Securities industry tracking
This week, the securities II (CITIC) index was – 5.40%, underperforming the CSI 300 index and outperforming the non bank finance (CITIC) index.
\u3000\u30001. Comments and policy data this week
On March 11, 2022, the central bank released the financial data of February. Social finance and credit both weakened. After excluding the base effect, they still performed poorly, lower than the market expectation. According to the data, the year-on-year growth rate of broad money in February 2022 decreased by 0.6 and 0.9 percentage points to 9.2% compared with the end of last month and the same period last year; The year-on-year growth rate of domestic and foreign currency loan balance decreased by 0.1 and 1.5 percentage points to 11.1% compared with the end of last month and the same period last year; In particular, in terms of sub sectors, household loans decreased by 336.9 billion yuan, including 291.1 billion yuan in short-term loans and 45.9 billion yuan in medium and long-term loans; Loans to enterprises (Institutions) increased by 1.24 trillion yuan, of which short-term loans increased by 411.1 billion yuan and medium – and long-term loans increased by 505.2 billion yuan.
Comments: 1) Social Finance: social finance increased by 1.19 trillion yuan (expected value: 2.22 trillion yuan) in February, with a year-on-year growth rate of 10.2%, from more to less than 531.5 billion yuan, which was significantly lower than that in January. In terms of sub items, the main contribution of social financing increment in February was corporate and government bond financing, which increased by 202.1 billion yuan and 170.5 billion yuan respectively year-on-year, mainly due to the low interest rate and the enhancement of corporate financing willingness superimposed on the rhythm of local bond issuance. The main drag items were RMB loans and non-standard financing, which increased by 432.9 billion yuan and decreased by 486.7 billion yuan respectively, A large number of non subject banks are the main drag on the discount table; At the same time, the margin of trust and entrusted loan financing improved, reflecting the relatively loose supervision at the beginning of the year. 2) In terms of credit: in February, RMB loans increased by 1.23 trillion (expected value: 1.45 trillion), with a year-on-year increase of 125.8 billion yuan from more to less. Bill financing in enterprise loans is the main contribution, while resident loans are the main drag. In terms of sub items, 1) residential sector: the deterioration of residents’ medium and long-term loan margin is the most serious. It has changed from an increase of more than 700 billion in January to a decrease of about 46 billion, which is the first time in history. The continuous decline of real estate sales data since the beginning of the year also confirms the weak credit demand of residential sector. However, residents’ medium and long-term loans generally lag behind real estate sales. Therefore, if the housing loan policy is relatively relaxed this year, the subsequent recovery of the loan can be expected; In February, residents’ short-term loans decreased by 22 billion yuan year-on-year. Enterprise sector: due to the Spring Festival holidays and repeated epidemics, affected by demand, the pace of medium and long-term loan delivery slowed down in February, with a year-on-year decrease of 594.8 billion yuan; Enterprise short-term loans increased by 161.4 billion yuan year-on-year; At the end of the month, the bill rediscount interest rate decreased significantly, the bank bill impulse reappeared, and the demand for bill collection increased. Therefore, the enterprise bill financing increased by 490.7 billion yuan year-on-year. 3) Money supply and fiscal policy: due to the Spring Festival cash withdrawal factor, M0 decreased significantly to 5.8% in January compared with the same month. The marginal relaxation of housing loan policy combined with the dislocation impact of the Spring Festival holiday led to the year-on-year rebound of M1 to 4.7%, while the year-on-year growth rate of M2 decreased to 9.2% (expected value of 9.5%), which is still higher than that at the end of last year and is also greatly affected by the time point of the Spring Festival; The year-on-year decrease in fiscal deposits significantly expanded to 1.45 trillion, with revenue exceeding expenditure, reflecting the forward force of fiscal policy this year.
The CSRC solicited public opinions on the provisions on the priority of the property of securities violators to bear civil liability for compensation (Draft). On March 11, 2022, China Securities Regulatory Commission (CSRC) issued a draft for public comment on the provisions on the priority of the property of securities violators to bear civil compensation liability (Draft). The provisions have 14 articles, which clarify the specific working mechanism of the administrative fines and confiscations paid by violators to bear civil compensation liability, including the application subject, application period, application amount Relevant regulations shall be made on the handling process.
Comments: the regulations improve the civil compensation system of securities. Considering the goal of the CSRC to fully implement the stock issuance registration system, including the introduction of a series of regulatory policies such as the regulations, it provides an important legal cornerstone for the full implementation of the stock issuance registration system and the protection of investors, and is conducive to the healthy development of the capital market in the long run.
Core data tracking of the securities industry: this week, the average daily turnover of the stock market has significantly warmed up month on month, and the trading activity has increased. In terms of business, the investment banking business has developed rapidly, slightly exceeding expectations, reflecting the accelerated pace of corporate IPO under the background of the comprehensive registration system reform, and the excess returns brought by investment banking and investment banking capitalization may be worthy of attention throughout the year. (1) Liquidity: on March 11, the 7-day inter-bank pledged repo interest rate was 2.1624%, up + 11.31bp from last Friday; The pledge repo rate of 7-day deposit institutions was 2.1035%, up + 6.84bp from last Friday. (2) Brokerage business: from March 7 to March 11, the average daily turnover of stocks in the two cities was 1087786 billion yuan, a month on month increase of + 12.28%, accounting for 1.61% of the market value of stocks in circulation, a month on month increase of + 25.24bp. (3) Credit business: (1) margin trading: as of March 10, the balance of the two loans was 1712314 billion yuan, down from – 0.62% last weekend, accounting for 2.55% of the circulating market value of a shares; (2) Stock pledge: as of March 4, the total market value of stock pledge inside and outside the market was 3836629 billion yuan, down – 0.84% from the previous weekend. (4) Investment banks: from January 1 to March 11, the IPO underwriting amount was 140210 billion yuan, accounting for 25.84% of the total completed last year; The amount of refinancing underwriting (convertible bonds and exchangeable bonds) was 19.190 billion yuan, accounting for 15.39% of the total completed last year; The bond underwriting amount of securities companies was 1521064 billion yuan, accounting for 13.79% of the total completed last year. (5) Asset management business: by the end of January 2022, the scale of private asset management of securities companies was 7.69 trillion yuan (excluding the scale of large aggregate products), up + 3.20% from the beginning of the year. By the end of December 2021, the scale of single asset management plan was 4.04 trillion yuan, down from – 31.76% at the end of the previous year; The scale of the collective asset management plan was 3.65 trillion yuan (including the scale of large collective products), an increase of + 74.61% over the end of the previous year. (6) Investment business: from March 7 to March 11, the CSI 300 index reported 430652, – 4.22% over the weekend, the Shanghai composite index reported 330975, – 4.00% over the weekend, and the China Securities all bond (net price) index reported 103.20, – 0.08% over the weekend.
Core data tracking of HKEx: since March 22: the market value of Hong Kong has hit a new low since the beginning of the year, but the overall transaction has increased significantly month on month due to market fluctuations. Specifically: 1) spot market: ADT was HK $153.4 billion, with a year-on-year increase of – 23% and a month on month increase of + 17.7%; South ADT + 31% month on month and – 20% year on year; North ADT was + 17.1% month on month and – 2% year on year; The market value of Hong Kong’s main board stock as of March 11 was HK $36.87 trillion, down 12.8% from the end of December 2021; 2) Derivatives market: 553000 futures advs, up + 12.6% year on year and + 8.7% month on month; Option adv was 716000, with a year-on-year increase of – 17% and a month on month increase of + 4.4%; Mscia sold 24500 pieces on the 50th, up 4% month on month.
\u3000\u30002. Investment view this week
The valuation of the sector remains low, and the reform of wide credit + comprehensive registration system may help the expected repair. Since March 7, 2022, disturbed by multiple emotional factors, the brokerage sector has been deeply adjusted, and the valuation of the sector has dropped to a low level. The overall Pb (LF) is about 1.44 times, which is in the 11% quantile of nearly 10 years, but the annual performance of the brokerage in 2021 is good.
As of March 12, 2022, a total of 10 listed securities companies have issued performance forecasts and 19 have issued performance letters. Among them, the average revenue of 19 securities companies that have issued performance express in 2021 increased by 22.0% year-on-year, and the average net profit attributable to the parent increased by 51.4% year-on-year. The main performance increment comes from the decline in the scale of brokerage / asset management business and credit impairment. In 2022, the main expectations of the securities industry to boost the overall valuation level come from two policy bases: one is that the economic work has been adjusted and steadily growing since the end of last year, and the credit easing policy will create a good trading environment for securities companies; the other is that the comprehensive registration system is planned to be implemented within the year, creating a relatively loose regulatory environment for securities companies.
From the perspective of short-term cost performance, benefiting from the accelerated reform of OTC derivatives and registration system, the core business increment of securities companies may exist in institutional and investment banking business in 2022: from the perspective of institutional business, China International Capital Corporation Limited(601995) (A / h) is the first. The institutional business of securities companies mainly includes seat leasing, custody, securities lending and derivatives, and the industry concentration is higher than that of other businesses. Among them, the institutional business of China International Capital Corporation Limited(601995) accounts for more than 50% of its profits, which is much higher than that of other securities companies, followed by Huatai Securities Co.Ltd(601688) and Shenwan Hongyuan Group Co.Ltd(000166) , and the profit contribution of institutional business also accounts for more than 20% respectively. From the perspective of investment bank capitalization, Haitong Securities Company Limited(600837) , China International Capital Corporation Limited(601995) and Huatai Securities Co.Ltd(601688) investment bank capitalization profits account for a relatively high proportion. In terms of private equity investment, follow-up investment of science and innovation board and investment banking business, Haitong, CICC and Huatai Securities Co.Ltd(601688) investment banking capitalization business contributed a higher proportion of profits in the first half of 2021, all exceeding 30%.
In the long run, we are still firmly optimistic about the excess return of wealth management transformation under non-standard to standard. Key recommended targets are: China stock market news, Gf Securities Co.Ltd(000776) , Huatai Securities Co.Ltd(601688) , China Industrial Securities Co.Ltd(601377) , Hithink Royalflush Information Network Co.Ltd(300033) .
Insurance tracking
This week, the insurance sector was – 5.98%, underperforming the non bank sector and the CSI 300 index. Affected by many uncertain factors in the macro environment outside China this week, investors’ panic has intensified. However, with the venting of short-term panic, A-Shares are expected to usher in a window period of deep decline and rebound. The February social finance data released this week was less than expected, which strengthened the market’s expectation of further easing policies, driving the yield of 10-year Treasury bonds to turn from up to down this week, with an overall decrease of 2.23bp to 2.79% compared with last weekend.
Some listed insurance companies disclosed the premium income in February, and the overall growth trend was good. In terms of life insurance, the growth rate of life insurance premiums of Guoshou / CPIC / Xinhua / PICC from January to February was – 5.04% / + 2.34% / + 5.20% / + 21.99%, and that of life insurance premiums in February alone was – 3.13% / + 14.85% / + 11.15% / + 18.75%. Among them, the growth rate of CPIC, Xinhua and PICC in February was higher than that of 2021. The growth of life insurance premium of PICC was mainly driven by the new single payment and regular payment renewal business. From January to February, the single payment / regular payment renewal premium income of long-term insurance in the first year was + 81.04% / + 29.96% year-on-year. In terms of property insurance, the premium income of PICC and CPIC in February continued to grow. Specifically, the premium growth rate of PICC / CPIC in the first two months was + 13.65% / + 15.66%, and that of February alone was + 13.39% / + 22.53%. Among them, the growth rate of vehicle insurance premium income of PICC increased month on month and year-on-year, driving the continuous recovery of property insurance business.
The decline of the sector was mainly affected by the short-term sentiment. It is suggested to pay attention to the structural market opportunities of the insurance sector. The panic caused by the superposition of internal and external factors led to the outflow of funds from the sector, but after continuous adjustment, the market may usher in a rebound opportunity. Current P / EV Valuation: AIA 1.64x, Ping An 0.59x (A shares) / 0.57x (H shares), CPIC 0.45X (A shares) / 0.32x (H shares), Guoshou 0.62x (A shares) / 0.24x (H shares), Xinhua 0.42x (A shares) / 0.21x (H shares); The P / b of China Property Insurance in 2021 is 0.85x and that of Zhongan online is 2.18x. The valuation is still in a low range and the margin of safety is sufficient. At present, we recommend AIA, whose new business value has increased steadily and whose agent quality is better than that of the same industry, and China property insurance, whose fundamentals have improved in the first half of the year, and continue to pay attention to Ping An Insurance (Group) Company Of China Ltd(601318) and China Pacific Insurance (Group) Co.Ltd(601601) , Internet insurance recommends Zhongan online with high growth.
Recommended stock pool
Traditional securities firms: Gf Securities Co.Ltd(000776) (A / h), China Industrial Securities Co.Ltd(601377) (a), Huatai Securities Co.Ltd(601688) (A / h), China International Capital Corporation Limited(601995) (A / h)
Internet Brokerage: China stock market news (a)
Traditional insurance: AIA (H), China Property Insurance (H)
Internet insurance: Zhong’an online (H)
Exchange: Hong Kong Stock Exchange (H)
Diversified Finance: Hithink Royalflush Information Network Co.Ltd(300033) (a), BOC aviation leasing (H)
Risk tips
The fermentation of overseas factors and the fluctuation of the equity market disturbed the valuation of the non bank sector.
