Sino-Singapore Jingwei, June 30th (Wei Wei) "I hope everyone will seize the business opportunities of investment. Just kidding, the 14 yuan Ping An Bank should be cherished, and this price may not be seen much in the future." On March 10 this year, Zhou Qiang, the board secretary of Ping An Bank, joked at the 2021 results conference.
After some shouting, Ping An Bank's share price also rebounded, reaching 16.66 yuan per share at one point.
Although the words are still in my ears, today, the bank's share price has returned to the 14-15 yuan range.
Investors have been disappointed by the stark contrast between bank performance and share prices, while executives are backing their banks with "real money".
China-Singapore Jingwei statistics found that since the beginning of this year, a total of 8 banks, including Chongqing Rural Commercial Bank, Chongqing Bank, Zheshang Bank, Xiamen Bank, Ruifeng Bank, Qilu Bank, Suzhou Bank and Postal Savings Bank, have issued plans to stabilize stock prices. Announcement, including major shareholders, bank chairman and president and other executives plan to increase their holdings, the total amount is as high as 176 million yuan.
In addition to passively increasing their holdings due to triggering the implementation of stable stock prices, many bank executives took the initiative to support their own banks.
With the increase in holdings of the governors, when will bank stock prices usher in the expected rebound?
Bank stocks tumble
The data shows that from the beginning of this year to June 30, among the 24 secondary Wind industries, the energy sector rose by more than 20%, followed by the automobile and auto parts sector, with an increase of about 3%, and the banking sector ranked first. Third, but the overall is in a state of decline, down about 0.1%.
Lin Mu (pseudonym) has been a minority shareholder of a joint-stock bank for seven years. When he bought it in 2015, the A-shares were booming, and the bank's stock price also skyrocketed.
"At that time, this bank was a star stock, and it was in the battle for equity. It rose too well in the early stage." Lin Mu remembered that the cost of his purchase was around 10 yuan.
But since that shareholder meeting, the bank stock has been in a state of floating losses.
"Look at the current stock price, including dividends and ex-rights, my loss is 45%, which is already flat." Lin Mu said to Sino-Singapore Jingwei.
In Lin Mu's impression, since 2015, except for individual banks such as China Merchants Bank and Bank of Ningbo, bank stocks have not been particularly good.
In fact, bank stocks have fallen below net worth in a row in recent years.
In terms of price-to-book ratio (PB), Wind shows that it reached 1.21 times in early July 2015, and fell to 1.02 times on December 31 of that year.
In 2016 and 2017, it has been around 0.9 times -1 times. In February 2018, it touched 1.19 times. After March 2018, the net value of bank stocks began to decline. From the end of 2018 to the end of 2021, it was 0.81 times. , 0.84 times, 0.72 times, 0.63 times, so far only 0.6 times are left.
This means that the bank's net assets of 1 yuan are only worth 6 cents in the stock market.
"The valuation of bank stocks is getting lower and lower. It is not that the stock price continues to fall, but the performance has steadily improved, but the valuation has not been repaired." Ding Zhenyu, senior investment consultant of Jufeng Investment Consulting, pointed out in an interview with Sino-Singapore Jingwei that from the end of 2018 to the end of 2018 At the end of 2021, the banking sector index rose more than 15%.
Ding Zhenyu said that at present, China is in a loose currency and loose credit cycle, and the real estate is in a downward cycle. The above factors are not conducive to the increase in the valuation of bank stocks.
The president shouted "Shoot when it's time to do it"
There is also a view in the market that buying the stocks of large state-owned banks is relatively stable, and the dividends are often around 30%. Many banks have a dividend rate of more than 5% or even more than 7%. Holding bank stocks is more cost-effective than buying bank wealth management.
Lin Mu did not agree.
"If you really buy it, you may find that bank stocks have a very bad market. When it falls, the big banks will also fall, and if it falls a little, your gains will be gone."
Although investors have mixed opinions on bank stocks, it does not affect the confidence of bank executives in their own stocks. Many banks will be asked about their stock prices during their earnings conferences.
Zhou Qiang, secretary of the board of directors of Ping An Bank, once said at the mid-2021 results conference that the market ebbs and flows, and hot spots are constantly changing.
Insurance real estate banks, the current stock price performance is average, but in history, there is also a lot of time for everyone to make a lot of money.
"For the Bank of China stock, sell it when it's time to sell, and place an order when it's time to place an order." On March 29, at the 2021 results conference held by Bank of China, President Liu Jin actively appealed, "Strongly It is recommended that investors look at both the stock price and the dividend; both growth and stability." Liu Jin said.
In 2020, Zhang Qingsong, President of Agricultural Bank of China, also responded to the question of the low stock price, saying, "The current stock price level of Agricultural Bank is undoubtedly a potential stock and a value stock."
Governors are backing their own stocks with their own pockets
Not only did they publicly speak out, but the presidents and executives even took out "real money" and used practical actions to convey confidence to investors.
China-Singapore Jingwei combing found that since the beginning of this year, senior executives of Zheshang Bank, Bank of Shanghai, China Merchants Bank and Bank of Beijing have increased their holdings, with a total investment of no less than 15 million yuan.
On January 4, Zhang Rongsen, president of China Zheshang Bank, fired the "first shot" to increase its holdings.
The bank’s announcement stated that based on the confidence and value recognition of the company’s future development, Zhang Rongsen increased his holdings of the bank’s A shares by 284,100 shares at a price of 3.52 yuan per share, with an increase of 1 million yuan.
On May 5, the Bank of Shanghai announced that a total of six people, including the bank's president, four vice presidents and the secretary of the board of directors, bought 565,000 company A shares from the secondary market that day, with a total increase of over 3.6443 million yuan.
In May, Wang Liang, the new president of China Merchants Bank, spent 766,600 yuan to increase his holdings of 20,000 China Merchants Bank A shares, with an average transaction price of 38.33 yuan per share.
Wind statistics show that since 2018, Wang Liang has repeatedly increased his holdings of China Merchants Bank stocks.
After this increase in holdings, Wang Liang holds 270,000 shares of China Merchants Bank. According to the bank's closing price of 41.01 yuan per share on June 29, Wang Liang's stock market value has exceeded 11 million yuan.
On June 17, Bank of Beijing announced that some directors, supervisors and senior executives of the bank purchased the bank's stocks from the secondary market with their own funds from June 15 to 17, and the transaction price ranged from 4.49 yuan to 4.58 yuan per share. yuan, a total of 2.1619 million shares were purchased, and the total amount of increased holdings exceeded 9.7 million yuan.
Not only presidents and executives, but also middle-level banks buy bank stocks.
In February this year, Industrial Bank issued an announcement stating that some of the bank’s subsidiaries, branches and heads of departments at the head office (including their spouses and children) voluntarily purchased 16.9329 million shares of Industrial Bank from the secondary market with their own funds at the transaction price. The range is 20.36 yuan to 23.08 yuan per share.
The research team of Zheshang Securities Bank pointed out that the collective voluntary purchase by the middle-level cadres of Industrial Bank, on the one hand, shows the confidence of the middle-level cadres in the bank's operation and management, and on the other hand, it also means that the employees are more motivated to do a good job in the operation.
The positive significance of the collective increase of employees' holdings this time is even stronger than that of the management.
In addition to voluntary stock purchases, there are also cases where senior executives passively increase stock holdings due to triggering the triggering conditions for the implementation of stock price stabilization measures.
Sino-Singapore Jingwei combing found that in the first half of 2022, 8 banks issued plans to stabilize stock prices, of which 4 major shareholders contributed capital to increase their holdings, each with an amount exceeding 10 million yuan; at the same time, some directors, supervisors and senior executives increased their holdings of stocks.
In addition to the undisclosed increase in holdings of Chongqing Rural Commercial Bank, the total increase in holdings of directors, supervisors and senior executives of several other banks is not less than 11.9433 million yuan.
Among them, Zheshang Bank has the highest increase in holding amount. The bank’s directors and executives have increased their holdings by no less than 5.3428 million yuan. The lowest is Chongqing Bank. The bank’s executives and directors have increased their holdings by only 763,400 yuan. An average of 63,600 yuan per person.
Everbright Securities analyzed in the research report that most banks listed on A-shares after 2016 have "stock price stabilization clauses", that is, within 3 years after listing, unless due to force majeure factors, when A-share stocks are listed for 20 consecutive trading days. When the closing price of the company is lower than the latest audited net assets per share, the company and relevant parties will jointly study and formulate a stock price stabilization plan to fulfill the obligation of stabilizing the stock price.
Everbright Securities further pointed out that from the perspective of the disclosure of the prospectus, there are three main ways to stabilize the stock price, including the increase of major shareholders, the increase of executives' holdings and repurchase.
Since the company law stipulates that the repurchase of shares needs to be cancelled and the capital is reduced, listed banks stabilize the stock price through repurchase or lead to the permanent loss of ordinary shares. Most of the funds held are from their own funds, of which the lower limit of the amount of executives’ holdings is usually set at no less than 15%-25% of the cumulative amount of after-tax remuneration received in the previous year.
Are bank stocks worth investing in?
Can you make money in bank stocks by following the bank president's "buy, buy, buy"?
The Everbright Securities Research Report pointed out that
the signal that executives actively increase their holdings is more meaningful, and the stock price has a high probability of running out of relative returns.
"Theoretically, due to the information asymmetry between management and investors, the increase in holdings of executives has a certain signal effect, which can send a signal to the market that the company's stock price is undervalued and its business fundamentals are good, thus to a certain extent Boost stock prices," the research report said.
Regarding the passive increase of executives' holdings, Everbright Securities said that since the fundamentals have not changed substantially, the phased support brought by the increase is difficult to continue.
"After 2016, most of the A-share listed banks are urban and rural commercial banks. In recent years, under the general sentiment that A-share listed banks have broken nets, the phenomenon of small and medium-sized banks triggering stock price stabilization clauses has also increased accordingly." Everbright Securities mentioned that
from the implementation of the plan Judging from the results, some bank stock prices may be boosted to a certain extent in the short term, but the lifting effect is difficult to sustain.
Wang Jianhui, a senior industry person, told Sino-Singapore Jingwei that the increase in stock holdings by executives has a certain psychological support for the stock price, and it will send a positive signal in terms of short-term market expectations, but after all, because of the limited financial ability of executives, their purchases generally account for a relatively large proportion. Small, there is still a big gap in supporting the stock price of banks, especially the stock prices of medium and large banks.
Can the positive signals released by the accumulation have an effect?
Wang Jianhui believes that this depends on a number of factors. The first is the number of purchases. Some may buy hundreds of shares. This is meaningless. In terms of the number of purchases, investors must feel that there is indeed a strong sense of executives. Willingness to buy the stock of their own institution at this price.
In terms of duration, Wang Jianhui pointed out that if the executives buy it once this year and never buy it again, the support effect may be limited.
"For example, within the scope of financial resources, the number of purchases is relatively large each time, every half a year or even a quarter, and the continuous transmission of signals to the outside world will have a more significant supporting effect." Wang Jianhui said.
When it comes to whether the valuation of bank stocks can recover in the future, Meng Lei, a China strategist at UBS Securities, once said on the A-share second-quarter outlook and investment strategy analysis conference call that the performance of banks is very stable, and the market of bank stocks is more The attractiveness of the defensive nature to investors lies in its dividends and stability.
However, after the current difficult stage, the attractiveness of defensive sectors will decline significantly, and from the perspective of the six-month cycle, it will be underweight bank stocks.
Wang Jianhui analyzed that the stock price as an asset price must go up and down. With the gradual stabilization of the economy and the flexible adjustment of the epidemic prevention and control policies, the economic expectations will also improve, and the bank's operating expectations will be improved accordingly. For optimism, its valuation level will gradually stabilize and rebound.
(The opinions in this article are for reference only and do not constitute investment advice. Investment is risky, and you need to be cautious when entering the market.)