Focus:
1) after the disclosure of the first quarterly report of listed banks, 38 listed banks Q1 achieved a year-on-year growth rate of + 5.6% / + 3.4% / + 8.6% in revenue, PPOP and net profit attributable to parent company.
2) on April 29, the Politburo meeting analyzed and studied the current economic situation and economic work, which helped boost the overall market confidence.
Industry and company dynamics
1) on April 29, the central bank and the China Banking and Insurance Regulatory Commission issued the notice on matters related to the issuance of non capital bonds with total loss absorption capacity by global systemically important banks. 2) On April 28, the central bank announced the establishment of scientific and technological innovation refinancing to guide financial institutions to increase their support for scientific and technological innovation; On April 29, the central bank and the national development and Reform Commission decided to carry out the pilot work of special refinancing for inclusive elderly care. 3) This week, Postal Savings Bank Of China Co.Ltd(601658) Mr. Zhang Jinliang resigned as chairman of the board due to job transfer China Construction Bank Corporation(601939) the board of directors deliberated and approved the proposal to appoint Mr. Zhang Jinliang as president and executive director Bank Of China Limited(601988) issued 20 billion yuan of write down non fixed term capital bonds.
Data tracking
This week, the A-share bank index fell by 3.16%, underperforming the CSI 300 index by 3.23 percentage points, and the rise and fall of the sector ranked 22 / 30, among which Bank Of Chengdu Co.Ltd(601838) (+ 3.01%), China Zheshang Bank Co.Ltd(601916) (+ 2.16%) and Bank Of Hangzhou Co.Ltd(600926) (+ 0.07%) were the top gainers.
Open market operation: this week, the central bank conducted a total of 50 billion yuan of reverse repurchase in the open market, and a total of 50 billion yuan of reverse repurchase expired. Another 5 billion yuan of central bank bill swap (CBS) was issued, and 5 billion yuan of CBS expired. Therefore, this week, the central bank’s investment scale in the open market fully hedged the maturity. 220 billion yuan of reverse repo will expire next week.
Shibor: this week, the trend of Bank Of Shanghai Co.Ltd(601229) inter-bank lending rate rose as a whole. The overnight Shibor interest rate rose 58bp to 1.84%, and the seven-day Shibor interest rate rose 31bp to 2.01%.
Investment suggestions:
The PMI in April disclosed this week continued to bottom out, and the increased pressure on economic growth is the core contradiction at this stage. The supervision also continued to focus on stabilizing growth and expectations, including the clear objectives of the Politburo meeting, boosting market confidence again, and the establishment of two special re loans for scientific and technological innovation and inclusive pension. The broad currency and credit are more positive and promising, and the overweight expectation of subsequent policies is also further rising. From the perspective of the industry, the overall performance of the first quarterly report is stable, but the structure also shows differentiation at different levels. In the follow-up, we also need to pay attention to the recovery rhythm of the economy and the epidemic. At present, the dividend rate of the sector is at an all-time high and the income cost performance is high. We maintain the “recommended” rating of the industry, and continue to recommend at the individual stock level: China Merchants, Ningbo, Chengdu, Hangzhou, Ping An, Xingye, Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) etc.
Risk tips:
1) the downward pressure on the economy continues to increase, and the credit cost has increased significantly;
2) major operational risks of individual banks, etc.
