In 2022, bank stocks in the A-share market performed strongly. As of the closing on January 12, the Shenwan bank index had increased by 4.19%, ranking second among the 31 Shenwan level industries, second only to real estate.
This is related to the good performance expectations announced by a number of listed banks. Looking forward to the future, institutions generally predict that there is still an upward market in the banking sector. It is suggested to focus on the main lines of high-quality regional local banks and banks with stable credit supply in the beginning of the year.
share price collective strength
According to the data, as of January 12, the share prices of 41 A-share listed banks have risen collectively since 2022. Among them, Bank Of Chengdu Co.Ltd(601838) has increased by 16.5%, and the share prices of Bank Of Jiangsu Co.Ltd(600919) , Industrial Bank Co.Ltd(601166) , Jiangsu Suzhou Rural Commercial Bank Co.Ltd(603323) have increased by more than 10%.
The main funds are also stepping up the layout of the banking sector. According to the data, as of the closing on January 12, in the past five trading days, among the 31 Shenwan industries, the banking sector has become the sector with the largest net capital inflow, with a net inflow of 2.753 billion yuan, much higher than the second ranked communication sector (894 million yuan). Industrial Bank Co.Ltd(601166) and China Merchants Bank Co.Ltd(600036) have obtained the net inflow of main funds of 740 million yuan and 620 million yuan respectively in recent five trading days.
Foreign capital has also increased the layout of H shares in some banks. According to the data disclosed by the Hong Kong stock exchange, on January 7, UBS added 1558000 China Merchants Bank Co.Ltd(600036) H shares at an average price of HK $62.7550 per share. On January 5, JPMorgan Chase group added 11.7186 million China Merchants Bank Co.Ltd(600036) H shares at an average price of HK $61.4971 per share.
Shen Juan, chief analyst of Huatai Securities Co.Ltd(601688) big financial team, said that the good performance of the banking sector in January was related to three factors. First, performance release, better performance expectations drive the sector to achieve excess returns. Second, policy catalysis, the market has strong expectations for monetary regulation, and the banking business environment is expected to improve. Third, fund style switching. In January, institutional funds opened a new round of assessment cycle, and some funds were allocated to the bank sector for defense.
According to the reporter’s statistics, at present Bank Of Chengdu Co.Ltd(601838) , Industrial Bank Co.Ltd(601166) , Jiangsu Suzhou Rural Commercial Bank Co.Ltd(603323) , Bank Of Jiangsu Co.Ltd(600919) , Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) , China Citic Bank Corporation Limited(601998) have released the performance express of 2021, and the year-on-year growth rate of net profit is more than 10%, and Bank Of Jiangsu Co.Ltd(600919) is more than 30%.
Market certainty in January is high
For the recent good performance of bank stocks, Everbright Securities Company Limited(601788) Wang Yifeng, chief analyst of banking industry, believes that the rise of bank stocks is still in the middle, optimistic about the performance of the bank sector for some time in the future, and the market uncertainty in January is high. Looking forward to 2022, it is expected that there will be strong support for the annual revenue of the banking sector, and the profit growth rate will be slightly higher than the revenue by about 2 percentage points.
As for how to lay out the banking sector in the first quarter, Wang Yifeng’s team suggested that investors grasp three main lines: the first is the rebound driven by the real estate field, the second is the steady operation of high-quality regional local banks, and the third is the “head wild goose” big bank with stable credit supply in the beginning of the year.
Monetary policy and fiscal policy are also expected to become a booster for the good of the banking industry. Shen Juan’s team said that it is expected to further reduce interest rates and reserve requirements in the first quarter of 2022, superimpose the pre issuance of special bonds, and take care of the bank’s business environment. Since mid December 2021, funds have been flowing from the high valuation sector to the low valuation sector, and the market style has changed. At present, the valuation of the banking sector is low, while the dividend yield is close to 5% and the allocation value is high. It is recommended to pay attention to the repair opportunities of the sector.
It is worth noting that some institutions have different views on the performance of the banking industry in 2022. Fitch Bohua pointed out that the banking industry will still face the uncertain impact of the epidemic in the future. The credit demand may not be satisfactory in 2022, and higher capital requirements may become a limiting factor for the continued expansion of the industry. It is expected that the credit growth rate will be neutral in 2022, and the growth rate of net profit will slow down compared with 2021.
