Key investment points:
In 2021, large state-owned banks will take the lead, and Postal Savings Bank Of China Co.Ltd(601658) flexibility will be the strongest. 2021 is a year of good performance for large state-owned industries, with revenue and net profit attributable to parent companies steadily exceeding expectations. Taking the 9% year-on-year growth rate of M2 in the same period in December 2021 as the yardstick, the Postal Savings Bank Of China Co.Ltd(601658) revenue significantly exceeded the same period, reaching 11.4%, and the net profit attributable to the parent company increased by 19% year-on-year in the same period, with the strongest elasticity. For the whole year of 2021, the interest income of large state-owned banks increased steadily under the background of the decline of net interest margin and the steady growth of scale; The handling fees and commissions benefited from the increasing activity of trend wealth management, which continued to increase compared with 2020; The non-performing rate declined significantly compared with the same period, the asset quality and provision increased steadily, and the ability to cope with future downward pressure and risk offset was enhanced. The cost investment will increase in 2021 to improve the technology level of banks.
In the first quarter of 2022, the performance slowed down, and the non interest income was under pressure. In the first quarter of 2022, the overall performance of large state-owned banks was in line with expectations, the quarterly growth rate of revenue slowed down slightly, the growth rhythm of net profit also slowed down, and the differentiation of operating performance of different banks continued to widen Postal Savings Bank Of China Co.Ltd(601658) continued the characteristics of 2021, with quarterly double-digit growth in revenue and profit. Since the beginning of the year, the interest income has increased steadily, the interest margin has gradually stabilized, the rise and fall of handling fees and other non interest income have existed, and the differentiation has increased. The non-performing rate fell significantly year-on-year, with no obvious change month on month. The asset quality optimization faced the pressure in the second quarter, with a certain buffer space. In the first quarter, the cost control was improved, and the single person output was improved.
The situation of epidemic control and the strength of credit policies have become an important focus in the future. Since the beginning of 2022, Omicron virus has spread in a multi-point sporadic manner, and its transmission effectiveness as high as R0 = 10 poses a major challenge to China’s dynamic prevention and control and dynamic clearing. In the face of the epidemic, we took the people’s right to life and health as the primary consideration, sacrificing the liquidity of the economy and the recovery of important offline consumption situations to a certain extent. Since the “closure” of many places, the economy has been under great pressure. We can refer to the performance of the banking industry in the first quarter of 2020 when the epidemic broke out as the reference frame. At present, the impact is greater and wider than that in 2020. Therefore, we think the energy level of the impact will be greater. Of course, considering that many impacts are expected to lag behind and make up in the future, many policies will give certain incentives according to the impact, so that the economic recovery degree of the whole year basically reaches the goal set at the beginning of the year. Therefore, we judge that the subsequent economic index data will show a trend of restraining first and then increasing.
The second half of 2022 is coming. Under the background of increasing economic pressure, policy flexibility is strong. The more extreme the compression of valuation, the stronger the rebound will be. From the perspective of Pb dimension, the current overall valuation level of banks is at the lowest percentile in history. Referring to the experience of overseas developed markets, the decline of Pb valuation level seems inevitable. Therefore, we need to find the bank target with the most growth and comparative advantage and grasp the investment opportunities brought by regional imbalance and unique competitive advantage. In the dimension of state-owned banks, we first recommend Postal Savings Bank Of China Co.Ltd(601658) , which has high growth and high valuation cost performance. Secondly, we suggest paying attention to Industrial And Commercial Bank Of China Limited(601398) , China Construction Bank Corporation(601939) and Agricultural Bank Of China Limited(601288) , which have strong cost control and excellent asset quality control.
Risk warning: epidemic spread risk, international environmental deterioration risk and credit risk.
