Key investment points:
In March, Shenwan bank recorded an increase or decrease of – 1.64%, outperforming the Shanghai stock index by 4.43% and the Shanghai and Shenzhen 300 index by 6.20%. The monthly increase or decrease ranked sixth among Shenwan’s 31 primary industries. As of March 31, Shenwan bank increased or decreased by 1.66% during the year, ranking fourth among Shenwan’s 31 primary industries. Bank of Lanzhou led the rise (11.42%).
Banking sector valuation V-shaped rebound. As of March 31, the overall price earnings ratio (historical TTM) of the banking sector was 5.08x, a decrease of 0.09x compared with the end of last month and a discount of 70.23% compared with the valuation of a shares; The overall price to book ratio of the sector was 0.60x, a slight decrease of 0.01x compared with the end of last month, with a discount of 64.96% compared with the valuation of a shares.
As of March 31, the maturity yield of AAA 1m / 3m / 6m interbank certificates of deposit was 2.01%, 2.33% and 2.42% respectively, up / down – 24bp / 0bp / 2bp respectively compared with the end of February. The maturity yield of AA grade 1m / 3m / 6m interbank certificates of deposit was 2.12%, 2.48% and 2.60% respectively, an increase / decrease of – 24bp / 4bp / 7bp compared with the end of February. The expected annual rate of return of financial products increased month on month, and the overall trend was stable and downward. On a month on month basis, the yields of 1-week, 9-month and 1-year financial products decreased by 18bp / 8bp / 10bp respectively compared with the end of February, and the yields of other term financial products increased on a month on month basis. On a year-on-year basis, the yield of financial products decreased significantly in one week and two weeks, down 57bp / 39bp respectively. In March, the weighted average interest rate of interbank lending was 2.07%, up 1bp month on month and 6BP year-on-year.
Investment suggestion: with the changing situation outside China and the transformation of market style, bank stocks went out of the V-shaped reversal market in March. Listed banks have successively disclosed their 2021 annual reports, with good overall operating performance and continuous improvement in asset quality, providing a strong driving force for the valuation and repair of the banking sector. Take advantage of the strategic layout of the bank to get out of the differentiated valuation. In terms of policy, the orientation of seeking progress while maintaining stability remains unchanged, and commercial banks will continue to expand credit supply; Structurally, it pays attention to the loan delivery in some fields, and the business maintains an orderly expansion. It is suggested to pay attention to high-quality banks: China Merchants Bank Co.Ltd(600036) , Bank Of Ningbo Co.Ltd(002142) , Industrial Bank Co.Ltd(601166) , Postal Savings Bank Of China Co.Ltd(601658) , Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) , Bank Of Jiangsu Co.Ltd(600919) , Bank Of Chengdu Co.Ltd(601838) . Maintain the rating of “synchronous market” in the industry.
Risk tip: economic growth is less than expected; Policy adjustment exceeded expectations; Asset quality declined.
