In February, the total amount and structure of social finance credit were lower than expected. The increment of residents’ medium and long-term loans was at a new low, and the short-term increment of residents was also at a historically low level. The weak corporate financing structure, superimposed on the recent performance of private enterprise real estate bonds, reflected that the impact of real estate and epidemic on macro demand was gradually emerging, and also reflected that although the guidance of steady growth and wide credit was clear, it was insufficient and ineffective. The government work report defined the GDP growth target of 5.5%, and Premier Li Keqiang made it clear on March 11 to strengthen the implementation of macro policies. In the context of tense international relations, the significance of China’s “stability” is more important, and the follow-up policy strength may rise to a higher level, especially in the fields of real estate and service industry.
Reiterate the view that the bank market will continue to be optimistic, and the market driven by steady growth and steady real estate will continue. There is no need to be pessimistic if the demand is weak and the effectiveness is not reached. The economy has a cycle, there is room for policy, and there is greater possibility and space for upward in a lower position. Individual stocks continue to recommend high-quality urban rural commercial banks, such as Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) , Bank Of Jiangsu Co.Ltd(600919) , Bank Of Hangzhou Co.Ltd(600926) , and core targets: Bank Of Ningbo Co.Ltd(002142) , China Merchants Bank Co.Ltd(600036) , Postal Savings Bank Of China Co.Ltd(601658) , focusing on the value of undervalued targets.
The total amount and structure of credit in February were lower than expected. The medium and long-term loans of residents decreased and the increment reached a record low. In February, RMB loans increased by 1.23 trillion, a year-on-year decrease of 125.8 billion. The main reason was the impulse of bills and short-term loans of enterprises, and the small increase of residents’ loans and medium and long-term loans of enterprises. (1) Residents’ medium and long-term loans decreased by 45.9 billion this month, the lowest increase in a single month since 2008, reflecting the downturn in the housing sales market. (2) Residents’ short-term loans decreased by 291.1 billion. February is the weak month of residents’ short-term loans. The incremental level in February this year is close to the same period in 2019. Combined with the level in January, it may be only better than 2020 when the epidemic occurs. (3) Corporate loans increased by 1.24 trillion, an increase of 40 billion year-on-year, mainly due to the increase of 411.1 billion and 305.2 billion in corporate short-term loans and bills respectively, and the increase of medium and long-term loans was only 505.2 billion, a decrease of 594.8 billion year-on-year. We believe that although the broad credit orientation is positive, it is insufficient.
The growth rate of social finance decreased, dragged down by credit and bills, and local bonds and corporate bonds increased year-on-year. The growth rate of social finance in February was 10.2% year-on-year, 0.3 percentage points lower than that in January. In February, social finance increased by 1.19 trillion, a year-on-year decrease of 531.5 billion. In addition to the impact of credit, undiscounted bills decreased by 422.8 billion, a year-on-year decrease of 486.7 billion. Invoicing is subject to the weakness of financing demand and the restrictions of new bill regulations, and the impulse leads to the increase of discount demand. From January to February, the total social financing still increased year-on-year. Taking into account loans, corporate bonds and off balance sheet financing, we believe that the overall financing increment of enterprises is still weak. Corporate bonds, local bonds and off balance sheet financing still improved year-on-year: first, the bond market interest rate fell, and corporate financing was more inclined to issue bonds. Corporate bonds increased by 337.7 billion in February, an increase of 202.1 billion year-on-year. The issuance of corporate bonds from January to February reached a record high in the same period. Second, local bonds increased by 272.2 billion, an increase of 170.5 billion year-on-year. The advance and increment of local bond issuance were significantly better than that in the same period last year.
Combined with the data from January to February, fiscal deposits increased year-on-year, non bank deposits decreased year-on-year, and the increase in fiscal deposits may be related to the issuance of local bonds. It may be reduced in March to support infrastructure and other investments. In February, RMB deposits increased by 2.54 trillion, an increase of 1.39 trillion year-on-year. Among them, fiscal deposits increased by 600.2 billion yuan, household deposits decreased by 292.3 billion yuan, enterprise deposits increased by 138.9 billion yuan, and non bank deposits increased by 1.39 trillion yuan. In order to weaken the influence of the Spring Festival, from January to February, RMB deposits increased by 1.65 trillion year-on-year and fiscal deposits increased by 863 billion; Non bank institutional deposits increased by 291.6 billion less than the same period last year, residents increased by 377.7 billion more than the same period last year, and enterprises increased by 210.5 billion more than the same period last year. Combined with the data from January to February, it is expected that some funds will flow back to the banking system from the stock market and funds under the condition of low market sentiment. In February, M1 increased by 4.7% year-on-year, 6.6 percentage points higher than the previous month, and M2 increased by 9.2% year-on-year, 0.6 percentage points lower than the previous month.
Risk tip: the economy has fallen sharply and real estate risks have erupted in an all-round way.
