Macro balance sheet summary:
[central bank side] in April, it is expected to reduce the reserve requirement and interest rate: in February, the total scale of the central bank's balance sheet widened, and the increase of creditor's rights to deposit companies is the main reason. In March, MLF continued to increase the volume without increasing the price, waiting for the best easing window period in the second quarter. We believe that when the follow-up economic growth data show signs of falling short of expectations, the aggregate monetary policy can still be expected, so there is still a loose window period in the second quarter. At present, the real estate continues the downward trend, and it is not ruled out that the 5-year LPR will be lowered to release the policy signal and help the real estate sales. In addition, the RRR reduction can directly reduce the cost of bank liabilities. At present, the net interest margin of banks is still low. If the RRR reduction can increase the space for banks to continue to make profits for the real economy in the future.
[bank side] the credit is not stable, and the loose monetary policy is still needed: from the perspective of the balance sheet of commercial banks, the part of commercial banks' creditor's rights to the government stabilized after the marginal improvement in September last year, reflecting the pull of the current fiscal force on the economy. At the same time, the financing situation of the entity enterprise end in February failed to continue the strength in January, reflecting the current credit instability; Whether the follow-up credit extension can come on schedule still needs the support of the credit data in March; The residents' financing continued to be weak, which was still dragged down by the real estate. In the follow-up, China's economy is greatly affected by the epidemic, and overseas geopolitical disputes have not been settled peacefully. In the follow-up, it is still necessary to relax the implementation of monetary policy and promote good credit.
[financial side] fiscal revenue and expenditure accelerated significantly in February, and kept moving forward: looking forward to the second quarter, the tax reduction policy will be upgraded to ensure the continuous development of market main body policies. In the 2022 government work report, it is expected that the amount of tax cuts and fee reductions for small and medium-sized enterprises will more than double to 2.5 trillion yuan. At the same time, both the previous epidemic in Shenzhen and the current epidemic in Shanghai have had a great negative impact on China's economy in the first half of the year. Therefore, since March, Shanghai, Shenzhen and other places have successively launched a number of policies to help enterprises rescue, in order to reduce costs for small and micro enterprises and further achieve stable growth. We believe that with the implementation of various tax reduction policies, the growth rate of fiscal revenue will slow down in the second quarter, and fiscal expenditure will remain high.
[enterprise side] in February, PPI was greatly disturbed by geographical conflicts, and the improvement of enterprise profit structure was interrupted: Recently, affected by the sharp rise in global crude oil prices caused by the situation in Russia and Ukraine, it is expected that the year-on-year growth rate of PPI may fall slower than expected after March. However, with the subsequent peaceful landing of Russia Ukraine negotiations, crude oil prices may gradually approach the peak, and commodity prices are expected to accelerate the decline in the second half of the year. Previously, the improvement of upstream and downstream profit structure of industrial enterprises was interrupted by the continuous high level of PPI, and the subsequent imbalance of upstream and downstream profits will continue in the first half of the year. At present, the epidemic situation in China is distributed in many places, and the form is still severe. It is expected to have a great impact on the revenue and profits of industrial enterprises in March and April. We believe that the active destocking cycle of industrial enterprises will continue, and it is difficult for revenue to rebound in the short term.
[residential side] the policy of the third and fourth tier cities is relaxed, and the policy is expected to increase its force at both ends of supply and demand: at present, the third and fourth tier cities with great pressure on the real estate market have successively relaxed the purchase and sale restrictions, and it is expected that more demand side regulation and control will be relaxed in the future. In the follow-up, as the financing policies of real estate enterprises continued to correct, the central bank released a signal that real estate credit would be moderately repaired and maintained within a reasonable range. We expect real estate sales, construction and real estate investment to pick up year-on-year in the second quarter of 2022. On the one hand, due to the dissipation of the impact of the high base, on the other hand, we have received the promotion from both sides of policy supply and demand to help repair real estate credit.
