Core view: this week, the market risk appetite increased. Vice Premier Liu he held a meeting of the finance committee to study economic and capital market issues. The high-level dialogue between China and the United States was successful, and the market rebounded. At this stage, the epidemic situation is still a variable, and the realization of the GDP target of 5.5% requires more “hard work” and policy escort. 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 our previous weekly reports that the current economic environment is still in the stage of wide currency to wide credit transmission. The four trillion yuan at the end of 2008, the “three-phase superposition” to correct the “money shortage” in the second half of 2014, the comprehensive interest rate and standard reduction, the credit expansion of small and medium-sized enterprises at the end of 2018, and the market fermentation driven by the “rumors of mixed banking and securities industry” after social finance exceeded expectations in April 2020 are all the products of the effectiveness of economic stimulus. Combined with the current national demand for steady growth, we continue to firmly recommend the securities business sector. The main line follows the two in-depth reports of 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, “looking at the bright prospects of China’s public funds from the development history of American mutual funds”; AIA and Ping An released annual reports. AIA with high agent quality recorded a positive growth of 18% NBV and Ping An – 23%. Agent quality improvement is ongoing. We believe that it is difficult for the liability side to perform under the condition of high base last year and no obvious improvement in agent quality improvement, but the expectation of economic stabilization and upward interest rate in the future will be supported by 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 indexes rose and fell this week, and the Shanghai composite index reported 325107 points, – 1.77%; Shenzhen stock index reported 1232865 points, -0.95%; CSI 300 index reported 426590, -0.94%; Gem 271379, + 1.81%; The China Securities composite bond (net price) index was at 99.71, + 5bp. The average daily turnover of A-Shares in Shanghai and Shenzhen was 1110406 billion yuan, a month on month increase of + 2.34%, and the average daily turnover rate was 1.49%, a month on month increase of + 1.91bp; The balance of the two financial institutions was 1686235 billion yuan, down from – 1.24% last week. As of March 18, 2022, the scale of equity + hybrid funds was 8.69 trillion yuan, a month on month increase of + 0.35%, and the scale of newly issued equity funds this week was 576 million yuan, a month on month increase of – 43.25%. In terms of individual stocks, securities companies: Boc International (China) Co.Ltd(601696) + 13.67%, Chinalin Securities Co.Ltd(002945) + 6.94%, China International Capital Corporation Limited(601995) + 4.49%; Insurance: Ping An Insurance (Group) Company Of China Ltd(601318) + 1.68%, China Life Insurance Company Limited(601628) + 1.46%, The People’S Insurance Company (Group) Of China Limited(601319) + 0.89%; Diversified Finance: Anhui Xinli Finance Co.Ltd(600318) + 20.97%, Gi Technologies Group Co.Ltd(300309) + 9.66%, Sunny Loan Top Co.Ltd(600830) + 4.09%.
View of the securities industry: the securities industry will grow steadily on a high base in 2021, and the rise of the sector has a performance basis. From the performance of the securities industry in 2021 disclosed by the Securities Industry Association, the performance of the industry increased rapidly in 2020, which was the second performance year in history, with a high base. In 2021, the securities industry achieved a total revenue of 502.4 billion yuan, a year-on-year increase of 12.02%, and a net profit of 191.1 billion yuan, a year-on-year increase of 21.32%, further narrowing the gap with the best performance in history. 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 49 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.
The issuance of new funds 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 large adjustment of wealth management characteristic securities companies, the cost performance has gradually appeared. In the context of the great development of wealth management, the wealth management line suggests paying attention to the core targets benefiting from the expansion of the wealth management market: 1 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) . 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.
View of the insurance industry: from January to February, the life insurance premium differentiated, and the property insurance premium stabilized and improved. In terms of life insurance, affected by the pain of channel reform, product structure adjustment and the year-on-year high base in 21 years, the growth of 1-2 life insurance premiums of listed insurance enterprises has been differentiated, among which the premiums of PICC, New China Life Insurance Company Ltd(601336) and CPIC have achieved positive growth, while Ping An and Guoshou continue to be under pressure. Benefited from the firm reform of channels, the early layout of marketing and the strength of Bancassurance channels.
In terms of property insurance, the growth rate of 1-2 premiums of listed leading insurance companies has achieved rapid positive growth, which mainly benefited from the gradual improvement of profitability due to the low base affected by the auto insurance reform, the improvement of the market share concentration of leading insurance companies and the rapid development of non auto business in the same period. With the subsequent gradual increase and stabilization of average vehicle premium, the growth rate of premium will tend to be stable and the underwriting profitability will be further improved.
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, 0.41x and 0.37x 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 invested 260 billion yuan in the open market this week, including 140 billion yuan in reverse repurchase and 50 billion yuan in return. 140 billion yuan of reverse repo will expire next week. In terms of price, the short-term capital interest rate has performed differently this week. The weighted average inter-bank offered rate remained unchanged at 2.12%, and the inter-bank pledged repo rate fell 2bp to 2.07%. R001 goes down 4bp to 2.03%, R007 goes up 2bp to 2.18%, and dr007 goes down 4bp to 2.06%. Shibor’s overnight interest rate fell 6BP to 1.99%. Interbank certificates of deposit issue interest rates vary. The yield of one-year treasury bonds rose by 2bp to 2.17%, the yield of 10-year Treasury bonds fell by 3bp to 2.80%, and the term spread narrowed by 5bp to 0.63%. The government work report and the less than expected social finance in February show 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 extension is expected to gradually take effect, 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.
