The Zhitong Finance App learned that Open Source Securities released a research report saying that in January 2024, RMB loans (financial data) increased by 4.92 trillion yuan, an increase of 20 billion yuan over the previous year, higher than market expectations. Structurally, medium- and long-term loans were clearly driven by residents. The bank believes that the “good start” that exceeded expectations in January mainly benefited from the Spring Festival misalignment effect, and that banks usually increase credit investment at the beginning of the year, considering the decline in new interest rates brought about by subsequent LPR declines. The sustainability of the credit boom still needs to be judged by the February-March financial data. The bank said that the increase in social finance in January 2024 exceeded expectations, the structure improved markedly, the general loan boom was high, the bank had more realistic support for achieving volume and price balance, focusing on high-quality regional banks and dividend strategy stock banks.

Open source securities views are as follows:

The degree of capital activation has increased, and the total amount of social finance continues to recover

The difference in growth between social finance and M2 has returned to a positive range, and corporate and financial deposits are growing relatively well. The M1 growth rate rebounded sharply due to the Spring Festival misalignment effect. The M2-M1 scissor difference fell to its lowest level since May 2021, and the social finance-M2 growth difference returned to the positive range after a lapse of 21 months. RMB deposits increased by 5.48 trillion yuan in January in the same month, mainly driven by enterprise+fiscal deposits. The growth in residents' savings is slowing down, and may be affected by pre-Spring Festival spending, high base, and growth in the scale of financial management. Total social finance continued to recover, and corporate bonds and undiscounted banknotes contributed greatly. In January 2024, social finance added 6.5 trillion yuan, an increase of 506.1 billion yuan over the previous year, continuing the recovery trend. Structurally: (1) The yield on credit bonds fell sharply in January, boosting corporate demand for debt issuance; (2) undiscounted bank notes and trust loans increased year-on-year, reflecting the weak motivation for borrowing through notes in bank statements, confirming strong demand for general loans; (3) the scale of loan growth was high, but there was a slight year-on-year decrease due to the high base effect, and the absolute value of growth was not weak.

Credit's “good start” in January exceeded expectations, with highlights for both public and retail

In January 2024, RMB loans (financial data) increased by 4.92 trillion yuan, an increase of 20 billion yuan over the previous year, higher than market expectations. Structurally, medium- and long-term loans were clearly driven by residents. (1) Enterprises: The absolute value of the monthly increase in public loans was not weak. It was the second highest in the same period since 2012, with a year-on-year decrease under the high base effect; (2) Residents: short-term loans and medium- to long-term loans both increased year-on-year, or related to the Spring Festival misalignment effect and real estate optimization policies.

Why is there a high demand for public loans? First, there is a spontaneous recovery in market demand: the rise in manufacturing sentiment in January drove a recovery in demand for public financing; the second is policy catalysis: the launch of trillion treasury bonds and PSL is expected to leverage the expansion of loan demand; the reduction in deposit listing interest rates is compounded and downgraded, driving a steady decline in comprehensive social financing costs.

Why is there a year-on-year increase in residents' loans? On the one hand, due to the fact that it is on the eve of the winter vacation and the Spring Festival, demand for loans driven by consumption is relatively strong, boosting the recovery of residents' short-term loans; on the other hand, several cities have recently restarted housing ticket placement policies and lowered the threshold for home purchases, which has had a certain stimulating effect on demand for home purchases, and residents' demand for medium- to long-term loans has improved.

The success of the “good start” credit still needs to be paid attention to the February-March financial data. The bank believes that the “good start” that exceeded expectations in January mainly benefited from the Spring Festival misalignment effect, and that banks usually increase credit investment in the beginning of the year considering the decline in new interest rates brought about by subsequent LPR declines. The sustainability of the credit boom still needs to be judged by looking at financial data for February-March. Investment is expected to focus on policy support areas such as infrastructure, manufacturing, and real estate projects.

Looking forward to credit throughout the year through new changes in monetary policy thinking

“New” changes in monetary policy thinking: (1) putting social finance ahead of money supply to promote stronger economic claims; (2) emphasizing strengthening policy coordination and coordination; (3) first proposed “rationally grasping the relationship between the two largest financing markets of bonds and credit”; (4) proposing “reducing excessive attention to monthly monetary credit data.” “New” characteristics of credit supply and demand throughout the year: Regulation continues to encourage a “steady pace” and proposes to revitalize the stock by increasing write-offs and increasing the share of direct financing. Considering the high base of new loans added in February and March 2023, 2024Q1 loans are expected to increase slightly year-on-year, but the scale is definitely high; the bank's “good start” is expected to achieve volume-price balance. The “new” interest rate self-regulation mechanism requires: (1) strengthening the supervision, management, assessment and evaluation of LPR quotes to improve the quality of quotations; (2) urging banks to continue to improve interest rate pricing mechanisms for deposits and loans and adhere to risk pricing principles; (3) establishing and improving self-regulatory interview and notification mechanisms to enhance the seriousness and authority of interest rate self-regulation.

Investment advice: focus on high-quality regional banks and dividend strategy stock banks

The increase in social finance in January 2024 exceeded expectations, the structure improved markedly, the general loan boom was high, and banks had more realistic support for achieving volume-price balance. More optimistic: (1) Valuation restoration of high-quality regional banks, benefiting from Bank of Suzhou (002966.SZ), Bank of Chengdu (601838.SH), Bank of Changshu (601128.SH), Bank of Jiangsu (600919.SH), Ruifeng Bank (), etc.; (2) Stock bank allocation logic with low valuation+high dividend, benefiting targets such as China CITIC Bank (USD) and Everbright Bank (). 601528.SH 601998.SH 601818.SH

Risk warning: Macroeconomic growth is declining, policy implementation falls short of expectations, etc.