Event:
On March 11, the central bank released financial data for February 2022. Among them, social finance increased by 1.19 trillion in February, with a year-on-year decrease of 0.53 trillion. The growth rate of stock social finance was 10.2%, down 0.3pct month on month. In January, RMB loans increased by 1.23 trillion, a year-on-year decrease of 0.13 trillion. M1 grew by 4.7%, up 6.6pct month on month, M2 grew by 9.2%, down 0.6pct month on month.
Brief comment:
1. Social finance increased by 1.19 trillion, a year-on-year decrease of 0.53 trillion, and the cumulative value in the first two months maintained a stable growth. In February, social finance increased by 1.19 trillion, 1.03 trillion lower than the consensus expectation of wind, a year-on-year decrease of 0.53 trillion. The growth rate of stock social finance was 10.2%. Although it decreased by 0.3pct month on month, it still maintained double-digit stable growth. 22 years ago, in February, social finance added a total of 7.36 trillion, an increase of 0.45 trillion year-on-year. The cumulative value still maintained a good trend of increasing year-on-year, and the trend of wide credit continued.
From the perspective of structure, credit supply and undiscounted bills increased less year-on-year, while direct financing and government bonds increased more year-on-year. In February, the RMB credit granted to entities decreased by 0.43 trillion year-on-year, and the undiscounted bills on off balance sheet financing decreased by 0.49 trillion year-on-year, which is the main reason for the slowdown of social finance. The trend of direct financing and government bonds is good. In February, corporate bonds continued the trend of January, with an increase of 202.1 billion year-on-year, driving the continuous recovery of direct financing; Government bonds still increased by 170.5 billion year-on-year in February, and the certainty and continuity of the steady growth policy continued to be maintained.
February, as a small month of credit, was squeezed out of some loans (especially residents’ medium and long-term loans) when the data in January was much better than expected. The repeated epidemic and the turmoil in the real estate industry also deepened the negative impact on credit supply. Therefore, the credit showed a temporary weak trend in February. Looking forward to this year, the support of the steady growth policy is highly deterministic, the growth target of “5.5%” is clear, and the follow-up trend of social financing and credit is good. It is expected that the demand trend of social financing and credit in the whole year will continue in the second half of last year, and the increment of social financing and credit in 2022 is expected to be higher than that in 2021.
2. Corporate loans remained at a high level after the steady growth of infrastructure investment, and retail loans increased less year-on-year due to the impact of monthly and squeeze. In February, credit increased by 1.23 trillion, lower than expected. Corporate loans (including bills) increased by 1.22 trillion, an increase of 57.3 billion year-on-year; Retail loans decreased by more than $336.9 billion year-on-year.
On the enterprise side, the commencement after the festival has driven a sharp increase in short-term credit demand. In terms of new increment, medium and long-term loans of enterprises increased by 505.2 billion, a year-on-year decrease of 594.8 billion; Corporate short-term loans increased by 411.1 billion, a year-on-year increase of 161.4 billion, corporate bill financing increased by 305.2 billion, a year-on-year increase of 490.7 billion. In addition to the impact of the centralized impulse of some banks at the end of the month due to weak credit demand, it is expected that the short-term capital demand caused by the increase of temporary expenditure for centralized start-up of enterprises after the festival will also contribute. The residential end decreased by 337 billion in February, an increase of 479.2 billion year-on-year. In February, resident loans decreased by 337 billion, including short-term loans decreased by 291.1 billion and medium and long-term loans decreased by 45.9 billion. The short-term credit demand of residents is affected by the payment of salary and welfare during the Spring Festival. Firstly, the funds are relatively abundant, and the demand for consumer loans decreases. Secondly, due to the rebound of the epidemic, offline consumption scenarios are limited. As a result, the new mortgage loan was released in advance in February, which significantly reduced the demand for long-term mortgage loans.
What needs special attention is that since this year, different types of banks have faced huge differences in credit demand and supply. On the whole, the supply of large banks and high-quality urban and rural commercial banks in key regions is strong, and the supply of joint-stock banks is relatively weak. Since the beginning of the year, the credit data shows that the proportion of short-term loans is not low and the bill interest rate fluctuates at the end of the month. The main reason is the huge structural difference of credit this year, rather than the view that it is the embodiment of the insufficient overall credit demand. In fact, due to the structural differences in credit demand this year, real estate and consumption are not strong, which is mainly driven by infrastructure projects and physical enterprises in the eastern coastal areas. These are the advantageous areas of large banks and high-quality urban rural commercial banks in key regions. Therefore, the total investment of large banks and high-quality urban rural commercial banks in key regions has increased year-on-year, and the structure is better than that of the industry as a whole Medium and long-term loans are higher than the high boom characteristics of the industry as a whole. From the survey results, this year, the demand of large banks and high-quality urban and rural commercial banks in key regions is strong, and the project reserves are sufficient. It is expected that the follow-up total amount will increase year-on-year and the trend of continuous structural optimization will continue. On the contrary, due to the weakness of its traditional investment advantages in real estate and consumption, the credit has been weak since this year. Under the pressure of monthly quota, it relies more on short-term loans and bill impulse at the end of the month to complete the investment task. Therefore, the proportion of short-term loans in the total amount of credit has been not low, and the bill interest rate fluctuates sharply at the end of each month.
3. The increase of corporate and fiscal deposits led to a new deposit of 2.54 trillion, and M1 rebounded significantly. In February, deposits increased by 2.54 trillion, an increase of 139 million year-on-year. Among them, enterprise deposits and fiscal deposits increased by 2.56 trillion and 1.45 trillion year-on-year, while resident deposits and non bank deposits decreased by 3.55 trillion and 0.22 trillion year-on-year. The mutual changes of enterprise deposits and resident deposits are in line with the seasonal impact after the Spring Festival. In February, the growth rate of M2 was 9.2%, with a month on month decrease of 0.6pct; Under the influence of the difference in the date of the Spring Festival last year, the growth rate of M1 rebounded significantly in February, with a growth rate of 4.7%, an increase of 6.6pct month on month, and returned to the growth rate since the fourth quarter of last year as scheduled.
4. Investment suggestions:
Although the social finance credit data in February was lower than expected, the seemingly low proportion of short-term loans and the fluctuation of bill interest rate at the end of the month in the credit data since the beginning of the year are actually caused by the huge structural differences in credit. The credit demand and supply of high-quality urban and rural commercial banks in large banks and key regions are actually very strong. Looking forward to 2022, there is no doubt that the new volume of social financing and credit will maintain the general trend of steady expansion. There is no need to pay too much attention to the short-term seasonal structural data fluctuations. Under the external environment of wide credit and stable economy, the clear growth target guidance of “5.5%” and the confirmation of M1 inflection point trend, the economic bottom recovery is expected to continue to be confirmed.
The data is weak, and it is worth looking forward to the further improvement of counter cyclical adjustment measures. For the core beneficiary banks of countercyclical regulation, banks with clear investment and operation in the business cycle, the leadership and sustainability of performance are determined, and the improvement of valuation center can be reasonably expected. Such high boom banks benefit from the obvious regional and Industrial Differentiation of the current economy. Under the background of weak aggregate data, the structural and local highlights they represent are logical. If the sector falls as a whole under the influence of industry data, it will be the best time for such high boom banks to build and increase positions this year. The annual report, quarterly report and follow-up communication to be disclosed in succession are important evidence of their business prosperity, and the further supporting policy will form an important support for their investment logic. For bank stocks, we recommend three main investment logic:
(1) the most explicit high prosperity bank is the core logic of this year’s banking sector – high-quality urban and rural commercial banks in key areas.
Don’t be overshadowed by the overall weakness. There is gold in the sand. The stock selection idea of structural high boom banks: first, the most obvious and definite counter cyclical regulation is the core bank in key infrastructure areas, which is a typical representative of Bank Of Chengdu Co.Ltd(601838) Bank Of Chengdu Co.Ltd(601838) began with infrastructure construction, but it is far from infrastructure construction. At the same time, it also greatly benefited from regional industrial upgrading. The physical demand and investment are also very strong. The credit has increased year-on-year, the interest margin is stable and the asset quality is excellent. Second, banks in Jiangsu and Zhejiang with strong deterministic credit demand, strong supply and sufficient reserves are in a very obvious high business cycle in terms of supply, interest margin and asset quality, which are typically represented by Bank Of Ningbo Co.Ltd(002142) , Bank Of Hangzhou Co.Ltd(600926) , Bank Of Nanjing Co.Ltd(601009) , Bank Of Jiangsu Co.Ltd(600919) , etc.
(2) pay close attention to the potential opportunities for the state-owned large banks to clean up their bad debts thoroughly and improve their performance trend, with Postal Savings Bank Of China Co.Ltd(601658) .
(3) continue to recommend Industrial Bank Co.Ltd(601166) , Ping An Bank Co.Ltd(000001) , China Merchants Bank Co.Ltd(600036) , where there is an obvious capability premium.
5. Risk warning: the sharp downturn of macro-economy leads to bad bank risk.
