Sector performance: last week, the banking sector fell 0.12%, outperforming the CSI 300 index by 2.02pct (CSI 300 index fell 2.14%); According to the first level industry classification standard of CITIC, it is listed as 10 / 29 of all industries. In terms of individual stocks, Ping An Bank Co.Ltd(000001) (3.27%), Bank Of Nanjing Co.Ltd(601009) (2.66%), Xiamen Bank Co.Ltd(601187) (2.65%), Bank Of Chongqing Co.Ltd(601963) (2.19%), China Citic Bank Corporation Limited(601998) (1.89%) led the increase Bank Of Changsha Co.Ltd(601577) (- 3.76%), Wuxi Rural Commercial Bank Co.Ltd(600908) (- 2.90%), Bank Of Chengdu Co.Ltd(601838) (- 2.15%), Postal Savings Bank Of China Co.Ltd(601658) (- 1.71%), China Construction Bank Corporation(601939) (- 1.66%) led the decline.
Compared with last week’s open market, the central bank’s net operation funds of + 1.3 billion and + 1.007 billion were the same as that of last week’s open market, respectively; 1. 3. The issuing interest rate of 6-month interbank certificates of deposit was + 6BP, + 2bp and the same as that of last week, with stable and abundant liquidity.
Key news tracking:
Rating of financial institutions of the central bank: the number of high-risk institutions decreased, showing the characteristics of regional concentration. On March 25, the central bank announced the rating results of financial institutions in the fourth quarter of 2021. Most institutions are within the security boundary (level 1-7), and high-risk institutions (level 8-D) have decreased for six consecutive quarters, more than half of the peak pressure drop. At present, the total assets of 316 high-risk institutions account for only 1% of the total assets of the banking industry. (1) From the perspective of institution types, high-risk institutions are mainly distributed in rural financial institutions and urban commercial banks. Large banks (24, accounting for 71% of assets) have the best rating results. Among small and medium-sized banks: foreign banks and private banks have good rating results, and there are no high-risk institutions; 10% of urban commercial banks are high-risk institutions, and their assets account for 3% of all urban commercial banks; Rural cooperative institutions (including rural commercial banks, rural cooperative banks and rural credit cooperatives) and rural banks have the highest risk. The number of high-risk institutions is 186 and 103 respectively, and their assets account for 5% and 7% of this type of institutions respectively. (2) From the perspective of regional distribution, the number of high-risk institutions in stock is characterized by regional concentration. There are no high-risk institutions in 11 provinces (cities and districts) in China, and 13 provinces (cities and districts) have single digit high-risk institutions. High risk institutions in stock are mainly concentrated in four provinces. According to the previous central bank’s China financial stability report 2021, as of 2q21, there are a large number of high-risk institutions in Liaoning, Gansu, Inner Mongolia, Henan, Shanxi, Jilin, Heilongjiang and other provinces.
Several banks issued annual reports: excellent performance and improved asset quality. Last week, “CITIC, Societe Generale, Everbright, transportation, Bank Of Qingdao Co.Ltd(002948) ” disclosed the 2021 annual report one after another. The revenue of most listed companies increased steadily, and the growth rate of net profit was high; The main drivers include scale, non interest income and provision back feeding. There is still pressure on the net interest margin. Banks mainly maintain a stable interest margin through the optimization of asset liability structure. Marginal improvement of asset quality indicators and controllable risks in the real estate field; The level of provision coverage was further improved.
Investment suggestion: from the perspective of policy, considering the current economic pressure in China, it is expected that the steady growth policy is expected to continue to make efforts in real estate and infrastructure investment, driving the expected repair of the market. From a fundamental point of view, the industry performance is uncertain, and the potential adverse pressure is small. The accelerated transformation of financial management business will contribute to new profit growth points. From the perspective of capital, the proportion of institutional heavy positions held in the sector is at a historically low level, and there is little room for further reduction. The current sector is only 0.59 times the static Pb valuation, which is at a historical low. We believe that the credit easing policy continues to work and the valuation repair market of the banking sector is worth looking forward to. It is recommended to select banks with customer base, sales channels and product service system first mover advantages in the field of wealth management ( China Merchants Bank Co.Ltd(600036) , Ping An Bank Co.Ltd(000001) ), high-quality small and medium-sized banks with location advantages and market-oriented system mechanism ( Bank Of Ningbo Co.Ltd(002142) , Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) , etc.).
Risk tip: the economy stalled and went down, and the real estate regulation policies and regulatory policies changed unexpectedly.
