Market Review
Last week (4.25-4.29), securities, insurance and diversified finance sectors rose or fell by – 3.2%, – 4.8% and – 6.6% respectively. The Shanghai Composite Index, Shenzhen Composite Index and gem rose or fell by + 2.4%, – 1.84%, + 0.98% respectively, and the Shanghai and Shenzhen 300 rose by 0.1%. The excess returns of securities, insurance and diversified financial sectors relative to Shanghai and Shenzhen 300 were – 3.3%, – 4.9% and – 6.7% respectively. Since the beginning of 2022, securities, insurance and diversified finance sectors have fallen by 25.1%, 13.5% and 20.6% respectively.
Core view
Securities: the first quarterly report of the industry was disclosed last week. The operating revenue of 48 listed companies in the sector was 103091 billion yuan, a year-on-year increase of – 28.4%; The net profit attributable to the parent company was 24.412 billion yuan, a year-on-year increase of – 45.3%, mainly due to the decline of the overall market, the downturn of the fund consignment business, the proprietary business of securities companies and the consignment business of financial products, or affecting the performance of the first quarterly report of the industry. 1) securities companies should have two business lines that can grow rapidly and should pay attention to this stage of growth; And 2) securities companies with low valuation, strong wealth management business and high performance flexibility after the implementation of bad news such as share allotment and first quarter report.
Insurance: the first quarterly report of the industry was disclosed last week. Liability side: the liability side remained depressed in the first quarter, and the superimposed product structure changed from serious illness insurance to increased lifetime insurance. In the first quarter, the new single premium of insurance enterprises and NBV will be under pressure. Asset side: the market downturn affects the investment income of insurance enterprises and drags down the performance of net profit.
Liquidity: the central bank invested 10 billion yuan last week.
Investment advice
It is suggested to pay attention to: China stock market news, which still has good performance and highlights its scarcity and uniqueness when the overall performance of the industry is under pressure. Related targets: Orient Securities Company Limited(600958) , with strong wealth management business, Ping An Insurance (Group) Company Of China Ltd(601318) , with the synergy of “Bank + insurance” group and relatively stable investment.
Risk tips
The covid-19 epidemic worsened, China’s economic pressure increased, and the decline of long-term interest rate exceeded expectations.
