Market performance:
In the current period (2022.2.282022.3.4), the non bank (Shenwan) index was – 1.44%, ranking 18 / 31 in the industry, the brokerage II index was – 1.23%, and the insurance II index was – 2.05%; Shanghai Composite Index – 0.11%, Shenzhen Component Index – 2.93%, gem index – 3.75%. The top five stocks in terms of rise and fall: ST Xishui (+ 18.20%), Kunwu Jiuding Investment Holdings Co.Ltd(600053) (+ 7.47%), Cnpc Capital Company Limited(000617) (+ 7.23%), Rendong Holdings Co.Ltd(002647) (+ 7.00%), Jingwei Textile Machinery Company Limited(000666) (+ 4.95%); The top five stocks in terms of rise and fall: Sunny Loan Top Co.Ltd(600830) (- 12.21%), Anhui Xinli Finance Co.Ltd(600318) (- 9.11%), Minsheng Holdings Co.Ltd(000416) (- 8.14%), ST Lvting (- 7.91%) and ST Lvting B (- 7.14%).
Core view
Securities companies: this week’s government work report continued to emphasize “steady growth”. In terms of monetary policy, on the basis of continuing the prudent monetary policy, it is proposed to expand the scale of new loans and keep the growth rate of money supply and social financing basically matched with the growth rate of nominal economy. The report emphasizes that the policy force should be appropriately advanced. With the cooperation of active fiscal policy, China’s monetary policy is expected to maintain a stable and loose pattern in the first half of the year. On the one hand, the government report boosted market confidence and further repaired the market risk appetite. On the other hand, the reasonable easing of market liquidity is expected to offset the negative impact of the US dollar interest rate increase. At the same time, the market liquidity remained reasonably abundant in the first half of the year, which continued to benefit the securities market. The government work report once again clarified the implementation of the comprehensive registration system, proposed to improve the bond financing support mechanism of private enterprises, fully implement the stock issuance registration system, and promote the stable and healthy development of the capital market. The comprehensive registration system is expected to be implemented in 2022. In combination with the measures for the transfer of listed companies of the Beijing stock exchange issued by the Shanghai and Shenzhen Stock Exchange on March 4, China’s capital market system has been basically completed. The implementation of the comprehensive registration system and the improvement of the board transfer system will further benefit the reserves of investment banking projects of securities companies and improve the profitability of investment banks. Due to the high requirements for the listing of the main board, the implementation of the main board registration system is expected to have a more significant positive effect on the head securities companies with strong investment banking strength.
In terms of the market, the brokerage sector continued to callback by 1.23% this week. The conflict between Russia and Ukraine led to the rise of global risk aversion again, the collective setback of global stock markets, and A-Shares were also affected to some extent. On the other hand, due to the impact of market performance since the beginning of the year, the issuance of funds has continued to be cold. In February, there were only 39 newly established funds in the market, a year-on-year decrease of 67.50%, with a total market share of 31.86 billion, a year-on-year decrease of 89.79%. The market’s confidence in wealth management has been hit to some extent. Among them, foreign capital sold China stock market news net for five consecutive days, with a cumulative net outflow of 1.435 billion yuan from northward funds during the week. At present, the Pb valuation of the securities sector has reached 1.52 times, which is below the historical 30 quantile, with a strong margin of safety. At the same time, the annual report performance of listed securities companies will be disclosed one after another. The performance of the industry will be bright in 2021, and the operating revenue and net profit have increased by 14.23% and 11.91% respectively. Most listed securities companies have strong certainty of performance growth, It is suggested to pay attention to the catalytic effect of performance growth. It is suggested to grasp the investment opportunities of securities companies.
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In this year’s government work report, the real estate policy further shows the stability maintenance orientation and provides policy support to buyers, financial institutions and the government to reverse the low real estate boom at the beginning of this year. Although we believe that the real estate market is still in a downward expectation in a short time, with the continuous loosening of the policy, The fundamentals of the real estate market may improve in the future, and the investment risk of the insurance sector will be gradually mitigated.
In addition, the report mentioned that we should steadily implement the national overall planning of basic old-age insurance for enterprise employees, appropriately raise the basic pension standards for retirees and urban and rural residents, ensure the payment in full and on time, and standardize the development of the third pillar old-age insurance. In the context of China’s aging population, life insurance is undergoing a deep transformation, and endowment insurance is expected to become an important factor in the repair of insurance liabilities in the future.
From the premium data in January, the overall pressure state of life insurance remained unchanged due to the Early Spring Festival holiday, sporadic disturbance of the epidemic and the decline of the scale of agents. For property insurance, the base number in 2021 is low, the data is better, the market concentration is improved, and the products and services are standardized and optimized. Both ends of the insurance sector are improving, and the valuation is low, but the bottom building stage is not over, and the inflection point needs to wait.
Risk tips: strengthened supervision, intensified external market risks, market fluctuations and repeated epidemics
