Event:
On March 5, 2022, Premier Li Keqiang delivered the government work report at the fifth session of the 13th National People's Congress, which briefly sorted out the parts related to financial work.
Key investment points:
Improve the efficiency of active fiscal policy: the deficit ratio in 2022 is planned to be about 2.8%, down 0.4% from 2021. It is planned to arrange 3.65 trillion yuan of local special bonds. Combined with Minister Liu Kun's previous speech, through cross-year adjustment, the funds transferred from the central government to the general budget alone reached 1.267 trillion yuan. This amount of money is equivalent to raising the deficit ratio by one percentage point. In addition, specific state-owned financial institutions and franchised institutions have turned in the balance profits in recent years according to law. Comprehensively, the expenditure scale this year is 2 trillion yuan larger than that in 2021.
Credit support may be higher than expected: the 2022 government work report sets the economic growth target at 5.5%, slightly higher than the market expectation. It is proposed to "expand the scale of new loans", guide more funds to key areas and weak links, and expand the coverage of Inclusive Finance. We will promote financial institutions to reduce real loan interest rates and charges, so that the majority of market participants can personally feel the improvement of financing convenience and the real decline of comprehensive financing costs. We expect that there is still room for the policies such as RRR reduction, interest rate reduction and refinancing expected by the market, and the rhythm depends on the economic recovery.
Establish financial stability guarantee fund: use market-oriented and legalized methods to resolve potential risks and firmly hold the bottom line of no systemic risk. It is expected that the risk resolution in key areas may continue to accelerate.
Investment suggestion: looking forward to 2022, or subject to the correction of asset quality expectation, some stocks may usher in the opportunity of improving the valuation of the sector. In the selection of individual stocks, we suggest paying attention to two main lines: first, due to the impact of the downward cycle of macro-economy, we suggest paying attention to companies with relatively weak cycle and stable growth. The second is to focus on companies whose fundamentals continue to improve and whose valuations are expected to improve.
Risk factors: if the epidemic continues and repeats, the overall economy continues to weaken, the enterprise revenue deteriorates and the performance of the sector fluctuates.
