20220621-招银国际-China_Financials_Weekly_Manageable_impact_of_Henan_village_banks__incident_24页_2mb
报告摘要
China Financials Weekly Summary
Core Content
This report provides an analysis of the impact of the Henan village banks' incident on the financial sector in China, particularly focusing on the banking and insurance industries. It also includes valuation insights for key players in both sectors, along with trading bands for price-to-book value (PBV) and price-to-earnings ratio (PER).
Key Findings
Henan Village Banks Incident
- Impact on Financial System: The default on deposits by Henan village banks had a manageable impact and did not pose a material threat to the banking system's stability or sector fundamentals.
- Deposit Issues: Approximately RMB40bn in deposits could not be withdrawn, which represents a small fraction (0.2%) of the total R&C banks' deposit balance (RMB20tn).
- Corporate Governance Concerns: The incident highlighted issues in corporate governance rather than asset quality or cash flow, which is a key concern for regional banks.
- Regulatory Response: The Financial Stability Law (draft) introduced in April emphasizes reducing reliance on public funds for risk disposal, suggesting a more market-oriented approach.
- Repayment Plans: The four affected banks are now registering customer information to develop repayment plans, though the short-term compensation is still uncertain.
- Investor Recommendation: Investors are advised to avoid small regional banks and focus on large state-owned enterprises (SOEs) and city banks in developed economic regions.
Insurance Industry Insights
- P&C Loss Ratio Improvement: The industry-wide P&C loss ratio improved by 2.4ppt YoY in 4M22, compared to 2.1ppt in 1Q22.
- Auto Insurance Growth: Average premium income per policy in auto insurance slightly increased by 2% YoY, driven by higher pricing of NEV insurance and inflation.
- Bond Investment Trends: Insurers increased their bond investment weight to 40% in April, ahead of the anticipated 5-yr LPR cut in May.
- Top Picks: PICC P&C (2328 HK) and Ping An (2318 HK) are highlighted as top picks due to their proactive reforms and performance.
Main Points
- Banking Sector: The incident had limited impact on the overall banking system. The report recommends maintaining an OUTPERFORM rating for the banking sector.
- Insurance Sector: The insurance industry shows resilience with improved loss ratios and positive trends in auto insurance.
- Valuation: The report includes detailed valuation metrics for both banking and insurance sectors, highlighting key financial ratios and target prices.
- Investor Guidance: Investors are advised to focus on larger, more stable banks and insurers with strong fundamentals.
Key Information
- Top Picks for Banking: PSBC (1658 HK) with a target price of HK$8.40 and upside of 40% is the top recommendation. CCB (939 HK) is also recommended with a target price of HK$8.10 and 47% upside.
- Top Picks for Insurance: PICC P&C (2328 HK) and Ping An (2318 HK) are recommended, with PICC P&C having a target price of HK$11.64 and 41% upside.
- Valuation Metrics: The report provides forward-looking P/E and P/B ratios, as well as dividend yields and other financial indicators for each listed company.
Valuation Summary
Banking Industry
| Ticker | Name | Mkt Cap (LC) | Price (LC) | Rating | TP (LC) | Upside | P/E (x) | P/B (x) | Dividend Yields |
|---|---|---|---|---|---|---|---|---|---|
| 1658 HK | PSBC-H | 567.7 | 5.98 | Buy | 8.40 | 40% | 6.9 | 6.3 | 4.7% |
| 939 HK | CCB-H | 1,412.0 | 5.50 | Buy | 8.10 | 47% | 4.3 | 3.9 | 7.1% |
| 600000.CH | SPDB-A | 233.4 | 7.91 | Hold | 9.00 | 14% | 4.5 | 4.1 | 5.5% |
| 601229.CH | BOSH-A | 92.8 | 6.52 | Buy | 8.68 | 33% | 3.9 | 3.5 | 7.2% |
| 3618 HK | CQRCB-H | 48.3 | 2.82 | Hold | 3.05 | 8% | 3.2 | 2.9 | 9.5% |
| 601577.CH | BOCS-A | 31.6 | 7.84 | Hold | 8.30 | 6% | 4.6 | 4.0 | 5.5% |
| 601658.SH | PSBC-A | 481.5 | 5.14 | Buy | 7.07 | 38% | 5.9 | 5.4 | 5.5% |
| 601939.SH | CCB-A | 1,187.0 | 5.99 | Buy | 7.50 | 25% | 4.7 | 4.2 | 6.5% |
| 601077.SH | CQRCB-A | 40.8 | 3.92 | Hold | 3.60 | -8% | 4.4 | 4.1 | 6.9% |
Insurance Industry
| Ticker | Company | Price | Rating | PO | Upside | P/BV (x) | P/E (x) | Dividend Yields | P/EV (Group) | New Business Multiplier | ROE | ROEV |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2318 HK | Ping An | 51.15 | Buy | 81.40 | 59% | 0.9 x | 6.7 x | 6.0% | 0.5 x | (21.1) x | 13.6% | 8.9% |
| 2628 HK | China Life | 12.68 | Buy | 18.18 | 43% | 0.6 x | 5.1 x | 6.9% | 0.2 x | (21.4) x | 11.5% | 8.4% |
| 2601 HK | CPIC | 18.06 | Buy | 30.49 | 69% | 0.6 x | 4.9 x | 9.8% | 0.3 x | (28.7) x | 12.1% | 7.4% |
| 1336 HK | NCL | 21.75 | Buy | 32.35 | 49% | 0.4 x | 3.4 x | 9.0% | 0.2 x | (33.7) x | 13.7% | 5.8% |
| 966 HK | Taiping | 9.37 | Buy | 11.48 | 23% | 0.3 x | 3.9 x | 7.8% | 0.2 x | (23.4) x | 8.4% | 6.5% |
| 1339 HK | PICC Group | 2.58 | Buy | 3.58 | 39% | 0.4 x | 3.7 x | 9.2% | 0.3 x | (69.0) x | 11.2% | 7.3% |
| 6060 HK | Zhong An | 24.30 | Buy | 33.20 | 37% | 1.5 x | 30.6 x | 0.0% | 0.4 x | (22.8) x | 12.1% | 7.4% |
| 601318 CH | Ping An | 45.36 | Buy | 67.56 | 49% | 0.9 x | 7.1 x | 5.6% | 0.5 x | (19.6) x | 13.6% | 8.9% |
| 601628 CH | China Life | 28.88 | Sell | 18.10 | -37% | 1.5 x | 14.1 x | 2.5% | 0.6 x | (10.0) x | 11.5% | 8.4% |
| 601601 CH | CPIC | 23.03 | Buy | 30.37 | 32% | 0.9 x | 7.6 x | 6.4% | 0.4 x | (22.8) x | 12.1% | 7.4% |
| 601336 CH | NCL | 31.01 | Sell | 26.85 | -13% | 0.8 x | 5.8 x | 5.2% | 0.4 x | (27.4) x | 13.7% | 5.8% |
| 601319 CH | PICC Group | 5.05 | Sell | 3.72 | -26% | 0.9 x | 8.8 x | 3.9% | 0.7 x | (27.1) x | 11.2% | 7.3% |
Summary of Key Metrics
- P&C Premium Growth: PICC P&C (2328 HK) and Ping An (2318 HK) show a 10% growth in P&C premiums YoY.
- Combined Ratio: Most insurers have a combined ratio around 98-103%, indicating stable underwriting performance.
- Loss Ratio: The P&C loss ratio improved, with PICC P&C at 74% and Ping An at 61.5%.
- Expense Ratio: Insurers maintain consistent expense ratios, ranging from 25% to 45%.
Conclusion
The Henan village banks' incident is a governance issue rather than a systemic risk, and the overall financial system remains stable. The insurance sector shows positive trends, with improved loss ratios and growth in auto insurance. The report recommends focusing on larger, more stable institutions in both sectors for investment.
展开完整摘要
试读结束，高清完整版pdf/doc/ppt,请点下载
