After going through last year’s downturn, the stock prices of listed banks have shown an obvious overall recovery after entering 2022. As of January 17, the banking sector has risen by 1.77% for the year, in sharp contrast to the 3.65% decline last year.
The recovery of the valuation of the banking sector is inseparable from the good performance achieved last year. Up to now, 10 listed banks have released their 2021 performance reports. All of the above-mentioned banks achieved positive growth in their profits last year, and nine banks’ net profit attributable to the parent company increased by more than 20% year-on-year.
Lv Changshun, chief researcher of Shanghai Zhonghe Yingtai Financial Consulting Co., Ltd., told the “Securities Daily” reporter, “The strong earnings performance presented by several bank performance bulletins will undoubtedly play a key role in the increase in the valuation of the banking sector in 2022.”
Banking sector valuation picks up
The increase ranks in the forefront of the Shenwan industry
Flush (300033) iFinD statistics show that the banking sector index in the Shenwan primary industry has a cumulative increase and decrease of -3.65% last year, which is not only far weaker than the performance of the Shanghai Stock Exchange that year, but also ranked among the 31 Shenwan primary industry indices. lower ranking.
The long-term slump in the valuation of the banking sector last year also put pressure on the stock prices of individual listed banks. As of the close of trading on December 31, 2021, among all 41 A-share listed banks, the number of banks with negative stock price changes during the year (after the resumption of rights) has reached 32, and many listed banks’ stock prices have broken net. After entering 2022, the overall performance of listed banks’ stock prices bid farewell to the previous “darkest moment”. In the half-month after the new year, the valuation of the banking sector has recovered significantly.
As of the close on January 17, the banking sector has increased by 1.77% during the year, ranking fifth in the Shenwan primary industry index. At the end of last week, the banking sector led the Shenwan primary industry index.
Among the 41 bank stocks in the Shanghai and Shenzhen stock exchanges, the number of banks whose stock prices rose during the year reached 35, accounting for as high as 85%. A total of 8 banks’ accumulative stock prices rose by more than 5%. Chengdu Bank (601838) and Jiangsu Bank (600919) performed more strongly. The accumulative stock price increases of the two banks reached double digits, 13.69% and 11.65% respectively. Meanwhile, the average price-to-book ratio of listed banks has risen from 0.83 times as of the end of last year to 0.85 times now.
In this regard, Liao Zhiming, chief analyst of the banking industry of China Merchants Securities, told the “Securities Daily” reporter that because he was excluded from the popular track last year, institutional funds flowed out of the banking sector, which affected its market performance. This year, the style of pursuing high valuation and high growth has changed. The once popular sector has lost its glory after the new year. At present, the valuation of bank stocks has deviates from the fundamentals to a considerable extent, and there is a situation of being undervalued, which has made the banking sector regain its momentum. favor.
10 Banks’ performance reports were unveiled
Earnings all achieved substantial growth
As of the end of last week, 10 bank performance reports have been disclosed. The performance report shows that the above-mentioned banks have achieved substantial growth in profits last year. Among them, the net profit attributable to the parent of Jiangsu Bank increased by 30.72% year-on-year. At the same time as the substantial growth in profits, the asset quality of listed banks has also improved significantly. The non-performing loan ratios of the 10 banks that disclosed their performance reports as of the end of 2021 have declined across the board compared to the beginning of last year. The non-performing loan ratios of Changshu Bank (601128) and Zhangjiagang Bank (002839) by the end of last year were both lower than 1%.
Liao Zhiming said that the frequent performance reports of good news indicate that the overall profitability of listed banks in 2021 will maintain a good level. Among them, the performance of high-quality city commercial banks and joint-stock banks will be more dazzling, and the strong profit growth in 2021 will also make Banking sector valuations out of last year’s trough.
While the performance in 2021 is expected, the performance of listed banks in 2022 is still expected to maintain a steady growth trend. The “2022 Commercial Bank Operation Outlook Report” recently released by the Bank of Communications Financial Research Center pointed out that in 2022, the growth of bank profits will return to normal, and it is expected that the net profit attributable to the parent company of listed banks will increase by about 6.5% year-on-year. In addition, with the more prudent risk appetite of commercial banks and the intensified efforts to dispose of non-performing assets, it is expected that the overall asset quality will be stable and controllable in 2022, and the non-performing ratio will remain at around 1.8%.
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