The banking sector steadily improved and recovered after the sharp decline of the index this week (2.14-2.18), and the price to book ratio was lf0.5 as of the last trading day of this week 66pb, slightly lower than last week’s valuation and lower market heat, with an average daily trading volume of 843.588 billion yuan (Mom – 7.63%). This week, the central bank’s wide caliber (including 7-day reverse repo, 14d reverse repo and mlf365d) net returned 150 billion yuan, the 7-day reverse repo interest rate remained at 2.10%, and the overall liquidity was at a good level; On Friday (February 18), it was announced that the weighted value of dr007 was 2.09%, close to the reverse repurchase level, with good overall liquidity and good conduction of interest rate guidance level.
At the beginning of the second week after the festival, the banking sector adjusted, and the strong repair in the second half of the week strengthened the valuation and increased confidence. At the beginning of the valuation of China Citic Bank Corporation Limited(601998) sector this week, due to the excessive increase last week, with the escalation of overseas “Russia Ukraine crisis” and the hidden dangers of overseas bonds of some real estate enterprises affecting market expectations, the banking sector experienced a significant correction on Monday and Tuesday. However, we can see that the overall external risks are controllable. Recently, many banks have provided support for real estate M & A financing. For example, the securities times mentioned that Industrial Bank Co.Ltd(601166) recently plans to issue real estate project M & A bonds with an amount of no less than 10 billion yuan. This is another project providing real estate enterprise M & A financing funds after Guangfa bank, China Merchants Bank Co.Ltd(600036) and Ping An Bank Co.Ltd(000001) , and the real estate industry M & A events continue to increase, The survival of the fittest and industry concentration of the corresponding real estate enterprises will be improved, and the benign development of the industry will continue to boost the upstream and downstream demand and reduce the expectation of bad bank assets. At the same time, we believe that the current valuation level of the banking sector is still at the bottom of the historical valuation level, and there is a lot of room for improvement in the future. In the follow-up, it can still have the value of absolute return improvement and run out of the opportunity of relative excess return. It is recommended to pay active attention.
The ability of wealth management has been deepened and improved, and the background of bank “credit” value is more sufficient. On February 17, the International Monetary Research Institute of Renmin University of China released the evaluation report on China’s wealth management capability (2021), and listed the top 100 institutions with wealth management capability. Among them, China Merchants Bank Co.Ltd(600036) ranks first with the total holding scale of public wealth management products of 2527.7 billion yuan, followed by Industrial And Commercial Bank Of China Limited(601398) , China Construction Bank Corporation(601939) , Agricultural Bank Of China Limited(601288) , Bank Of China Limited(601988) , Bank Of Communications Co.Ltd(601328) , Industrial Bank Co.Ltd(601166) . Internet agency ant Fund ranked eighth. China Citic Bank Corporation Limited(601998) , Shanghai Pudong Development Bank Co.Ltd(600000) also ranked among the top ten. According to the report, the multi-channel pattern of wealth management is gradually becoming, and all parties complement each other’s advantages to jointly promote the development of the wealth management industry. The overall index of China’s asset management industry increased by 578% from 2013 to the fourth quarter of 2021, showing a fluctuating upward trend. While making full credit endorsement, the banking industry actively grasped the path of digital economy to help deepen wealth management, so as to inject more upward momentum into the improvement of bank big wealth management. The bank’s valuation was improved and its profit expectation was good, maintaining the “recommended” rating.
Market performance
The banking sector index fell 1.09% this week, weaker than the market. This week, the Shanghai Composite Index rose 0.8%, the Shenzhen Component Index rose 1.78%, the gem index rose 2.93%, and the Shanghai and Shenzhen 300 index rose 1.08%. It is suggested to focus on high-quality joint-stock banks ( China Merchants Bank Co.Ltd(600036) , Industrial Bank Co.Ltd(601166) , Ping An Bank Co.Ltd(000001) ), large undervalued state-owned banks Postal Savings Bank Of China Co.Ltd(601658) , China Construction Bank Corporation(601939) and high-quality urban and rural commercial banks ( Bank Of Ningbo Co.Ltd(002142) , Bank Of Jiangsu Co.Ltd(600919) , Bank Of Chengdu Co.Ltd(601838) , Bank Of Chongqing Co.Ltd(601963) , Bank Of Hangzhou Co.Ltd(600926) , Bank Of Shanghai Co.Ltd(601229) , Shanghai Rural Commercial Bank Co.Ltd(601825) and Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) , Jiangsu Zhangjiagang Rural Commercial Bank Co.Ltd(002839) ).
Risk tips
Repeated epidemic risk, tightening monetary policy, increasing risk of non-performing rate, outbreak of major risks and events of default, etc.
