Event: Recently, five banks including Societe Generale, Sunong, Changshu, Jiangsu and CITIC have successively disclosed the performance express of 2021. The annual performance growth rate increased compared with the first three quarters, and roe increased year-on-year; Reflect the continuous improvement of profitability. Meanwhile, the non-performing ratio of four banks decreased year-on-year, the provision coverage increased year-on-year, and the overall asset quality showed an improvement trend. We believe that there is a strong certainty in the improvement of industry profits and are optimistic about the banking sector, mainly based on the following logic:
Since the second half of 2021, the slowdown of economic growth and the risk exposure of real estate enterprises have coexisted, resulting in the continuous pessimism of the market on the banking sector. Since the beginning of July 2021, the banking sector has fallen by about 5%; The current valuation is only 0.65 times static Pb, at a historical low. We judge that the current valuation has fully reflected the pessimistic expectations of the market.
The policy environment has turned friendly, focusing on the possible positive catalysis of social finance and financial data.
In terms of monetary policy, the central bank comprehensively reduced the reserve requirement by 0.5 percentage points in July and December of 21, and added the reference of "giving full play to the dual functions of the total amount and structure of monetary policy tools and being more active and promising" at the 21q4 monetary policy regular meeting. We judge that monetary policy will be more proactive and friendly.
The fiscal policy is clear and more relaxed. The issuance of 21q4 local government bonds has been accelerated, and the Ministry of Finance recently held an Expert Symposium to clarify that the active fiscal policy will continue to be implemented in 2022. It is expected that the fiscal policy will gradually increase in the way, and the boosting effect of relevant infrastructure investment on the economy is worth looking forward to. The investigation and containment policy for local government implicit debt may only have a partial impact on the start-up time of infrastructure projects.
Correct the deviation of credit policy and increase easing. The correction signal of the recent real estate regulation policy is obvious. According to the credit data in November, the increase of residents' medium and long-term loans is considerable, reflecting that the bank has increased the investment of mortgage loan projects. In addition, the relevant leaders made a public speech and set the risk exposure of some real estate enterprises as individual events, saying that they would maintain the long-term healthy development of the real estate market and meet the reasonable capital demand. In addition to the correction of excessive tightening of credit policy, the overall easing signal is also significant. At the end of 2021, the bill interest rate decreased significantly, which reflects that under the current insufficient effective financing demand, the executive level increased bill discount to meet the requirements of credit easing.
Pay attention to the possible positive catalysis of forward-looking economic indicators such as social finance. On the whole, it is clear that the policy environment has changed to friendly; The steady growth effect of the policy needs to be gradually verified by relevant data. Generally speaking, social finance and financial data have good forward-looking prediction significance for economic trend. The social finance data in November reflects that the financing demand is still insufficient, and the inertial trend of the data partially lowers the market expectation. It is suggested to pay attention to the possible positive catalysis of the follow-up social finance data.
Investment strategy: select high growth track and high-quality banks with first mover advantage or good regional growth. At present, the correction of real estate regulation policies + the force of stable growth policies + deterministic and stable upward performance will help catalyze the market of the sector and enter the left opportunity period. It is recommended to select banks with first mover advantages in the field of wealth management, such as customer base, sales channels and product service system (such as China Merchants Bank Co.Ltd(600036) , Ping An Bank Co.Ltd(000001) ), and high-quality banks with location advantages and market-oriented system and mechanism ( Bank Of Ningbo Co.Ltd(002142) , Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) ).
Risk tip: the economy stalled downward, and the real estate regulation policies and regulatory policies changed unexpectedly.
