Key investment points
This week, the banking sector fell by 2.95% as a whole, outperforming the CSI 300 index by 1.24 percentage points. The top performers are: Bank Of Nanjing Co.Ltd(601009) (2.52%), Industrial And Commercial Bank Of China Limited(601398) (1.68%), Agricultural Bank Of China Limited(601288) (0.65%).
At the policy level, this week, the people’s Bank of China and the China Banking and Insurance Regulatory Commission intensively held important meetings: (1) a symposium on financial support for the real economy by the people’s Bank of China and the China Banking and Insurance Regulatory Commission; (2) The Party committee of the people’s Bank of China shall implement the work deployment of the financial commission of the State Council; (3) The CBRC held a meeting to implement the requirements of the special meeting of the financial commission of the State Council.
Strong performance of Chengnong Commercial Bank: last week Bank Of Nanjing Co.Ltd(601009) released the first quarterly report of 2022, which achieved double 20% + growth in revenue and net profit attributable to parent company, exceeding market expectations. This week, Jiangsu Zhangjiagang Rural Commercial Bank Co.Ltd(002839) , Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) , China Merchants Bank Co.Ltd(600036) also successively disclosed the first quarterly report. Among them, the growth rate of Jiangsu Zhangjiagang Rural Commercial Bank Co.Ltd(002839) return to parent net profit was close to 30%, continuing the strong growth of the annual report Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) revenue increased by 19.34%, and net profit attributable to parent increased by 23.38%, achieving strong growth China Merchants Bank Co.Ltd(600036) in the first quarter, the revenue increased by 8.54% and the net profit attributable to the parent company increased by 12.52%, basically in line with our expectations. We maintain our previous view and focus on reminding and optimistic about the possibility that the bank’s first quarterly report disclosed later will continue to exceed expectations, especially the urban commercial banks and rural commercial banks with developed regional economy, which are expected to continue the strong growth of 2021 annual report.
Investment suggestion: the previous policy level RRR reduction and the reduction of the upper limit of deposit interest rate of small and medium-sized banks are all conducive to the decline of bank debt cost. In March, the total amount of credit and social financing increased more than expected, reflecting that the area of the policy layer greatly promoted the landing of steady growth. Recently, intensive regulatory statements have guided banks to strengthen financial support for entities, and the efforts to stabilize growth have continued to increase. With the continuous improvement of real estate expectations, the banking sector is expected to continue its previous market performance. Considering the current overall undervalued level of the banking industry (CITIC) (0.63xpb / 5.4xpe), we continue to be actively optimistic about the valuation repair market of the banking sector under the background of steady growth.
Driven by the strong growth of banks’ first quarter quarter results, such as Bank Of Nanjing Co.Ltd(601009) , Bank Of Ningbo Co.Ltd(002142) , Industrial Bank Co.Ltd(601166) .
Capital price: this week, the exchange rate of RMB against the US dollar fell to 6.49, and the central bank invested 10 billion yuan in open market operation. The yield of 10-year Treasury bonds rose to 2.84%, and the yield to maturity of 10-year corporate bonds (AAA) rose to 3.75%. The local government debt interest margin narrowed, and the credit interest margin of urban investment bonds narrowed.
Financial products: in the second week of April (from April 11 to April 17), the total number of financial products issued was 319, the total number of expired products was 659, and the net maturity was 340. Compared with the previous week, the expected yield of financial products in one month decreased by -2.0bps.
Interbank certificates of deposit: the interest rates of interbank certificates of deposit in January, March and June this week (April 16-april 22) are 2.19% / 2.32% / 2.50% respectively.
640 interbank certificates of deposit were issued this week, raising 624.1 billion yuan. As of April 22, 2022, there were 16853 interbank certificates of deposit in stock, totaling 145287 billion yuan.
Risk tip: the quality of bank assets deteriorated beyond expectations, and the regulatory policies changed beyond expectations.
