Core view:
Guoxin bank’s view: disturbed by the epidemic in March, the financing demand of the real economy decreased, but it is expected that the credit supply in the field of anti epidemic is improved. It is judged that the new credit in March increased by about 300 billion yuan year-on-year. Structurally, it is expected that there are still bills and short-term loan impulse, and the overall demand for physical financing is still poor. We calculated that the growth rate of social financing in March was 10.1%, down 0.1 percentage points month on month. In March, M2 was 9.2%, unchanged month on month, mainly due to the increase of financial expenditure under the impact of the epidemic. The predicted new social finance in March was 3.18 trillion yuan, a year-on-year decrease of about 190 billion yuan, of which RMB loans (plus write off and ABS) increased by 2.58 trillion yuan, entrusted loans and trust loans decreased by 50 billion yuan, undiscounted bank acceptances decreased by 230 billion yuan, corporate bonds increased by 200 billion yuan, stock financing increased by 60 billion yuan, and government bonds increased by about 500 billion yuan.
The impact of the epidemic on the economy in March was short-lived. At present, the epidemic has been effectively controlled. It is expected that the steady growth policy will also be strengthened after the epidemic, the economy will return to the trend of stabilization and recovery in the second quarter, and the growth rate of social finance will return to the trend of steady improvement. We maintain the forecast of 10.8% growth rate of social financing in the whole year.
February m2 and Social Finance Review:
Base currency: capital flows back after the Spring Festival, and the excess reserve rate rises
In February, the central bank put 293.8 billion yuan of base currency into operation, 487.8 billion yuan of base currency was recovered from government bond issuance and other financial factors, 769.4 billion yuan of base currency returned to banks after the Spring Festival, and the provision paid by payment institutions decreased, releasing 488.7 billion yuan of base currency. According to this calculation, the over storage rate at the end of January was 1.31%. In February, the return of cash withdrawal funds during the Spring Festival and the decline in reserves of Payment institutions increased the excess reserves. At the same time, the central bank also released about 300 billion funds, reflecting the clear intention of the central bank to maintain reasonable and abundant liquidity.
M2 growth rate of broad money fell to 9.2% in February
In February, the year-on-year growth rate of M2 was 9.2%, with a month on month decrease of 0.6 percentage points, mainly due to the decline in the contribution of net fiscal expenditure and physical credit to the growth rate of M2. M2 derivatives mainly include: (1) banks absorb foreign exchange and invest RMB; (2) Banks extend loans to non-financial enterprises and residents; (3) Banks purchase bonds from non-financial enterprises; (4) Financial investment; (5) The bank purchases asset management products on its own, and the transparency of these assets is low. When forecasting, we combine them into “other” projects. According to the old statistics without goods base, M2 increased by 1.45 trillion yuan in February. RMB 9.2 billion of loans issued by ABS entities and about RMB 8.8 billion of loans written off from ABS entities; Government bond issuance and other financial factors recovered about 112.6 billion yuan of M2 (the total financial data from January to February disclosed that the net financial expenditure in January was replaced by the change of Financial deposits, which may have an error with the actual net financial expenditure); About 19.9 billion yuan of M2 of corporate bonds purchased by banks on their own; The M2 derived from the bank’s self operated funds invested in non-bank and non-standard factors is about 652.3 billion yuan (this account is mainly a netting item. There may be errors between the financial factors and the actual value, plus other neglected derivative channels, so there may also be errors between the project and the actual value. It is suggested to consider it comprehensively with the financial factors); M2 of foreign exchange is about 6.2 billion yuan.
Due to the disturbance of the Spring Festival, we combined the data from January to February. According to the old statistics without goods base, M2 increased by 5.78 trillion yuan from January to February. According to the M2 derivation approach, the M2 derived from the lending of entities (plus write back and ABS) is about 5.13 trillion yuan; About 797.6 billion yuan of M2 was recovered due to financial factors such as government bond issuance; The derivative m2 of corporate bonds purchased by banks on their own account is about 110.2 billion yuan; The bank’s self operated funds invested in non-bank and non-standard and other factors, resulting in M2 of about 1.30 trillion yuan; The M2 invested in foreign exchange is about 39.5 billion yuan. Compared with January February 2021, M2 increased by 774.3 billion yuan, mainly due to the bank’s proprietary investment in non-bank and non-standard derivatives, M2 increased by 866.4 billion yuan, which also reflects the weak pattern of physical credit demand from January to February this year.
March forecast: M2 growth rate of 9.2%, social finance growth rate of 10.1%
Conclusion: disturbed by the epidemic in March, the financing demand of the real economy decreased, but it is expected that the credit supply in the field of anti epidemic is improved, and the overall new credit of our bank increased by about 300 billion yuan year-on-year. Structurally, it is expected that there are still bills and short-term loan impulse, and the overall demand for physical financing is still poor. We calculated that the growth rate of social financing in March was 10.1%, down 0.1 percentage points month on month. In March, M2 was 9.2%, unchanged month on month, mainly due to the increase of financial expenditure under the impact of the epidemic. As the impact of the epidemic subsides, we believe that the economy will continue to stabilize and recover in the second quarter, and the growth rate of social finance will also increase steadily. We maintain the forecast of 10.8% growth rate of social financing in the whole year.
We mainly predict according to the M2 derivative approach. We expect that in March 2022, M2 (excluding the goods base) will increase by about 4.48 trillion yuan, and the corresponding M2 growth rate will be (assuming that the goods base remains unchanged) 9.2%, unchanged month on month. Among them, the assumptions and forecasts of derivation of each channel are as follows:
In recent years, there has been little change in the share of foreign exchange. We simply assume that the change in the share of foreign exchange is 0 billion yuan.
M2 derived from real economy credit (plus write off and ABS) was about 2.58 trillion yuan, a year-on-year decrease of about 320 billion yuan. In March, due to the impact of the epidemic, the credit demand of the real economy weakened, but the credit supply in the field of anti epidemic is expected to be improved, and the overall new credit is expected to increase by about 320 billion yuan year-on-year. In the first quarter of 2022, the total new credit of the real economy was 7.56 trillion yuan, a year-on-year decrease of about 350 billion yuan.
The bank’s self purchase of corporate bonds is about 200 billion yuan.
Fiscal expenditure and other fiscal factors derive about 1.20 trillion yuan. Financial factors are difficult to predict. We mainly adjust the average value in the same period of three years from 2019 to 2021. The average value in 20192021 is 1.02 trillion yuan. Considering that the financial expenditure related to the epidemic will be increased, it is expected that the financial factor will be about 1.20 trillion yuan in March.
M2 derived from non-standard and non bank loans is about 500 billion yuan: the transparency of this part is very low. It is also a netting term in our M2 derived channel model, and the prediction accuracy is relatively low. After the end of the transition period of the new asset management regulations, the pressure of non-standard adjustment of banks decreased significantly. At the same time, due to the weak credit demand of the real economy, bank funds increased their investment in non bank from January to February, and this trend is expected to remain in March.
We predict that social finance will increase by 3.18 trillion yuan in March, with a year-on-year decrease of about 190 billion yuan, corresponding to a year-on-year growth rate of 10.1% at the end of the month, down about 0.1 percentage point month on month. Specifically, it is estimated that RMB loans (plus write off and ABS) will increase by 2.58 trillion yuan, entrusted loans and trust loans will decrease by 50 billion yuan, undiscounted bank acceptance bills will decrease by 230 billion yuan, corporate bonds will increase by 200 billion yuan, stock financing will increase by 60 billion yuan, and government bonds will increase by 500 billion yuan.
Investment advice
The impact of the epidemic on the economy in March is short-lived. At present, the epidemic has been effectively controlled. It is expected that the economy will return to the trend of stabilization and recovery in the second quarter. We judge that the steady growth policy will be strengthened after the epidemic, and the steady growth effect will be gradually verified. The valuation of the banking sector will be improved with the stabilization and improvement of the macro-economy, and the “over allocation” rating of the industry will be maintained. In terms of individual stocks, first, recommend Bank Of Chengdu Co.Ltd(601838) , which benefits from the steady growth policy. The development trend of Chengdu Chongqing economic circle is good. Infrastructure is an important starting point for this round of steady growth, and Bank Of Chengdu Co.Ltd(601838) will fully benefit. Second, it is recommended to recommend small and medium-sized banks with good regional economy and deep cultivation of local real economy. It is suggested to focus on Jiangsu Suzhou Rural Commercial Bank Co.Ltd(603323) , Jiangsu Zhangjiagang Rural Commercial Bank Co.Ltd(002839) , Bank Of Ningbo Co.Ltd(002142) , Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) and Wuxi Rural Commercial Bank Co.Ltd(600908) .
Risk tips
If the macroeconomic recovery is less than expected, it may affect the banking industry from many aspects, such as the negative impact of loose monetary policy on the net interest margin during the economic downturn, the impact of the unexpected decline in corporate solvency on the quality of bank assets, etc
