Focus:
On December 20, the central bank announced that the one-year LPR was 3.8%, a decrease of 5bp compared with the previous 3.85%, and the LPR over five years was 4.65%, unchanged. This is the first reduction of one-year LPR this year and the first reduction after April 2020.
Industry and company dynamics
1) On December 23, Premier Li Keqiang presided over the national standing committee meeting to deploy further cross cycle adjustment measures to promote the stable development of foreign trade. On December 24, the fourth quarter regular meeting of the central bank’s monetary policy committee in 2021 was held in Beijing. 2) On December 20, the central bank and the China Banking Insurance Regulatory Commission jointly issued the notice on doing a good job in M & a financial services for risk disposal projects of key real estate enterprises. 3) On December 24, the central bank and other departments jointly issued the notice on the plan for Chengdu and Chongqing to jointly build a western financial center, helping the financial innovation and development of Chengdu and Chongqing. 4) This week Bank Of Hangzhou Co.Ltd(600926) the board of directors decided to issue tier 2 capital bonds of no more than 10 billion yuan; Bank Of Nanjing Co.Ltd(601009) completed the issuance of 20 billion yuan of financial bonds; Shanghai Rural Commercial Bank Co.Ltd(601825) approved to issue tier 2 capital bonds of no more than 10 billion yuan; Agricultural Bank Of China Limited(601288) the board of directors decided to issue qualified write down tier 2 capital instruments of no more than RMB 200 billion in batches; In addition, Bank Of Guiyang Co.Ltd(601997) plans to invest 1 billion yuan to establish a wholly-owned subsidiary, Guiyin Financial Management Co., Ltd., Industrial Bank Co.Ltd(601166) private banking department is approved to start business, etc.
Data tracking
This week, the A-share bank index fell by 0.76%, 0.09 percentage points lower than the Shanghai and Shenzhen 300 index, and the rise and fall of the sector ranked 17 / 30, among which Jiangsu Zijin Rural Commercial Bank Co.Ltd(601860) (+ 5.31%), Bank Of Chengdu Co.Ltd(601838) (+ 3.28%) and China Citic Bank Corporation Limited(601998) (+ 1.77%) were the top gainers.
Open market operation: this week, a total of 50 billion yuan of reverse repo in the open market expired, and the central bank conducted a total of 100 billion yuan of reverse repo, with a net investment of 50 billion yuan; Next week, 50 billion yuan of reverse repo will expire in the central bank’s open market, of which 10 billion yuan will expire from Monday to Friday; In addition, 70 billion yuan of treasury cash will expire next Wednesday.
Shibor: Bank Of Shanghai Co.Ltd(601229) inter-bank lending rate trend down, the overnight Shibor interest rate down 2.2bp to 1.84%, and the seven-day Shibor interest rate down 20.8bp to 1.94%.
Investment suggestions:
This week, the LPR quotation was adjusted down asymmetrically, the range was in line with market expectations, and the pace was slightly faster than expected. Combined with the setting tone of the regular goods administration meeting in the fourth quarter of the weekend, the demand for cross cycle regulation and stabilizing the economy was relatively strong, and the overweight of monetary policy was more proactive, which was conducive to the repair of macro-economy and the expected improvement of the market. At present, the Pb corresponding to the valuation of the banking sector is still at the historical bottom range of 0.63 times. Although the interest margin is still under pressure under the background of interest rate reduction, the continuous implementation of the growth protection policy is good for the expectation of economic repair, which is also the main factor restricting the valuation of the sector. It is recommended to select individual stocks and continue to recommend: China Merchants, Ping An, Societe Generale, Ningbo, Chengdu, Hangzhou, Changsha, Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) etc.
Risk tips:
1) The downward pressure on the economy continued to increase, and the credit cost increased significantly;
2) Business differentiation of small and medium-sized banks, major business risks of individual banks, etc.
