Reporter Su Xianggao
Since the beginning of this year, institutions' research preferences for different types of listed banks have diverged: on the one hand, they frequently conduct research on a few city commercial banks, on the other hand, they conduct "zero research" on large state-owned banks and joint-stock banks.
This situation has become more pronounced since May.
According to the data of Chioce, a reporter from Securities Daily reported that as of May 16 this year, a total of 16 A-share listed banks have been investigated by institutions, with a total frequency of 2,263 investigations. These banks are all urban commercial banks and rural commercial banks.
Among them, 8 city commercial banks were surveyed for a total of 2,023 times, and they became the objects of investigation by institutions. Specifically, Bank of Changshu, Bank of Hangzhou and Bank of Ningbo were the most favored by institutions and ranked the top three in the frequency of surveys.
Why do institutions get together to investigate city commercial banks?
Experts interviewed by reporters said that the total market value of large state-owned banks is relatively large. Under the circumstance of great downward pressure on the economy, their performance growth is under pressure, and market attention is low.
In comparison, some small and medium-sized banks such as city commercial banks and joint-stock banks have a faster pace in service innovation and digital transformation, with higher growth potential and higher market attention.
City commercial banks are favored by big banks in the country with "zero research"
Since the beginning of this year, the institution has conducted research on 16 listed banks.
Among them, 8 city commercial banks were surveyed for a total of 2,023 times, accounting for 89%.
The eight city commercial banks are Changshu Bank, Hangzhou Bank, Ningbo Bank, Zhangjiagang Bank, Suzhou Bank, Jiangyin Bank, Sunong Bank, and Wuxi Bank.
Judging from the stock price trend during the year, the stock prices of the above-mentioned 8 banks rose, except for Bank of Ningbo, which fell.
Among them, the stock price of Changshu Bank, which has the highest frequency of institutional research, rose by 16.34% during the year, and the Bank of Hangzhou, which was the second most frequently investigated by institutions, rose by 9.98% during the year.
It is noteworthy that, in stark contrast to the "high enthusiasm" of the institutional research on city commercial banks, no institution took the initiative to investigate large state-owned banks during the year.
In the eyes of industry insiders, this is related to factors such as the growth prospects and business development models of listed banks with different backgrounds.
Dong Ximiao, chief researcher of China Merchants Union Finance, told reporters that there are currently 4,602 legal persons in banking financial institutions, and the differences between banks are very obvious, mainly reflected in their business models and growth space.
For example, among joint-stock banks, China Merchants Bank and Ping An Bank have higher valuations; among city commercial banks, Ningbo Bank and Hangzhou Bank have higher valuations.
This reflects the market's recognition of its development model, growth potential and room for growth.
In addition, excellent small and medium-sized banks tend to move faster in terms of service innovation and digital transformation.
"The large state-owned banks are indeed difficult to increase their stock prices due to their relatively large stocks, and they also have to undertake social responsibilities, such as serving the real economy and making profits to the real economy, which will affect the valuation of large state-owned banks." Dong Ximiao said.
Chen Hua, director of the Institute of Contemporary Finance of Shandong University of Finance and Economics, told reporters that many factors will have an impact on the stock price of banks. In comparison, large state-owned banks have a large plate, and their growth may not be as good as that of some city commercial banks. Future growth is expected, so the market has given some city commercial banks a certain high valuation.
From the perspective of fundamentals, at present, the performance growth rate of the city commercial banks that have gathered together for research is generally higher than that of the big state-owned banks.
For example, in the first quarter of this year, Changshu Bank’s revenue increased by 19.34% year-on-year, and its net profit attributable to shareholders of listed companies increased by 23.38% year-on-year; Hangzhou Bank’s revenue increased by 15.73%, and its net profit attributable to shareholders of listed companies increased by 31.39%; Ningbo Bank Revenue increased by 15.4%, and net profit attributable to shareholders of the parent company increased by 20.80%.
Institutional research focuses on six types of issues
It is worth noting that in the process of investigating city commercial banks, the research questions are quite similar.
The reporter sorted out six types of questions: First, how to improve core competitiveness?
Second, what is the business strategy for this year?
The third is how to control risks?
Fourth, how to improve asset quality?
Fifth, how will the epidemic affect the business?
Sixth, how to serve small and micro enterprises?
Among them, the impact of the epidemic on bank asset quality and credit issuance has been widely mentioned by institutions.
For example, on April 29, the institution inquired about the impact of the epidemic on credit issuance when investigating Changshu Bank?
In this regard, Changshu Bank stated that due to the impact of the epidemic, the flow of personnel was restricted, and customer demand and business development of relationship managers were affected. The extent of the impact of the epidemic on the bank's business is related to the duration of the epidemic.
Similarly, Hangzhou Bank said in response to institutional questions on May 13 that the epidemic did have a certain impact on credit issuance, especially consumer credit. Since the first quarter was the low point of demand for consumer credit withdrawals, the growth was relatively slow.
Multiple brokerage institutions recently stated that the valuation deviation of the banking sector relative to the CSI 300 constituent stocks is at the historical 8% since 2013, and the sector is deeply undervalued.
However, there are still many uncertainties in bank stocks that need investors' attention: First, the economic downturn exceeds expectations, leading to an unexpected increase in the pressure on the industry's asset quality; second, the liquidity risk of real estate companies continues to spread, disrupting the asset quality of banks 3. The duration and coverage of the epidemic may exceed expectations.
Dong Ximiao said that the overall valuation of bank stocks is currently low, with an average price-to-book ratio of around 0.7. This situation also exists in Europe and the United States, but China is more prominent, mainly because the market is cautious about the long-term development trend and profit growth trend of bank stocks. Attitude.
Banking is a strong cyclical and pro-cyclical industry, and its development trend is closely related to the macroeconomy. Under the downward pressure on the domestic macroeconomy, the market is divided on the growth prospects of banks.
In addition, in the economic downturn, banks tend to assume more social responsibilities and make profits to the real economy, which affects the sustainability of bank profit growth.
"I am cautiously optimistic about bank stocks. In the long run, with the recovery of China's economy, the foundation for stable economic development is still there. In general, banks have investment value, and the current valuation is relatively low, with high safety. Margin." Dong Ximiao said.
Chen Hua said that in recent years, the banking industry has been faced with tightening regulations, narrowing of deposit and loan spreads, the impact of Internet finance, the risk of credit default in the real estate industry, and the impact of the epidemic. The asset quality and operating efficiency of banks have been affected to a certain extent. .
However, in the long run, the banking industry still has good prospects for development.
(Securities Daily)