Under the expectation of “wide credit”, the banking sector has continued its strong performance since the beginning of the year. Under the “triple pressure” on the economy, the “steady growth” policy began to work gradually, and the expectation of “wide credit” rose accordingly. The main driving forces on the investment side are overweight, infrastructure projects are ahead of schedule, and the marginal warming of real estate policies is superimposed. The overall fundamentals of listed banks are high-quality, and the sector valuation and institutional position ratio are relatively low. The banking sector has performed strongly since late December 2021. From the beginning of the year to February 18, the closing index rose by 7.6%, outperforming the Shanghai and Shenzhen 300 index by 13.40pct, At the same time, good absolute and relative returns were recorded. Among them, Chengdu (+ 23.0%), Xingye (+ 20.2%), Changshu (+ 19.1%), Jiangsu (+ 18.7%), Hangzhou (+ 18.3%), Sunong (+ 16.0%) and Nanjing (+ 15.0%) led the increase; On the whole, the performance of high-quality regional urban rural commercial banks is more prominent.
The trend of the banking sector in the past decade after the resumption of trading. The rising stage of bank stocks is mostly in the process of macroeconomic bottom recovery and transmission from “wide currency” to “wide credit”, which is highly related to credit expansion. In January this year, the credit increment hit a record high, boosting market confidence, but there are still structural problems behind the higher than expected total amount. The market expects the “wide credit” policy to be further overweight; At the same time, the real estate stability maintenance policy began to shift to the demand side, the industrial policies for stabilizing investment were released one after another, and the relevant “steady growth” measures are expected to be launched continuously in the future, which will enhance the market’s expectations for the continuous improvement of “wide credit” and promote the pro cyclical performance of the banking sector.
Based on the performance of the four capital indicators at this stage, it is expected that the rising market of the banking sector is not over yet:
Indicator 1: main capital inflow trend at present, the active net inflow scale of main capital in the banking sector is in an upward cycle. The monthly peak of the three-month rolling average of the active net inflow scale is 784 million yuan, while the monthly peak of the previous upward cycle is between 3.93 billion yuan and 11.323 billion yuan. The active net inflow scale is still expected to achieve further growth. Since the beginning of the year, the main funds have made a significant net inflow, and most of the targets are urban and rural commercial banks in high-quality regions such as Jiangsu and Zhejiang.
Indicator 2: the allocation of funds in the North has shown an obvious willingness to increase positions in the previous rising stages of the banking sector. The monthly peaks of the allocation proportion of the banking sector in the last two rising rounds are 10.4% and 8.4% respectively, with a lower increase of 4.4pct and 2.5pct. Compared with the historical situation, the current market value proportion of northbound funds to the banking sector is still at a low level. As of February 18, the allocation proportion of northbound funds to banks was 8.7%, with a low increase of 1.99pct, which is in the quantile of 39% in history. In the future, the position proportion is expected to be further increased.
Indicator 3: position level of public funds 4q21 the position ratio of active partial equity funds to the banking sector is 2.80%, which still has room to improve compared with the average level of 3.93% in the past five years. The over allocation ratio of active partial equity funds to banks is the lowest in the whole industry, only – 7.96%. In history, low allocation has ushered in rising prices for many times.
Indicator 4: since the beginning of the year, the peak monthly turnover rate of the banking sector has been 0.86%, and the average monthly peak turnover rate in the rising stage of the previous banking sector is 1.23%; The transaction over allocation level is also in a moderate upward channel. Since the beginning of the year, the peak level of monthly growth of the banking sector is only 0.76%. After the average rapid upward stage of transaction over allocation in the previous round of rise, the average level of peak growth is close to 2%. At present, the trading sentiment of the banking sector is reasonably low, and there is no risk of excessive speculation.
Investment logic and suggestions of bank stocks: in the process of “wide credit”, the market of bank stocks may be accompanied by the whole process of “stable growth”. We continue to be optimistic about the pro cyclical performance of the bank sector. Relatively stronger, adjust the main line of stable operation of local banks in high-quality regions such as Jiangsu and Zhejiang, and focus on Nanjing, Hangzhou, Jiangsu, Changshu, Bank Of Chengdu Co.Ltd(601838) . In terms of capital flow, the main funds and active partial equity funds prefer urban and rural commercial banks in high-quality areas, such as Changshu, Zhangjiagang, Bank Of Chengdu Co.Ltd(601838) , and appropriately increase their positions for large state-owned banks; Northbound capital also shows some of the above characteristics, but relatively prefers high-quality joint-stock banks such as China Merchants Bank and Societe Generale.
Risk warning: the economic growth rate is lower than expected; Real estate risk situation disturbance; There is a risk of failure of historical data; The financial profit transfer to the real economy exceeded expectations.
