Key investment points:
The index volatility of the banking sector increased this week (4.11-4.15), and gradually increased to the level of last weekend after the overall sharp retreat. As of the last trading day of this week, the price to book ratio exceeded LF0 64pb, the valuation level declined slightly on a weekly basis, and the market heat decreased. The average daily trading volume was 905.1 billion yuan (on a weekly basis – 3.4%). This week, the central bank’s wide caliber (including 7-day reverse repo) net recovery was 50 billion yuan, the 7-day reverse repo interest rate remained at 2.10%, and the overall liquidity was at a good level; On Friday (April 15), it was announced that the weighted value of dr007 was 1.73%, which was lower than the reverse repo interest rate, the liquidity continued to maintain a good trend, and the interest rate guidance level was well conducted.
The RRR reduction was implemented as scheduled and quickly to rescue and support the economy. This week, the valuation level of China Citic Bank Corporation Limited(601998) sector remained stable, and the valuation repair power and toughness were strong. At the international level, geopolitical risk spillover and global inflationary pressure continued, and commodity prices remained high; At the Chinese level, China is facing the impact of the spread of the epidemic, especially in the economic center of the Yangtze River Delta, which has been greatly affected by the continuous epidemic. Under this background, on April 15, the central bank announced that it would officially reduce the deposit reserve ratio of financial institutions by 0.25 percentage points on April 25, and it is expected to release 530 billion yuan of long-term funds. This is a comprehensive reduction. For urban commercial banks that do not operate across provinces and agricultural commercial banks with deposit reserve ratio higher than 5%, it will be reduced by 0.5 percentage points, Fully support small and micro enterprises and “agriculture, rural areas and farmers”. The RRR reduction will help optimize the capital structure of financial institutions, increase long-term stable funds and enhance the capital allocation capacity of financial institutions, which can more effectively support the real economy. In addition, it will help financial institutions actively use the RRR reduction funds to support industries and small, medium and micro enterprises seriously affected by the epidemic, and reduce the comprehensive financing cost of society by reducing the capital cost of financial institutions, Provide strong support for economic recovery and development.
Financial support to ensure smooth freight logistics and open up the channels blocked by entities. Recently, due to the great pressure of the spread of the epidemic in the Yangtze River Delta and the improvement of control measures, the poor logistics has attracted great attention of the central and local governments. The smooth logistics ensures the uninterrupted production of enterprises in the epidemic area, which is of great significance to the economic recovery. From the perspective of financial service entities, this week, the China Banking and Insurance Regulatory Commission issued the notice of the general office of the China Banking and Insurance Regulatory Commission on financial support for freight logistics, which requires all financial institutions to fully assist in ensuring smooth logistics and ensuring the safety of the industrial chain. In the short term, we believe that due to the disturbance of the epidemic in the short term, the staged rebound of the banking sector is not easy to exceed expectations. However, from the medium and long-term perspective, the increase of interest income and non interest income brought by the expansion of scale and the deepening of wealth management is predictable, stable, and the risk is generally controllable. At present, the Pb level of the banking sector is still at the low level in the past decade, so the logic of the overall valuation improvement remains unchanged.
Market performance
The banking sector index fell 0.2% this week, outperforming the broader market. This week, the Shanghai Composite Index fell 1.25%, the Shenzhen Component Index fell 2.6%, the gem index fell 4.26%, and the Shanghai and Shenzhen 300 index fell 0.99%. The recommendations focus on high-quality joint-stock banks ( Tsingtao Brewery Company Limited(600600) 36 , Bank Of Nanjing Co.Ltd(601009) ).
Risk tips
Repeated epidemic risk, tightening monetary policy, increasing risk of non-performing rate, outbreak of major risks and events of default, etc.
