Core view
New regulations on DVP reform were introduced to improve risk prevention and control and capital use efficiency. 1) In this reform, T-day securities are no longer unconditionally transferred, but linked with capital settlement, and the settlement of securities and funds are conditional on each other. The reform establishes the relationship between securities and capital settlement by setting the “lock for sale settlement” logo, and forms a default disposal arrangement covering all businesses. 2) The DVP reform simultaneously reduced the minimum payment proportion of settlement provisions of settlement participants. In general, the proportion of reserves will be reduced from the current average of 18% to about 15%. This reform is conducive to enhancing the security of the settlement system and further attracting foreign funds to enter the Chinese market. The reform simultaneously reduces the minimum payment proportion of settlement reserves of settlement participants, which is conducive to reducing the occupation of funds in the whole market and improving the efficiency of fund use.
With the introduction of new regulations on Monetary Fund Supervision, the market will welcome standardized development. The Interim Provisions on the supervision of important money market funds (Draft for comments) issued by the CSRC this week defines additional regulatory requirements, risk prevention and control and supervision and management mechanisms for important money market funds with a scale of more than 200 billion yuan or more than 50 million investors. The provisions mainly include four aspects: 1) clarify the definition of important money market funds, 2) clarify the evaluation scope, standards and procedures of important money market funds, 3) clarify the additional regulatory requirements of important money market funds, 4) clarify the risk prevention and control mechanism of important money market funds, strengthen “take precautions” and improve the stability of operation. The provisions will further improve the regulatory framework of money market funds, facilitate the sustained and steady development of money market funds and better serve the cash management needs of the public. It will help to further improve the professional management level and risk prevention ability of fund companies, promote the steady operation and high-quality development of fund companies, and better protect the interests of investors.
At the end of the year, the performance of life insurance was differentiated, and the deterministic trend of auto insurance growth was consolidated. 1) The cumulative growth rates of life insurance of Guoshou, Ping An and Xinhua in 2021 were 1.2%, – 4.0% and 2.5% respectively, of which the monthly growth rates in December were – 0.4, – 4.5% and 20.4% respectively. The closing performance was differentiated. NBV is expected to maintain a large negative growth throughout the year, but the market space gradually activated by residents’ long-term security demand is worth looking forward to; 2) The cumulative growth rates of PICC and Ping An in 2021 were 3.8% and – 5.5% respectively, of which the monthly growth rates in December were 30.4% and 14.2% respectively. The monthly growth rate has continued to expand since the fourth quarter. The monthly premium growth rate of PICC auto insurance has changed from – 5.9% in September to 10.3% in December. The performance margin in the fourth quarter has improved. We believe that the deterministic trend of auto insurance growth has been consolidated, It is expected to usher in the synchronous improvement of scale and quality.
Investment proposal and investment object
In terms of securities companies, double click on market liquidity and policy, continue to be optimistic about the cross year spring market of the sector, select high-quality targets with fundamentals, and maintain the optimistic rating of the industry. Derivatives mainline recommends Citic Securities Company Limited(600030) (600030, overweight), and it is recommended to pay attention to China International Capital Corporation Limited(601995) (03908, not rated); The main line of public offering recommends Gf Securities Co.Ltd(000776) (000776, buy), China Industrial Securities Co.Ltd(601377) (601377, overweight), and it is recommended to pay attention to China Greatwall Securities Co.Ltd(002939) (002939, not rated).
In terms of diversified finance, Hong Kong stocks recommend Far East Hongxin (03360, buy), a leader in financial leasing, and Hong Kong Stock Exchange (00388, overweight), a leader in global exchanges; U.S. stocks recommend BlackRock (BLK. N, overweight), a global asset management leader, and Noah wealth (Noah. N, buy), a third-party high net worth asset management leader. At the same time, it is recommended to pay attention to futu Holdings (futu. O, buy) and tiger securities (TIGR. O, buy), a high-growth Hong Kong and U.S. stock broker with increasingly prominent bottom layout opportunities.
In terms of insurance, the scale of the team has gradually bottomed out, the production capacity of the remaining team has been improved, and it is expected to start a good start gradually; The inflection point of property insurance has arrived, and we look forward to the synchronous improvement of premium and cor; The outlook of the equity market is optimistic, and the liberalization of the investment ceiling adds upward flexibility. We are optimistic about large insurance companies that actively promote reform and enhance production capacity with science and technology empowerment and cross sales, and maintain the optimistic rating of the industry. Follow up suggestions focus on Ping An Insurance (Group) Company Of China Ltd(601318) (601318, buy), China Pacific Insurance (Group) Co.Ltd(601601) (601601, not rated), AIA (01299, not rated).
Risk tips
The suppression of systemic risk on the performance and valuation of securities business; Stricter supervision than expected; The long-term interest rate is lower than expected; Related policy risks in diversified financial field.
