Core view: changes in securities companies at the end of Friday. The current epidemic and social finance data in February make many people doubt whether the GDP target of 5.5% can be achieved. We prefer to think that although the process is tortuous, the answer has been revealed. The brokerage sector often performs well when the expectation of economic stabilization is gradually formed and the liquidity has not been tightened. The current time point is worthy of key layout. No matter where the rebound direction is, the brokerage probability will not be absent. We have repeatedly mentioned in previous weekly reports that the current economic environment is still in the stage of transmission from wide currency to wide credit. The “money shortage” was corrected by the “superposition of three phases” at the end of 2008 and the second half of 2014, the interest rate and reserve requirement were comprehensively reduced, the financing difficulties and credit expansion of small and medium-sized enterprises at the end of 2018, and the “rumors of mixed banking and securities industry” driven the fermentation of the market after social finance exceeded expectations in April 2020, They are all the products of economic stimulus. Combined with the current national demand for steady growth, we firmly recommend the layout of the brokerage sector on the left. The main line still includes two in-depth reports on the industry we have previously released, one is wealth management “consignment of ice breaking products in the securities industry, and wealth management begins its journey”, and the other is “shadow shares” of public funds “from the development of American mutual funds to see the bright prospects of Chinese public funds”; At the same time, although it is difficult for life insurance premiums to perform under the condition of high base last year and no obvious improvement in agent quality improvement, the expectation of economic stabilization and upward interest rate in the future will form support for valuation. At the same time, the premium of P & C insurance appeared an upward inflection point one and a half years after the reform of vehicle insurance premium, and the head company is expected to usher in performance improvement by controlling the comprehensive cost rate. Suggestions: Dongcai, Guangfa, great wall, Zheshang, China property insurance, CPIC, etc.
Market review: the main index fell this week, and the Shanghai composite index reported 330975 points, – 4.00%; Shenzhen stock index reported 1244737 points, -4.40%; The CSI 300 index reported 430652, – 4.22%; Gem 266546, -3.03%; The China Securities composite bond (net price) index was at 99.66, -8bp. The average daily turnover of A-Shares in Shanghai and Shenzhen was 1085029 billion yuan, a month on month increase of + 12.26%, and the average daily turnover rate was 1.47%, a month on month increase of + 15.86bp; The balance of the two financial institutions was 173265 billion yuan, down – 3.65% from last week. As of March 11, 2022, the scale of equity + hybrid funds was 8.68 trillion yuan, a month on month increase of + 0.30%, and the scale of newly issued equity funds this week was 1.015 billion yuan, a month on month increase of – 65.73%. In terms of individual stocks, securities companies: Chinalin Securities Co.Ltd(002945) + 14.32%, Caida Securities Co.Ltd(600906) + 5.75%, Tianfeng Securities Co.Ltd(601162) + 1.13%; Insurance: The People’S Insurance Company (Group) Of China Limited(601319) -3.66%, Ping An Insurance (Group) Company Of China Ltd(601318) -5.91%, New China Life Insurance Company Ltd(601336) -7.16%; Diversified Finance: Luxin Venture Capital Group Co.Ltd(600783) + 4.02%, Sunny Loan Top Co.Ltd(600830) + 2.35%, Zhejiang Huatie Emergency Equipment Science & Technology Co.Ltd(603300) + 0.18%.
View of the securities industry: the performance of the securities business is growing steadily, the asset quality is improved, and the steady growth target may bring loose liquidity, which together form the driving force for the rise of the sector. From the performance of listed securities companies that have disclosed the performance express, the growth rate of net profit attributable to parent companies of more than 70% of securities companies is more than 20%, and half of them is more than 30%. Among them, China stock market news is expected to achieve a net profit attributable to the mother of a net profit of 4.8225 billion yuan in 2021, with a year-on-year growth of 66.90 percent expected in 2021, among which China stock market news is expected to achieve a net profit of 4.8225 billion yuan, a year-on-year growth of 66.90% year-on-year growth of 66.90 percent year-on-year growth of 66.90%, among which China stock market news is expected to top among the top among the top among the top among the top among China’stock market market news, among which the growth of China stock market ”s stock market news news, among the top among the top among the country’s stock market news news, among which the growth in the growth of China’s stock market market”s top among the top among the top among the top among the top among the top growth in terms in terms in terms in terms of the growth in terms of the growth in terms of the net profit growth of China ” ”net profits from the year to return to return to 7% year-on-year growth Citic Securities Company Limited(600030) , Everbright Securities Company Limited(601788) net profit increased by more than 50%. In addition, Zheshang Securities Co.Ltd(601878) , Guotai Junan Securities Co.Ltd(601211) and other four securities companies had net profit of more than 30%. In 2021, the performance of securities business grew steadily under the high base of 2020. It is expected that the net profit growth of most listed securities companies will exceed 30%, laying a solid foundation for the rise of the sector. The two sessions set the tone for steady growth, with gpd5 The growth target of about 5% is higher than the general expectation, the reduction of reserve requirements and interest rates is worth looking forward to, and loose liquidity will become the catalyst for the rise of the sector. The current valuation of securities companies is PB1 47 times, the valuation still does not match the performance and asset quality, which is 2.5 times away from PB2 61x valuation center still has a large space, so it is recommended to actively layout.
If the issuance of new funds is cold, it will not change the sustainable development trend of wealth management. Under the comprehensive registration system, we will grasp the main investment opportunities of investment banks. Since the beginning of 2022, the growth expectation of wealth management business has decreased due to the cold of new funds. In fact, although the scale of new funds has declined year-on-year, the total scale of public funds has increased by 3.74% compared with the end of 2022 and 16.32% compared with the same period last year. The management fee income based on AUM has maintained a continuous growth trend. After a significant adjustment of wealth management characteristic securities companies, Cost performance is gradually emerging. In terms of investment main line of investment banking business, head securities companies have advantages in talent reserve, research ability, asset pricing ability and sales ability, and the market share of registration system is concentrated to the head. The comprehensive registration system is coming, which will bring performance increment to the head securities companies with stronger comprehensive strength. It is suggested to pay attention to: Citic Securities Company Limited(600030) , China International Capital Corporation Limited(601995) , China Securities Co.Ltd(601066) , Huatai Securities Co.Ltd(601688) , Haitong Securities Company Limited(600837) , etc. Under the background of wealth management expansion, it is suggested to pay attention to the core line of wealth management China International Capital Corporation Limited(601995) , which has obvious advantages in products and investment advisers and promotes the large-scale development of high-end wealth management; 2. Benefiting from the wealth of residents entering the market through institutions, excellent products and investment advisory services + high proportion of asset management income + Gf Securities Co.Ltd(000776) , Orient Securities Company Limited(600958) , China Industrial Securities Co.Ltd(601377) , etc. with high contribution of participating / holding public funds; 3. The company attaches great importance to its strategy and has obvious characteristics of private placement and consignment sales, which is expected to achieve Zheshang Securities Co.Ltd(601878) .
View of the insurance industry: the China Banking and Insurance Regulatory Commission issued the notice of the China Banking and Insurance Regulatory Commission on printing and distributing the detailed rules for the implementation of the measures for the management of non life insurance business reserves of insurance companies (1-7). The implementation rules clarify the principles and methods of reserve evaluation, stipulate the internal control process of reserve evaluation, standardize the method of calculating risk margin, and clarify the duration standard of discount during reserve evaluation. The implementation rules also strengthen the management of reserves of branches of insurance companies, standardize the retrospective analysis of reserves, clarify the contents of reserve evaluation reports, improve the reserve evaluation working paper system, and require insurance companies to keep working papers for reference. We believe that by formulating specific and clear institutional rules, the regulatory authorities, the board of directors and functional departments of insurance companies and independent actuarial evaluation institutions can fulfill their respective responsibilities, so as to form a reasonable mechanism to prevent reserve risk, further promote the stable development of property insurance companies, improve corporate governance and develop stable head property insurance enterprises.
AIA released its annual report 2021, and NBV grew by 18% to 3 billion 366 million US dollars in 2021. Slightly more than expected, Chinese mainland (YoY+10%), Hongkong (YoY+37%) and Thailand (YoY+34%) made the main contribution, all of them exceeded the pre epidemic level except Hongkong.
Nbvmarkin59 3%, a year-on-year increase of + 6.3pct, mainly benefiting from the optimization of product business structure in Hong Kong and Thailand, the improvement of government bond yield and the reduction of underwriting expenses. The company achieved an after tax operating profit of US $6.409 billion in 2021, with a year-on-year increase of 6%, mainly due to the orderly amortization of high-quality business. Dividends are linked to operating profit. The total annual dividend is 146 Hong Kong cents / share, a year-on-year increase of + 8%. Benefiting from the strong cash flow brought by the steady growth of free surplus, the company will return up to US $10 billion of capital to shareholders through the share repurchase plan in the next three years to improve shareholders’ return and financial flexibility. Although it is still under pressure due to the impact of the epidemic in the short term, the continuous promotion of the concept of excellent agent, multi regional decentralized layout, the deepening of digital transformation and the construction of healthy ecology are expected to bring alpha to the company. We predict that the growth rate of 20212023 EEV will be 8.3% / 8.4% / 10.9%. At present, the corresponding share price of 20212023 epev is 1.51x/1.39x/1.26x respectively, maintaining the “buy” rating.
Subject to the impact that the life insurance reform is still in a painful period, the increase of team capacity is less than the decline of manpower, and the continuous mismatch between supply and demand, the inflection point at the liability end is still difficult to appear in the short term. At present, the repair of insurance valuation still depends on the performance of the asset side. Formulation of government work report 2022 GDP 5 The target of 5% still maintains a high growth on the high base, and the social financing and credit in February are lower than expected, indicating that steady growth is still a hard requirement, and various policies are expected to continue to increase. With the gradual implementation of broad credit, the long-term interest rate is expected to rise, driving the valuation repair of insurance stocks. In addition, the adverse impact of real estate investment on insurance companies has been fully reflected, the resolution of real estate chain risks has been gradually promoted, the government work report sets the tone of the important role of real estate in economic growth, and the favorable policies for real estate will be more positive. In terms of equity, insurance stocks tend to underestimate the value of individual stocks with high dividends, which is in line with the style of this year’s equity market and is expected to achieve better investment returns. At present, the positions and valuations of insurance stock institutions are at historical lows. The current share prices of Guoshou, Ping An, Taibao and Xinhua 2022epev are 0.55x, 0.53x, 0.42x and 0.38x respectively. It is suggested to pay attention to AIA led by high-quality agents, as well as Ping An Insurance (Group) Company Of China Ltd(601318) and China Pacific Insurance (Group) Co.Ltd(601601) , which are more thoroughly reformed in life insurance.
Liquidity view: in terms of volume, the central bank’s net return on the open market this week was 330 billion yuan, including 50 billion yuan for reverse repurchase and 380 billion yuan for return. 380 billion yuan of reverse repo will expire next week. In terms of price, the short-term capital interest rate fell this week. The weighted average inter-bank offered rate rose 13bp to 2.12%, and the inter-bank pledged repo rate rose 13bp to 2.09%. R001 goes up 13bp to 2.07%, R007 goes up 11bp to 2.16%, and dr007 goes up 7bp to 2.10%. Shibor’s overnight interest rate rose 15bp to 2.05%. The issuing interest rate of interbank certificates of deposit rose as a whole. The yield of one-year treasury bonds rose 4bp to 2.15%, the yield of 10-year Treasury bonds remained unchanged, and the term spread narrowed 4bp to 0.68%. The government work report plus the less than expected social finance in February shows that steady growth will continue, the implementation of monetary policy will be strengthened, and the fiscal development will be more active. In the future, the credit easing is expected to gradually take effect, the global inflation caused by the conflict between Russia and Ukraine is exacerbated, and the long-term interest rate is expected to usher in an upward trend.
Diversified financial perspective: focus on the trust and financial holding sectors that benefit from stimulating economic policies.
Risk factors: the deterioration of covid-19 epidemic, the decline of China’s economy beyond expectations, the decline of long-term interest rate beyond expectations, the success of the start is less than expected, the tightening of financial regulatory policies, the risk of spread loss caused by low interest rate, the pressure of agent shedding, lower than expected insurance sales, the uncertainty of the impact of capital market fluctuations on performance, etc.
