Focus:
On March 5, the premier delivered the 2022 government work report at the fifth session of the 13th National People’s Congress, in which the key points in the financial field include strengthening the implementation of prudent monetary policy and establishing a financial stability guarantee fund.
Industry and company dynamics
1) on March 4, the China Banking and Insurance Regulatory Commission and the central bank issued the notice on strengthening financial services for new citizens, encouraging banks and insurance institutions to strengthen financial support for new citizens in the areas of housing demand such as house purchase, rental and consumer credit. 2) On March 3, the financial stability bureau released the article “financial risks are converging day by day, and the foundation for stability is more solid”, which said that after concentrated tackling, the risk points accumulated for a long time in China’s financial system have been effectively handled, and the financial risks are generally convergent and controllable. 3) This week, Bank Of Chengdu Co.Ltd(601838) completed the priority placement and online subscription of the original shareholders of the convertible bond “Chengyin convertible bond”, with a total issuance amount of 8 billion yuan and a term of 6 years Bank Of Chongqing Co.Ltd(601963) released the performance express of 2021. In 2021a, the operating revenue was 14.515 billion yuan (+ 11.24%, YoY), and the net profit attributable to the parent company was 4.664 billion yuan (+ 5.42%, YoY) Bank Of Shanghai Co.Ltd(601229) released the performance express of 2021. In 2021a, the operating revenue was 56.230 billion yuan (+ 10.81%, YoY), and the net profit attributable to the parent company was 22.042 billion yuan (+ 5.54%, YoY) Bank Of Hangzhou Co.Ltd(600926) the largest shareholder, Commonwealth Bank of Australia, transferred 5% of its shares to Hangzhou city investment and Hangzhou exchange investment respectively. After this transaction, Hangzhou Finance Bureau passively became the largest shareholder of the company. It will officially enter the performance period of the annual report from next week.
Data tracking
This week, the A-share banking index rose by 0.07%, outperforming the CSI 300 index by 1.76 percentage points, and the rise and fall of the sector ranked 11 / 30, among which Bank Of Nanjing Co.Ltd(601009) (+ 5.40%), Bank Of Chongqing Co.Ltd(601963) (+ 5.34%) and Bank Of Suzhou Co.Ltd(002966) (+ 4.80%) were the top.
Open market operation: this week, the central bank conducted a total of 380 billion yuan of reverse repo in the open market, a total of 810 billion yuan of reverse repo expired, and another 5 billion yuan of central bank bill swap expired and operated, with a full-scale net return of 430 billion yuan in the open market. Next week, 380 billion yuan of reverse repo will expire in the central bank’s open market.
Shibor: this week, the trend of Bank Of Shanghai Co.Ltd(601229) inter-bank lending rate declined as a whole. The overnight Shibor interest rate fell 33bp to 1.90%, and the seven-day Shibor interest rate fell 27bp to 2.05%.
Investment suggestions:
The government work report of the two sessions this week set the tone of stable growth and wide credit, strengthened the certainty of industry fundamentals at the level of scale and credit risk, guaranteed the positive contribution to the overall performance and reduced the volatility of performance. Combined with the recent marginal loosening of policies in the real estate field, it helps to improve market expectations and also helps to support the credit supply this year. In the follow-up, the overall sector still has policy support. The annual report performance period will officially enter next week. The catalytic performance of banks and the relatively low valuation of the sector also improve the space for overall repair. We maintain the “recommended” investment rating of the sector and continue to recommend at the individual stock level: China Merchants, Ningbo, Chengdu, Societe Generale, Ping An, Bank Of Hangzhou Co.Ltd(600926) etc.
Risk tips:
1) the downward pressure on the economy continues to increase, and the credit cost has increased significantly;
2) major operational risks of individual banks, etc.
