Market review of the past week
The rise and fall of major indexes in the past week (2.14 – 2.18): Shenwan banking industry index (- 1.10%), Shanghai Composite Index (0.80%), Shenzhen Component Index (1.78%), gem index (2.93%), Shanghai and Shenzhen 300 (1.08%). Among the 31 primary sub industry indexes of Shenwan, the banking industry ranked 29th in terms of rise and fall.
In the banking industry, the four secondary sectors showed varying degrees of decline, including large state-owned banks (Shenwan) (- 0.97%), joint-stock banks (Shenwan) (- 1.12%), urban commercial banks (Shenwan) (- 1.34%) and rural commercial banks (Shenwan) (- 0.233%).
Key investment points
(1) the credit easing policy continues to release liquidity, which has a favorable support for the banking industry. In January, the growth rate of social finance exceeded expectations. The new social finance increased by 984.2 billion yuan year-on-year, M2 increased by 9.8% year-on-year, and RMB loans increased by 3.98 trillion yuan in a single month, the highest in a single month. The top priority of economic work in 2022 is “stability”. The policy continues to increase, and the market liquidity improves steadily, which has a favorable support for the banking industry.
(2) the real estate risk is gradually cleared, and the policy side is conducive to the recovery of residents’ credit. In the context of adhering to the policy of “housing without speculation”, the financing difficulties of the real estate industry have been improved in stages, and the risks have been gradually cleared away; The reasonable housing demand of residents is encouraged by the policy, and the housing loan policy shows the development trend of regional differentiation and rationalization. The scale of resident credit is expected to continue to rise in the first half of the year and strengthen the fundamentals of the banking industry.
(3) continue to be optimistic about the performance of bank stocks. We believe that under the background of “stable growth”, active fiscal policy and prudent monetary policy will become the dual driving force for the performance of the banking industry in the next stage. Combined with the gradual liquidation of risk assets in the banking industry, the fundamentals will be more stable. Relevant stocks with high growth, high-quality assets and deep business moat are expected to receive more market attention.
Investment advice
Recommended targets: China Merchants Bank Co.Ltd(600036) *, Postal Savings Bank Of China Co.Ltd(601658) *, Industrial Bank Co.Ltd(601166) *. (*: no deep coverage yet)
Risk tips:
Deterioration of the epidemic situation; The policy effect is less than expected; Concentrated outbreak of adverse events.
