Market Review
Last week (3.14-3.18), the securities, insurance and diversified financial sectors rose 2.0%, 1.2% and 0.5% respectively. The Shanghai Composite Index, Shenzhen Composite Index and gem fell – 1.8%, – 1.0% and 1.8% respectively, and the Shanghai and Shenzhen 300 fell 0.9%. The excess returns of securities, insurance and diversified financial sectors relative to Shanghai and Shenzhen 300 were 3.0%, 2.1% and 1.4% respectively. Since the beginning of 2022, securities, insurance and diversified finance sectors have decreased by 17.7%, 6.4% and 9.0% respectively.
Core view
Securities: last week, the securities sector became the pioneer of the market rebound. We think this rebound is more driven by sentiment. However, we still observe that in addition to emotional targets such as BOC and Hualin, they have high growth and ownership α Wealth management securities companies such as CICC, gf and Dongfang led the increase. The asset quality and profitability of securities companies have been continuously improved, and the growth given by asset light business is still underestimated by the market. From the perspective of valuation, the valuation of Pb in the industry has reached the low point since February 2019. Securities companies have reached the configurable range in terms of growth and valuation.
Insurance: liability side: listed insurance companies released premium data in February: life insurance is still under pressure and property insurance continues to improve. The growth of TPL’s single month premium business and TPL’s single month premium business mainly came from the downturn of TPL’s single month premium business and TPL’s single month premium business. The product structure and payment structure were not improved, which became a repressive factor for NBV of insurance enterprises in the first quarter. However, there are still positive factors in the industry: the improvement of nbvm in bancassurance channel and the high increase of premium, as well as the sales boom of increased lifetime life, which is expected to alleviate the pessimistic expectation of the industry. Asset side: according to the social finance data in February, there is still the expectation of interest rate and reserve requirement reduction in the follow-up. However, under the background of credit expansion, the possibility of significant decline of long-term interest rate is low.
Liquidity: last week, MLF and reverse repo put a total net investment of 190 billion, but the MLF interest rate has not changed, and there are still expectations of interest rate and reserve requirement reduction in the future.
Comments on important events
Comments on premium data in February: Life Insurance: at present, the liability side of life insurance is still under pressure. The product sales are mainly annuity insurance, and the contribution of single payment to business value is limited. It is expected that the value of new life insurance business in the first quarter is still under pressure. Property insurance: we believe that the impact of the comprehensive reform of auto insurance has gradually dissipated, and the growth rate of premium is expected to increase steadily in the future.
Investment advice
Securities companies participating in public funds or related targets with strong asset management 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.
