Market performance:
In the current period (May 16, 2022-may 20, 2022), the non bank (Shenwan) index was + 1.21%, ranking 26 / 31 in the industry, the brokerage II index was + 1.51%, and the insurance II index was + 0.54%; Shanghai Composite Index + 2.02%, Shenzhen Component Index + 2.64%, gem index + 2.51%.
The top five stocks in terms of rise and fall: St Panda (+ 23.21%), Gi Technologies Group Co.Ltd(300309) (+ 19.83%), St Xiyuan (+ 13.66%), Anhui Xinli Finance Co.Ltd(600318) (+ 10.59%), Caida Securities Co.Ltd(600906) (+ 9.73%); The top five stocks rose or fell: ST Lvting (- 68.82%), ST Xishui (- 50.87%), Sealand Securities Co.Ltd(000750) (- 2.31%), China Life Insurance Company Limited(601628) (- 1.42%), Cnpc Capital Company Limited(000617) (- 1.26%).
Core view
Brokerage: this week, the brokerage sector rose 1.51%, and the market rose sharply on Friday. The brokerage sector strengthened, Caida Securities Co.Ltd(600906) led the rise, Gf Securities Co.Ltd(000776) , China stock market news, First Capital Securities Co.Ltd(002797) , China Securities Co.Ltd(601066) led the rise. We believe that the rebound of the securities sector in this round is mainly supported by the following factors:
1. The combination of loose monetary policy and multiple capital markets is good. On Friday, the national interbank lending center announced that the new phase of LPR over 5 years was 4.45%, down 15 basis points from the previous period. The decline in LPR exceeded expectations, indicating the determination of monetary policy to strengthen countercyclical regulation. On the one hand, the securities sector is expected to benefit from the easing of market liquidity and obtain excess returns. On the other hand, since the beginning of this year, due to the impact of the epidemic, there has been great downward pressure on the economy. It is expected that supporting monetary policies will be introduced in the future to boost the stabilization and recovery of the economy. At the same time, with the superposition of favorable policies such as the landing of the market making system and the landing of the probability rate of the registration system within the year, the securities sector has a large rebound space under the boost of the policy.
2. The valuation has bottomed out and has a strong margin of safety. At present, the valuation of Pb in the securities sector is only 1.27 times, which is at the 10th percentile in the past five years. The valuation has fully reflected the pessimistic expectations of the market. At present, the configuration cost performance of the securities sector is high.
In the long run, we are firmly optimistic about several main development lines of the securities sector:
1. Undervalued securities firms. For example, Citic Securities Company Limited(600030) as the only one of the leading securities companies with positive growth in the net profit attributable to the parent company in the first quarter, it has strong anti cycle and anti risk ability.
At the same time, China Securities Co.Ltd(601066) and China International Capital Corporation Limited(601995) also due to the successful transformation of investment banking business, under the background of continuous expansion of capital market, the company’s investment banking business has long-term and stable business increment and high growth ability. In addition, among the securities companies that meet the market making system access conditions, the head securities companies have strong capital strength, perfect risk control system and technical support, and have advantages in market making pilot application and business development. In general, the head bond business has significant advantages in anti cyclical performance and growth ability. At the same time, the capital of going north is also more optimistic. The head securities companies such as Citic Securities Company Limited(600030) , Huatai Securities Co.Ltd(601688) , Guotai Junan Securities Co.Ltd(601211) and so on ranked among the top of the net capital inflow of going north this week.
2. Wealth management line. Since the beginning of the year, due to the impact of the continuous downturn of the market, the issuance of asset management products of funds and securities companies has been cold, and the fund sales data has also shrunk significantly. According to the sales and holding scale of public funds of fund sales institutions in the first quarter of 2022 according to the statistics of China Foundation Association, the holding scale of stock + mixed public funds of the top 100 institutions in Q1 in 2022 was 5908.7 billion yuan, a month on month ratio of – 8.55%, and the holding scale of non money market public funds was 7884.1 billion yuan, a month on month ratio of – 5.31%. However, it is still higher than the same period in 2021, with a year-on-year increase of 8.83% and 21.02% respectively. Although the short-term correction of wealth management is affected by the equity market, the long-term expansion trend remains unchanged. Recently, wealth management main line securities companies have been favored by funds and institutional investors going north. China stock market news has been flowing in sharply for two consecutive weeks. At the same time, Gf Securities Co.Ltd(000776) , Orient Securities Company Limited(600958) this week ranked among the top five net inflows in the securities industry. It is suggested to focus on wealth management dominant securities companies.
On Friday, the China Banking and Insurance Regulatory Commission announced that in the first quarter of 2022, the insurance industry achieved a total original premium income of 1781.1 billion yuan, a year-on-year increase of – 1.02%, including 324.6 billion yuan for property insurance, a year-on-year increase of + 9.32%, and 1456.5 billion yuan for personal insurance, a year-on-year increase of – 3.07%. In March, the original premium income in a single month was + 1.77% year-on-year, including property insurance + 8.46% year-on-year and life insurance – 0.23% year-on-year.
The original premium income of life insurance was 1108.1 billion yuan, a year-on-year increase of – 4.77%, a year-on-year increase of – 12.53%; Personal accident insurance was RMB 31.3 billion, a year-on-year increase of – 3.49%, a year-on-year increase of – 13.44%; Health insurance was 317.2 billion yuan, a year-on-year increase of + 3.46%, a year-on-year increase of – 12.64%. At present, the transformation of life insurance is still in progress. The decline in the scale of agents leads to the slowdown in the growth of new orders, while the outbreak of the national epidemic and the sharp correction of the equity market lead to the pressure on the liability side, which has limited contribution to the growth of overall premium income. It is still necessary to explore new growth drivers in the reform.
The original premium income of property insurance was 324.6 billion yuan, a year-on-year increase of + 9.32%, a year-on-year increase of + 9.07%. Among them, the original premium income of automobile insurance in the first quarter was 19.5 billion yuan, a year-on-year increase of + 8.09%. In the three months of the first quarter, it was 82.8 billion yuan in January, 43.4 billion yuan in February and 70.3 billion yuan in March, with weak month on month growth. The national epidemic outbreak since March this year has a great impact on the automobile industry chain, and the production and sales of new cars are blocked. The original premium income of automobile insurance in March has been reflected. It is expected that the premium income of automobile insurance from April to May will still be affected by the epidemic. The national epidemic situation is expected to improve in June, and the growth rate of auto insurance premiums is expected to pick up. Similarly, engineering insurance and family property insurance are also greatly affected by the epidemic. Throughout the year, after the full resumption of work and production, the original premium income of property insurance is expected to usher in a wave of growth, which is the main growth force of current premium income.
By the end of March, the balance of capital utilization was 23.54 trillion yuan, including 2.84 trillion yuan of bank deposits, an increase of 8.37% over the end of the previous year, 9.24 trillion yuan of bond investment, an increase of 1.84% over the end of the previous year, 2.86 trillion yuan of stock and fund investment, an increase of -3.22% over the end of the previous year, and 8.61 trillion yuan of other investment, an increase of 0.20% over the end of the previous year. Stock investment increased significantly. Affected by the shock and decline of the secondary market, the investment income decreased significantly in the first quarter. However, with the monetary policy exceeding expectations, the release of market liquidity is expected to promote the improvement of equity investment preference. At the same time, the relaxation of the scope of financial products that insurance funds can invest in will provide more diversified ways for insurance companies to use their funds and promote the development of new products.
The insurance sector rose 0.54% this week, and the weekly increases and decreases of The People’S Insurance Company (Group) Of China Limited(601319) , Ping An Insurance (Group) Company Of China Ltd(601318) , China Pacific Insurance (Group) Co.Ltd(601601) , New China Life Insurance Company Ltd(601336) and China Life Insurance Company Limited(601628) five listed insurance companies were 0.87%, 0.80%, – 0.19%, – 0.21% and – 1.42% respectively. At present, the valuation of Pb in the insurance sector is 1.03 times, lower than the 10th quartile since 2016. The valuation is at the bottom of history and the safety margin is high. However, at present, as the transformation of life insurance is still in progress, the automobile insurance, which accounts for a large proportion of property insurance, is greatly impacted by the epidemic, and the chain growth is strong. The bottoming stage is not over yet, and the inflection point needs to wait.
Risk tips: major changes in industry rules, increased external market risks, market fluctuations and repeated epidemics
