Weekly report of banking industry: the first quarterly report is presented one after another, and the performance outlook is stable

The index volatility of the banking sector increased this week (4.18-4.22). After the overall sharp retreat, it increased sharply on Friday, slightly lower than the level at the end of last week. As of the last trading day of this week, the price to book ratio was 0.63, the valuation level fell slightly on a weekly basis, and the market heat continued to decline. The average daily trading volume was 794.3 billion yuan (week on week - 12.2%). This week, the central bank's wide caliber (including 7-day reverse repurchase) net withdrawal was 10 billion yuan, and the 7-day reverse repurchase interest rate remained 2.10%, The overall liquidity is at a good level; On Friday (April 22), it was announced that the weighted value of dr007 was 1.54%, which was lower than the reverse repo rate, the liquidity continued to maintain a good trend, and the guidance level of interest rate was well conducted.

Emotional disturbance does not change the nature of performance stability. This week, the valuation level of China Citic Bank Corporation Limited(601998) sector decreased, and the dynamic toughness of valuation repair is still strong. At the international level, the hawkish style of the federal reserve tends to be strong, the US dollar index increases steadily, and the pressure of non US currency devaluation increases. We believe that the moderate devaluation of RMB is conducive to exports, and the current interest rate level is in a moderate downward channel. The LPR announced in April remains unchanged, and the interest rate guidance level remains stable, reflecting the relatively mild policy adjustment; At the Chinese level, China's logistics and supply are under pressure from the spread of the epidemic. Many ministries and commissions actively implement policies to strengthen China's financial and monetary policy support and accurately help small and micro enterprises. At the beginning of this week, due to the selling pressure caused by the sudden change of China Merchants Bank Co.Ltd(600036) management, China Merchants Bank Co.Ltd(600036) fell by more than 9% this week. From the first quarter performance of the company and the work presided over by Vice President Wang, who has long working experience in China Merchants Bank, we believe that the overall operation of the company will continue the previous strategy and retail 3.0 style in the future, and the competitiveness of the company will remain. This week, Jiangsu Zhangjiagang Rural Commercial Bank Co.Ltd(002839) and Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) released their first quarterly reports, with good performance, rapid growth in revenue and net profit attributable to the parent company, and excellent opening performance of the banking industry. Under the background of poor performance in the current equity market, the stability of banking performance will establish a comparative advantage for them, and the valuation level is currently at an all-time low. We continue to recommend the banking sector.

We will make every effort to provide financial services for epidemic prevention and control and economic and social development. On April 18, the people's Bank of China and the State Administration of foreign exchange issued the notice on doing a good job in epidemic prevention and control and financial services for economic and social development, which put forward 23 policies and measures to strengthen financial services and strengthen support for the real economy from three aspects: supporting the relief of troubled subjects, unblocking the national economic cycle and promoting the development of foreign trade and exports. Specifically, we should give full play to the dual functions of the total amount and structure of monetary policy and increase financial support for industries, enterprises and people affected by the epidemic; We should pay close attention to the implementation of financial support policies for the real economy; We will extend the policy of facilitating trade and foreign exchange receipts and payments of high-quality enterprises to the whole country, and carry out pilot projects of higher-level RMB settlement facilitation and enterprise foreign debt facilitation. We believe that the current multi-dimensional support for China's economic recovery and development and the continuous support of stable service policies for foreign trade with good development trend are the concrete embodiment of the implementation of China's international double cycle strategy.

Market performance

The banking sector index fell 2.95% this week, outperforming the market. This week, the Shanghai Composite Index fell 3.87%, the Shenzhen Component Index fell 5.12%, the gem index fell 6.66%, and the Shanghai and Shenzhen 300 index fell 4.19%. The recommendations focus on high-quality joint-stock banks ( Tsingtao Brewery Company Limited(600600) 36 , Bank Of Nanjing Co.Ltd(601009) , Bank Of Hangzhou Co.Ltd(600926) ).

Risk tips

Repeated epidemic risk, tightening monetary policy, increasing risk of non-performing rate, outbreak of major risks and events of default, etc.

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