79%, down 5bps from last week.
Risk tip: the risks of real estate enterprises erupt intensively, and the macro-economy goes down; The promotion of capital market reform policy is less than expected; The sales of guaranteed products of insurance companies were lower than expected.
