Market Review
Last week (3.7-3.11), the securities, insurance and diversified financial sectors fell by 5.4%, 6.3% and 4.1% respectively.
The Shanghai Composite Index, Shenzhen Composite Index and gem fell 4.0%, 4.4% and 3.0%, and the Shanghai and Shenzhen 300 fell 4.2%. The excess returns of securities, insurance and diversified financial sectors relative to Shanghai and Shenzhen 300 were – 1.2%, – 2.1% and 0.2%. Since the beginning of 2022, securities, insurance and diversified finance sectors have fallen by 19.3%, 7.5% and 9.4% respectively.
Core view
Securities: looking back on the market of securities companies for several times in the past decade, monetary and fiscal policies have made great contributions. We believe that at present, the market is still in the stage of wide credit, and the implementation is expected to be further affected by the lower than expected social finance in February. Superimposed with the bright performance of the annual report performance of securities companies, the future market can be expected.
At present, the differences in the market lie in the downturn of the equity market in 2022 and the cold of new development funds. However, we believe that behind the upsurge of public funds last year is the transfer of residents’ wealth investment asset categories, and the short-term market decline is difficult to change the investment flow on a large scale. As the redemption rate is much lower than the management fee share, the sluggish sales of the new fund does not change the logic of securities companies, and we should pay attention to securities companies with continuously increasing ownership.
Insurance: on the liability side, the reform of individual insurance agents continues, and it still takes time to succeed. The main ideas of insurance companies at this stage are: strengthen the construction of Bancassurance channels at the channel end, speed up the per capita production capacity of individual insurance and improve the quality of staff increase; The product side turns to the sales of life insurance products. Under the background of asset side, wide credit and global interest rate hike, interest rates are difficult to decline and will remain relatively stable. The policies of the real estate industry have been loosened one after another, which is expected to improve the pessimistic expectation of the market on the investment side. At present, the insurance industry is at the bottom of the valuation. The rolling PEV of Ping An, Guoshou, CPIC and Xinhua are 0.56, 0.75, 0.61 and 0.52. The downward space is limited. It is recommended to pay attention.
Liquidity: last week, the central bank made a net return of 330 billion yuan in the open market. On March 15, 100 billion yuan of MLF expired. Considering that the social finance data in February is less than expected, the credit easing policy is expected to increase in the future, which will support the interest rate.
Comments on important events
AIA released its annual report for 2021, with outstanding performance. Apart from financial indicators, we are concerned about the following characteristics of the performance and layout of AIA in Chinese mainland:
1) AIA and Postal Savings Bank Of China Co.Ltd(601658) , China Post life insurance and Bank of East Asia vigorously expand bancassurance channels; 2) AIA’s sinking market performance is outstanding;
3) AIA’s performance has basically returned to the pre epidemic level, which further proves that the contradiction in the current life insurance industry is that the quality of agents does not match the needs of customers.
We believe that bancassurance business may be the main driving force and performance highlight of insurance enterprises in the next stage. There is still a huge insurance demand in the sinking market to be tapped.
Investment advice
The related targets of participating public offering securities companies or asset management companies with strong ability include Orient Securities Company Limited(600958) , China Greatwall Securities Co.Ltd(002939) , China stock market news with excellent fund consignment ability and large holdings. Ping An Insurance (Group) Company Of China Ltd(601318) , which is related to the synergy of “Bank + insurance” group.
Risk tips
The covid-19 epidemic worsened, China’s economic pressure increased, and the decline of long-term interest rate exceeded expectations.
