Industry core view: Policy correction is expected to improve and continue to be optimistic about valuation repair. According to the annual report and the first quarter report of listed banks, the fundamentals of most listed banks remain stable under the downward pressure of the economy. Looking forward to the second quarter of 2022, with the force of the steady growth policy and the correction of the real estate policy, the industry will still be in the channel of negative expectation improvement. At present, the static valuation level of Pb is only 0.61x, which is still at an absolute low in history, with a sufficient margin of safety. We are still optimistic about the valuation repair opportunities of the banking sector. Individual stocks recommend high-quality regional banks represented by Bank Of Chengdu Co.Ltd(601838) , Bank Of Ningbo Co.Ltd(002142) , Bank Of Jiangsu Co.Ltd(600919) with obvious marginal improvement in fundamentals and better growth than peers.
Industry hot spot tracking: the first quarter profit growth slowed down, focusing on the performance elasticity of small and medium-sized industries. The quarterly report of 41 listed banks for the first quarter of 2012 was disclosed. In the first quarter, the net profit of listed banks increased by 8.7% year-on-year, 3.9pct slower than 12.6% in 2021. In terms of individual stocks, among the large and medium-sized banks, Ping An (YoY + 26.8%), postal savings (YoY + 17.8%) and Societe Generale (YoY + 15.6%) grew rapidly. Among the urban commercial banks, Hangzhou (YoY + 31.4%), Chengdu (YoY + 28.8%) and Jiangsu (YoY + 26.0%). From the revenue side, the revenue growth rate in the first quarter of 22 years narrowed by 3.4 percentage points to 4.3% compared with that in 21 years, mainly due to the slowdown of medium revenue growth. In the first quarter, listed banks achieved a year-on-year increase of 3.5% (vs + 6.4%, 21a), and the growth rate decreased slightly. We judge that under the influence of the downturn of the capital market in the first quarter, the marginal growth of intermediate income such as consignment funds slowed down; Other non interest income was also affected. In the first quarter, listed banks achieved a year-on-year decrease of 0.3% (vs + 45.9%, 21a), and market fluctuations dragged down investment income. In the first quarter, investment income decreased by 12.6% (vs + 39.7%, 21a). In terms of net interest income, listed banks achieved a year-on-year increase of 5.2% (vs + 5.0%, 21a) in net interest income in the first quarter of 22 years. The growth rate increased slightly for two consecutive quarters and maintained steady growth.
Review of market trend: in April, the banking sector fell 3.5%, outperforming the CSI 300 index by 1.37 percentage points, ranking sixth in 30 sectors according to the first-class industry of CITIC. In terms of individual stocks, Chengdu, Nanjing and Hangzhou led the gains, rising 11.8%, 8.7% and 8.4% respectively in a single month. Lanzhou, Chongqing and China Merchants Bank led the declines, falling 18.0%, 15.2% and 14.7% respectively in a single month.
Macro and liquidity tracking: 1) the PMI of manufacturing industry in April was 47.4%, down 2.1 percentage points from the previous month, and the prosperity level of manufacturing industry decreased slightly. Among them, the PMI of large / medium / small enterprises were 48.1% / 47.5% / 45.6% respectively, with a month on month ratio of – 3.2% / – 1.0% / – 1.0%, reflecting that the operating pressure of enterprises still exists. In March, the PPI index continued to fall, and the CPI index rebounded slightly. The PPI fell by 0.5 percentage points to 8.30% compared with the previous month, and the CPI increased by 0.6 percentage points to 1.5% compared with the previous month. The month on month performance was stronger than the seasonal law. 2) In April, the one-year MLF interest rate remained unchanged at 2.85%, and the lpr1 one-year / five-year period was unchanged from the previous month, with 3.70% / 4.60% respectively. In April, the market interest rate declined as a whole, and the yield of treasury bonds differentiated. The yield of one-year / 10-year Treasury bonds changed by -9.79bp / + 5.08bp to 2.03% / 2.83% respectively compared with the previous month. 3) In March, credit growth relied heavily on the enterprise sector, and the demand for residential loans remained weak. In March, RMB loans increased by 3.13 trillion, an increase of 400 billion yuan year-on-year, an increase of 280 billion yuan compared with the same period in 20 years, and the growth rate of loan stock was flat at 11.4% year-on-year.
Risk tips: 1) the economic downturn leads to higher than expected pressure on the quality of industrial assets. 2) The decline in interest rates led to a narrower than expected industry interest margin. 3) The increase of cash flow pressure of real estate enterprises leads to the rise of credit risk.
