The Zhitong Finance App learned that on the evening of October 11, 2023, the four major state-owned banks of Gongnong China Construction jointly announced that they had received an increase in Huijin's holdings on the same day, and announced that Huijin will continue to increase their holdings in the secondary market for 6 months from the date of this increase in holdings. Now, the six-month increase period has arrived. On the evening of April 12, the four major state-owned banks collectively announced the increase in Huijin's holdings. According to the announcements issued by the four major banks this evening, as of April 10, 2024, the four major banks of Gongnong China Construction have obtained a total of 1,089 billion shares of Huijin Company's increased holdings. Based on the average price of the range, they spent a total of about 4.82 billion yuan.

Specifically, according to the Agricultural Bank's announcement, as of April 10, 2024, Huijin has increased its A-share holdings by a total of 401 million shares through the Shanghai Stock Exchange trading system, accounting for about 0.11% of the bank's total share capital. According to the data, Huijin holds a total of 140.489 billion A-shares of the Agricultural Bank, accounting for about 40.14% of the bank's total share capital. Based on the Agricultural Bank's average price of 3.85 yuan/share from October 11, 2023 to April 10, 2024, Huijin spent about 1,544 billion yuan to increase its holdings.

According to the announcement issued by the Bank of China, as of April 10, Huijin had increased its A-share holdings by a total of 330 million shares through the Shanghai Stock Exchange trading system, accounting for 0.11% of the bank's total share capital; Huijin held a total of about 18.792 billion A-shares of the bank, accounting for about 64.13% of the bank's total share capital. Based on the Bank of China's average price of 4.14 yuan/share from October 11, 2023 to April 10, 2024, Huijin increased its total holdings and spent about 1,366 billion yuan.

CCB also issued an announcement stating that as of April 10, Huijin had increased its A-share holdings by 71 million shares through the Shanghai Stock Exchange trading system, accounting for about 0.03% of the bank's total share capital. Based on the average price of 6.65 yuan/share from October 11, 2023 to April 10, 2024, China Construction Bank spent about 472 million yuan.

The Industrial and Commercial Bank also disclosed the increase in Huijin's holdings. As of April 10, 2024, Huijin has increased its A-share holdings by a total of 287 million shares through the Shanghai Stock Exchange stock trading system, accounting for about 0.08% of the Bank's total share capital. Based on the average price of 5.01 yuan/share from October 11, 2023 to April 10, 2024, ICBC spent about 1,438 billion yuan.

According to information, Huijin is known as the national team. Dong Ximiao, chief researcher at CMB, said earlier that the current “national team” Huijin Company and China Securities Finance Company are actually similar to equalization funds in overseas markets. If the easiest and most direct method is to inject capital into these “national teams” on a large scale, the Ministry of Finance or the central bank can achieve a similar function of a leveling fund. “The increase in Huijin's holdings helps large banks stabilize stock prices and better achieve a controlling position over state-owned banks. At the same time, the adoption of such measures also sends a signal of stability and boosting market confidence, which is conducive to promoting the healthy development of the capital market. ”

Recently, with the intensive disclosure of the 2023 annual reports of listed companies, some of the “National Team”'s heavy stocks have surfaced. The title “National Team” represents a number of heavyweight institutions such as Central Huijin, China Securities, Securities Asset Management, investment platforms under the Foreign Affairs Administration, and customized securities funds. Meanwhile, the investment trend of the “national team” is also the focus of market attention and plays the role of an “investment weather vane.” As of press release, Choice data shows that among the listed companies that have published the 2023 annual report, the national team appeared on the list of the top ten tradable shareholders of 164 listed companies. Looking at it over a long period of time, 155 individual stocks, including ZTE, Yantian Port, and Zhonglian Heavy Industries, have been held by the national team for more than 5 consecutive years.

Looking back further, 10 listed companies, including Bank of China, China Construction Bank, Agricultural Bank, Xinhua Insurance, Industrial and Commercial Bank, Shenwan Hongyuan, China Life Insurance, Sinopec, Everbright Bank, and CNPC, have held positions with the national team for more than 10 years. Judging from the industry distribution, individual stocks that have been held by the national team for a long time are concentrated in the banking, non-bank finance, and petroleum and petrochemical sectors.

According to the annual report data disclosed in 2023, the shares held by the national team of the Bank of China accounted for the highest proportion of tradable shares, reaching 67.44%. The shares held by China Construction Bank, Agricultural Bank, Industrial and Commercial Bank, and Everbright Bank, which are in the same banking sector, were 58.22%, 41.03%, 35.75%, and 1.67% of tradable shares, respectively, from the national team.

Specifically, the Bank of China, China Construction Bank, Agricultural Bank, Industrial and Commercial Bank, and Everbright Bank received shares of the national team with a market value of 891,459 billion yuan, 1023.173 billion yuan, 614.552 billion yuan, 677.953 billion yuan, and 2,988 billion yuan respectively. According to the annual report data disclosed in 2023, the Bank of China was heavily held by Central Huijin Investment Co., Ltd., China Securities Finance Co., Ltd., and Central Huijin Asset Management Co., Ltd., ranking the company's first, third, and fourth largest tradable shareholder.

Coincidentally, when Huijin increased its A-share holdings in the four major banks, Shanghai-Shenzhen-Hong Kong Stock Connect's north-south capital was also simultaneously increasing bank stock holdings.

According to a report released by SPDB International's chief strategy analyst Lai Ye-ye this week, the north-south capital of the Shanghai-Shenzhen-Hong Kong Stock Connect favored the defensive value sector in March, with bank stocks becoming the focus of capital.

According to SPDB International's report, the total amount of northbound capital purchases in the A-share banking sector in March exceeded 5 billion yuan, of which inflows in the last week of March accounted for about half, which means that short-term capital inflows are accelerating.

In terms of Hong Kong stocks, domestic bank stocks became the primary direction for southbound capital to increase their positions in March, with a cumulative inflow of over 10 billion yuan in capital inflows. This has also enabled the four major banks, H shares, to clearly outperform the Hang Seng Index since this year. Among them, the Bank of China's H shares increased its holdings by a total of 2,036 billion shares in March, ranking at the top of the domestic bank stock list, involving about HK$6.5 billion at the average price for the period.

It is worth noting that according to Wind data, after entering April, Southbound Capital continued to increase its holdings in the domestic banking sector of Hong Kong stocks.

Zhou Maohua, a macro researcher at the Financial Markets Department of Everbright Bank, said that Huijin's increase in bank shares as the majority shareholder is more strategic. The increase in majority shareholders' holdings will help increase bank capital and enhance operating capacity; at the same time, the economy is recovering steadily, and the trend in real economy business conditions is improving, which is beneficial to the bank's asset quality and profit prospects. Currently, bank stock prices are in a broken state, and the majority shareholders are optimistic about the bank's subsequent valuation repair market.

Zhou Maohua further pointed out that the majority shareholders' increase in bank stock holdings reflects, on the one hand, the majority shareholders' approval of the bank's operating conditions and increased confidence in its future development; on the other hand, the bank's current valuation is low, and it is still in a broken state, and the transaction is relatively cost-effective. Furthermore, the majority shareholders increase their holdings, which helps to enhance investor confidence.

Furthermore, according to the CITIC Construction Investment Research Report, with a high base for the same period last year plus this year's policy guidance for smooth credit growth, there was a slight year-on-year increase in social finance in the first quarter, which is in line with expectations. Credit investment has returned to the normal investment rhythm of “4321,” which helps banks to better achieve volume-price balance. Structurally, the trend of “stability and weak retail” continues, and the recovery in demand for effective credit still needs to be further observed. Looking ahead, as the high base effect weakens, the growth rate of social finance in the first quarter is likely to be low during the year. It is expected that the subsequent economic recovery trend will gradually become clear, driving credit investment to further show a better situation of “stable quantity and excellent quality”, which is beneficial to valuation repair in the banking sector.

Related concept stocks:

Bank of China (03988): The Bank of China announced its 2023 results, with net interest income of 466.545 billion yuan, up 1.58% year on year; operating income of 624.138 billion yuan, up 6.42% year on year; the bank's shareholders' profit after tax was 231.904 billion yuan, up 2.38% year on year; basic earnings per share were 0.74 yuan, with a final dividend of 2.364 yuan for every 10 shares.

Agricultural Bank (01288): Agricultural Bank announced its 2023 results, with operating income of 695.468 billion yuan, up 0.03% year on year; net interest income of 571.75 billion yuan, down 3.07% year on year; net profit attributable to shareholders of the parent company was 269.356 billion yuan, up 3.91% year on year; basic earnings per share were 0.72 yuan, with a cash dividend of 2.309 yuan (tax included) for every 10 shares.

ICBC (01398): ICBC announced results for the year ended December 31, 2023. The Group obtained net interest income of RMB 655,013 billion, a decrease of 5.34%; operating income of RMB 806.458 billion, a year-on-year decrease of 4.26%; net profit attributable to shareholders of the parent company of 363,993 billion yuan, an increase of 0.79% year on year; basic earnings per share of 0.98 yuan, and a proposed cash dividend of RMB 3.064 per 10 shares.

China Construction Bank (00939): The company's net interest income in 2023 was 617.233 billion yuan, down 4.11% year on year; operating income was 745.615 billion yuan, down 1.57% year on year; net profit attributable to the bank's shareholders was 332,653 billion yuan, up 2.44% year on year; basic and diluted earnings per share were 1.31 yuan, and a cash dividend of 0.4 yuan per share was planned.