Key investment points
Current financial services. 1. Financing scale: nearly 15 trillion yuan of green credit; Green bonds 1.62 trillion. The stock of green loans accounted for 7.8% of the total loans. The balance of green bonds accounts for 1.3% of the stock bonds in the whole market. 2. Distribution of main industries of Green Credit: green transportation projects account for the highest proportion, 36.3%; Followed by renewable energy and clean energy projects, accounting for 19.4%, accounting for 55.8% in total. Among them, the green transportation is mainly railway transportation and urban rail transportation. Renewable energy and clean energy are mainly invested in wind power and hydropower projects. The bank is optimistic about the future industrial direction: it is most optimistic about the clean energy industry, which is the focus of attention of all banks at present. It is believed that the main business volume in the future will be reflected here. The second is the energy conservation and environmental protection industry, but it will be relatively scattered compared with the clean energy industry. The layout of carbon emission reduction technology is a little early at the current stage, and the demand may emerge more after the carbon peak and in the 30-year process of carbon neutralization. The railway transportation in the transportation project is expected to have limited growth space in the future. 3. Main service customers: large and medium-sized state-owned enterprises and central enterprises; The average household credit scale is more than 55 million yuan. 4. Market competition: large banks have the highest market share in the traditional credit and bond underwriting business, with the advantages of large customers and capital cost. Joint stock banks have product advantages, flexible mechanism and strong comprehensive financial service ability in off balance sheet financing. At present, the participation of small banks is low. 5. The problems of Green Credit: information asymmetry, risk and income asymmetry. Compared with higher income real estate projects, the price comparison effect of green credit is not high.
How banks do green finance. 1. Organizational structure, assessment and incentive mechanism. Organizational structure: establish franchise institutions from the head office branch sub branch level from top to bottom. Assessment and incentive mechanism. Appraisal: set KPI. Incentive mechanism: give preference to the occupation of new economic capital for green loan projects. Internal fund transfer pricing (FTP) is preferential. The provision for impairment of green credit is inclined. 2. How to screen customers: list management and one vote veto system.
3. Risk assessment: in addition to credit risk assessment, banks will comprehensively consider the environmental risks of enterprises when issuing green credit. 4. Pricing and risk control. The average interest rate of green credit is not high. The public welfare attribute is strong, with the majority of large enterprises, and the industry average pricing is about 4.4%. The overall asset quality of green loans is better than that of overall loans. By the end of 2020, the non-performing rate of green loans was 0.33%. At present, there is no default on the green bonds issued. 5. Products and services. The main forms of green loans include working capital, project loans, PPP mode and syndicated loans. Collateral is also constantly innovating: sewage treatment charge right, sewage discharge right, energy use right, water use right, carbon emission right, etc. Other financial products and services are also gradually enriched: several large banks have built a diversified financial service system to provide diversified and multi-level comprehensive financial services for green industries through loans, bonds, funds, leasing and other means.
Future policy and space measurement. The policy dividend period is long. At present, most industries in low-carbon transformation are still in the period of policy subsidies, and market-oriented policies are needed to encourage and promote industry development: market-oriented policies such as reducing capital occupation and reducing the proportion of venture capital provision of green assets encourage banks to increase credit. Market space measurement: 1. The market space is at the level of one million billion. In the next 30-40 years, the compound growth rate of green assets can be maintained at 6.3% – 8.2%. According to the research of the Institute of climate change and sustainable development of Tsinghua University, in order to achieve the goal of “the increase of global average surface temperature is no more than 2 ℃ than before the industrial revolution”, the total investment demand from 2020 to 2050 will reach 127 trillion yuan. 2. Investment opportunities in major industries: energy supply and transportation. Clean energy supply end, electrification and hydrogen energy consumption end are the path to achieve the dual carbon goal. In order to achieve the emission reduction target, the research of the Institute of climate change and sustainable development of Tsinghua University shows that under the 2 ℃ scenario, the total investment demand from 2020 to 2050 will reach 127 trillion yuan, of which the total investment demand of the energy supply sector is the largest, 99 trillion yuan, accounting for 78%; The second is the transportation sector, with a total investment demand of 17.6 trillion yuan, accounting for 14%.
The impact of Green Finance on investment banking stocks. 1. The energy revolution promotes economic transformation, traditional industries usher in supply side reform, and emerging industries create new consumer demand, which is likely to promote a new round of economic cycle. 2. Can scale smooth the decline of bank asset growth? In the medium and long term, it is expected that green assets are more used as a supplement to the industrial system for structural optimization and adjustment, and it is less likely to completely replace real estate as the basis for credit creation. It is estimated that the proportion of green assets in total loans in 2060 is expected to be about 20%. 3. Green finance can alleviate the overall pressure on asset quality in the future. The switching of industrial cycle will increase the marginal pressure on asset quality of banks, but banks have the ability to change time and space. With the rise of Shenzhen New Industries Biomedical Engineering Co.Ltd(300832) , banks have surplus profits to digest the burden of the past. In addition, from the perspective of systemic risk, the risk pressure of the banking system is actually weakening. With Shenzhen New Industries Biomedical Engineering Co.Ltd(300832) the optimization of asset structure, the systemic pressure of economy is decreasing. 4. Green finance can enhance the valuation of individual bank stocks. As an exogenous variable, new energy industry catalyzes new demand growth; But it will not usher in such a big increase as the last real estate cycle. At present, green finance is still in the stage of seizing the market share. Whether it can form the core competitiveness depends on the bank’s own customer service ability and risk control ability. Banks that form the core competitiveness of green finance are more likely to succeed in transformation, and the valuation will have obvious room for improvement.
Risk warning event: the economic downturn exceeded expectations. The impact of the epidemic exceeded expectations. The forecast is based on certain assumptions, and the data may eventually have some errors due to the fact that the enterprise’s operation is less than expected.
