From the perspective of banks, social finance in December: the total amount is stable and the structure is weak; Credit is expected to improve in January

In December, social finance increased by 2.37 trillion, an increase of 650.8 billion over the same period in previous years. The new scale of social finance is close to the market expectation, which is about 2.43 trillion. The year-on-year growth rate of stock social finance continued to rise, with a year-on-year increase of 10.29%, up 0.17 percentage points from November. The year-on-year growth rate of social finance stabilized mainly driven by government bonds, followed by corporate bonds. Structural analysis: in December, social finance continued the characteristics of stable aggregate and weak structure. The newly increased scale basically meets the expectations, mainly supported by the continuous development of financial postposition. Looking forward to the next 22 years, it is not expected that the goal of maintaining stable growth of social finance will be achieved, and the target planning of new bank credit is roughly the same as that in the past 21 years or slightly increased; Fiscal counter cycle + cross cycle force will form a certain bottom support. 1. On balance sheet credit. On balance sheet credit. In December, the new credit increased by 1 trillion yuan, a decrease of 111.2 billion yuan compared with the same period in previous years. However, the new credit in the first quarter of 22 is expected to be no less than that in the same period of 21 years. In combination with our recent industrial chain research, banks generally said that the annual new credit target would be roughly the same as or slightly higher than that in 21 years, with sufficient project reserves; Structurally, it will focus on high-end manufacturing, new kinetic energy and green finance. 2. Off balance sheet credit. Under the background of bill impulse, the net financing scale of new undiscounted bank acceptance bills off the balance sheet decreased significantly. In December, undiscounted bank acceptance bills increased by – 141.8 billion yuan, an increase of 79.8 billion yuan over the same period of previous years. 3. Under the background that trust regulation has not been relaxed, new trusts continue to fall. In addition, what is consistent with our judgment is that although the non-standard reduction pressure did not decrease in December 21, due to the large scale of trust + entrusted loan compression in December 20, the drag on the year-on-year growth rate of social finance will not be so large. 4. Government bonds continued to develop, with a net increase of $1.17 trillion, and financial backwardness formed a foundation for social finance. In the whole year, 7 trillion government bonds were added, and the remaining amount of about 400 billion is expected to form a certain bottom support for the economy at the beginning of the year. 5. In the same period of 20 years, impacted by the Yongmei coal incident, the net financing scale of corporate bonds was low, so the year-on-year increase of corporate bonds in December 21 was large. New corporate bond financing was 222.5 billion yuan, an increase of 178.9 billion yuan over the same period in 20 years. 6. The scale of stock financing remained high.

In December, the scale of new credit increase loans was slightly lower than the market expectation: the new loans were 1.13 trillion yuan, the market expectation was 1.24 trillion yuan, and the new scale decreased by 130 billion yuan compared with the same period of 20 years. The credit balance increased by 11.6 points year-on-year, and the growth rate decreased by 0.1 percentage points month on month. Structural analysis: at the end of the year, the bank retained medium and long-term project reserves until the beginning of the year, so it still relied on bills and short loan impulse to maintain scale expansion in December. 1. Resident loans. Residential mortgages have fallen. In October and November, the bank accelerated the approval of the backlog of housing mortgages in the early stage, while the increment in December fell, which is expected to fall due to the weak impact of the demand side (mortgage interest rates in some cities fell slightly), and the mortgage incoming parts are expected to fall. In order to make a good start at the beginning of the year, the bank may keep the reserves until the beginning of the year. In December, the net increase in residential mortgage loans was 355.8 billion yuan, a decrease of 83.4 billion yuan compared with the same period in 20 years. It is expected that there will be repeated outbreaks of consumer loans, and the net increase scale will continue to be lower than that in the same period of 20 years. In December, the net increase in short-term loans for residents was only 15.7 billion yuan, a decrease of 98.5 billion yuan compared with the same period in 20 years. 2. Enterprise loans. The medium and long-term weak growth of enterprises is expected to be mainly dragged down by the slowdown of manufacturing expansion. In December, medium and long-term corporate loans increased by 339.3 billion, down 210.7 billion compared with the same period in 20 years.

At the end of the year, the expected maturity scale of enterprise short-term loans is large, and the net financing is negative; Notes continue to underpin impulse. In December, the net financing of enterprise short-term loans and bills were – 105.4 billion and + 408.7 billion respectively, with an increase of + 204.3 billion and + 74.6 billion yuan compared with the same period of 20 years. Although the net increase of short-term loans was negative, it was much higher than that in the same period of 20 years, and the bank still did impulse operation. The same is true for bills. The bill interest rate was close to zero in December.

The year-on-year growth difference of m2-m1 was flat month on month: the year-on-year growth of M1 and M2 both rebounded. M1 growth rate is more related to real estate sales. It is expected that M1 growth rate will also rise slightly as the financing margin of real estate enterprises recovers; One of the sustainability of the rise is to track the reconstruction of the virtuous cycle of the real estate chain; The other is the recovery of subsequent business operations as the structural monetary policy and loose policies such as RRR reduction slow down the business pressure. The growth rate of M2 rebounded under the low base in the same period of 20 years. In the past 20 years, the growth rate of social finance has converged greatly, and the growth rate of M2 has declined significantly. In December, M0, M1 and M2 increased by 7.7%, 3.5% and 9% respectively year-on-year, with changes of + 0.5, + 0.5 and + 0.5 percentage points compared with the year-on-year growth rate of the previous month.

Investment suggestion: at present, the safety margin of the sector is relatively high, and the asset quality constructs the safety margin of bank stocks. 1. The core investment logic of bank stocks is macroeconomic. For details, see our relevant in-depth report “how do bank stocks perform when prices rise? – summary and comparison of multiple rounds of performance of bank stocks in China and the United States”. We expect that the asset quality of listed banks will be stable in the next few years, which will build the safety margin of bank shares. 2. Banks have two main lines of stock selection. One is our long-term proposal to continue to embrace the core assets of banks: China Merchants Bank Co.Ltd(600036) , Bank Of Ningbo Co.Ltd(002142) , Ping An Bank Co.Ltd(000001) . Their performance is highly sustainable and scarce. The boom of high-quality banks is certain and long-term. First, these scarce high-quality banks have a “market-oriented gene” and “run to make money” in the industry of “lying to make money”; Therefore, in the era of banking differentiation, their growth can be valued continuously. Second, these banks occupy the sunrise track of the financial industry: wealth management and retail; Our in-depth report estimates that the growth rate of wealth management profit in the next decade will be 21% (see detailed calculation of income, profit and market value of “wealth management industry”: the golden track with a market value of 10 trillion). The other is to choose banks with undervalued value, safe asset quality and expected successful transformation, and be optimistic about Postal Savings Bank Of China Co.Ltd(601658) , Bank Of Jiangsu Co.Ltd(600919) , Bank Of Nanjing Co.Ltd(601009) and Industrial Bank Co.Ltd(601166) .

Risk warning event: the economic downturn exceeded expectations.

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