Core view
Event: on April 11, 2022, the central bank released the financial statistics for March. In March, RMB loans increased by 3.13 trillion, an increase of 400billion over the same period of last year, and the market expected 2.64 trillion; At the end of March, the balance of RMB loans increased by 11.4% year-on-year, the growth rate was the same as that at the end of last month, 1.2 percentage points lower than that in the same period of last year; In March, social finance increased by 4.65 trillion, an increase of 1.27 trillion year-on-year, and the market is expected to reach 3.63 trillion; The balance of social finance increased by 10.6% year-on-year, 0.4 percentage points higher than the growth rate at the end of last month.
The total amount of credit exceeded expectations, but the structural level is still difficult to improve. In March, RMB loans increased by 3.13 trillion, and the market is expected to be 2.64 trillion. In terms of credit structure, residents’ short-term loans decreased by 139.4 billion year-on-year, which we believe is mainly due to the impact of the epidemic and the inhibition of residents’ travel and consumption behavior; Medium and long-term loans to residents decreased by 250.4 billion year-on-year, reflecting that real estate sales are still weak, which is consistent with the data that the transaction area of commercial housing in large and medium-sized cities decreased by 47% year-on-year on March 30. In March, corporate loans increased by 2.48 trillion, an increase of 880 billion year-on-year, but the term structure is still dominated by short-term loans and bill financing. Enterprise short-term loans and bills increased by 434.1 billion and 471.2 billion respectively year-on-year (vs. 161.4 billion and 490.7 billion respectively year-on-year in February), and enterprise medium and long-term loans increased by 14.8 billion year-on-year (vs. 594.8 billion less year-on-year in February), indicating that the credit demand has been repaired. Overall, although the total amount of credit exceeds market expectations, the structural level still needs to be improved. Looking ahead to the follow-up, considering that the policy layer has repeatedly stressed “expanding the scale of new loans” since the beginning of the year, and made it clear that the policy should rely on the front force and timely force. Under the requirements of stabilizing credit, we believe that there is still some support for the release of follow-up credit, and it is expected that infrastructure, Pratt & Whitney, emerging manufacturing and real estate are still the focus of the policy.
Credit and government bonds were the main support items of social finance in March, and the growth rate of social finance stock increased month on month. In March, the scale of social finance was 4.65 trillion, and the market expected 3.63 trillion. The growth rate of social finance stock increased by 0.4 percentage points to 10.6% month on month. In terms of structure, RMB loans with social finance caliber reached 3.23 trillion, an increase of 481.7 billion year-on-year; The net financing of government bonds increased by 705.2 billion, an increase of 392.1 billion year-on-year, which is expected to be mainly due to the faster progress of local bond issuance than the same period last year; In March, off balance sheet financing was 13.3 billion yuan, an increase of 426.2 billion yuan year-on-year, indicating that the negative impact of off balance sheet financing on social finance slowed down with the expiration of the transition period of new asset management regulations. In terms of direct financing, corporate bond financing was 389.4 billion, an increase of 8.7 billion year-on-year, and stock financing was 95.8 billion, an increase of 17.5 billion year-on-year, both slightly higher than the same period last year.
Deposit derivatives increased and M2 growth picked up. In March, M2 increased by 9.7% year-on-year and 0.5% month on month, which is expected to be mainly due to the increase in deposit derivatives brought about by the recovery of credit data in March. M1 was 4.7% year-on-year, unchanged month on month. In March, deposits increased by 4.49 trillion yuan, an increase of 860 billion yuan year-on-year. From the perspective of deposit structure, residents’ and enterprises’ deposits increased by 762.3 billion yuan and 922.1 billion yuan year-on-year respectively, and non bank deposits and fiscal deposits increased by 304 billion yuan and 357.1 billion yuan year-on-year respectively. The migration of non bank and fiscal deposits to residents’ and enterprises’ deposits is in line with the law at the end of the quarter.
Investment proposal Yu investment target
The total amount of credit data in March was better than expected, and the effect of stable credit policy initially appeared. At present, the disturbance of the epidemic and the downward pressure on the economy still exist. Under the pressure of steady growth, we expect that the policy will continue to support the economy, and there is still enough support for bank operation. The recent trend of bank stocks is strong, but the overall valuation level is still at a historical low. As of April 11, the static Pb valuation of the sector is only 0.64x. Looking forward to the second quarter, we are still optimistic about the repair opportunities of sector valuation brought by the “correction” of overly pessimistic market expectations, and continue to maintain the “optimistic” rating of the industry.
In terms of individual stocks, it is suggested to pay attention to: 1) value targets with excellent historical profitability and leading asset quality represented by China Merchants Bank Co.Ltd(600036) ( China Merchants Bank Co.Ltd(600036) , Unrated) and Bank Of Ningbo Co.Ltd(002142) ( Bank Of Ningbo Co.Ltd(002142) , Unrated); 2) Undervalued targets represented by Bank Of Communications Co.Ltd(601328) ( Bank Of Communications Co.Ltd(601328) , Unrated), Postal Savings Bank Of China Co.Ltd(601658) ( Postal Savings Bank Of China Co.Ltd(601658) , buy), Industrial Bank Co.Ltd(601166) ( Industrial Bank Co.Ltd(601166) , Unrated); 3) Urban rural commercial banks with strong regional economic advantages represented by Shanghai Rural Commercial Bank Co.Ltd(601825) ( Shanghai Rural Commercial Bank Co.Ltd(601825) , Unrated), Bank Of Chengdu Co.Ltd(601838) ( Bank Of Chengdu Co.Ltd(601838) , Unrated), Bank Of Nanjing Co.Ltd(601009) ( Bank Of Nanjing Co.Ltd(601009) , Unrated), Bank Of Jiangsu Co.Ltd(600919) ( Bank Of Jiangsu Co.Ltd(600919) , Unrated).
Risk tips
The economic downturn exceeded expectations, resulting in higher than expected pressure on the asset quality of the industry; The liquidity risk of real estate enterprises continues to spread, disturbing the asset quality of banks; The duration and coverage of the epidemic exceeded expectations.
