China’s commercial banks are a very special existence! Mainly reflected in two aspects:
1. Banking is the most profitable industry in China. According to statistics, among A-share listed companies, the net profit of bank stocks accounts for 40% of the net profit of all A-share companies. More than %, among them, Industrial and Commercial Bank of China, China Construction Bank, Agricultural Bank of China, Bank of China , China Merchants Bank have always occupied the top five positions in the A-share income statement, and 13 of the top 20 listed companies in profit are commercial banks.
2. Banking has the lowest price-to-earnings ratio in any industry in China. Currently, the price-to-earnings ratio of all listed banks is basically between 4 and 7 times. Of course, there are a handful of small banks with slightly higher price-to-earnings ratios. In theory, banks have the lowest price-to-earnings ratios. If you take out a loan to fully acquire a bank, the annual dividends will be enough to cover the loan interest.
The data above is still A-share. If we look at the stocks of mainland Chinese commercial banks listed on Hong Kong stocks , we will find that the valuation of the banks is simply terrible. Taking Minsheng Bank as an example, the A-share earnings ratio is 4.7 times, and the Hong Kong stocks The price-to-earnings ratio is only 3.2 times. Let’s take a look at the price-to-book ratio data of mainstream listed banks:
9 Among the large listed joint-stock banks, only China Merchants Bank’s price-to-book ratio exceeds 1, while Minsheng Bank and Huaxia have a price-to-book ratio of only 0.32. These nine banks The average price-to-book ratio is only 0.42 times, which means that the net assets of a bank stock currently worth 10 yuan per share are nearly 25 yuan. What a "cost-effective" business this is! Why don't investors buy it?
Many people explain that the reasons why bank stocks have low price-to-earnings ratios and are difficult to rise are simply the following:
1. Bank stocks are too large to be speculated on, but there are also stocks with a market value of tens of billions among bank stocks, so why can't they rise? Go less? Besides, the market for liquor stocks is also very large, such as Moutai, Wuliangye , Luzhou Laojiao , etc. Why is the price-to-earnings ratio of liquor stocks much higher than that of bank stocks? So this statement is not valid!
2. The expected profit growth rate of bank stocks is not as high as other industries, which is even more untenable. I wonder which industry in China can maintain the profit growth rate of banks. Although the net profit growth rate of bank stocks is generally in the year The growth rate is about 10%, but it is very stable, and its growth rate exceeds that of most industries! So this statement is not valid!
In fact, the core reason why bank stocks are difficult to rise is one: even the banks themselves cannot figure out how many bad debts they have!
Although the current bank loans have a strict five-level classification-normal, special mention, substandard, doubtful, and loss, the latter three are classified as non-performing assets. In essence, they have been overdue or lost, and the probability of recovery is not High, but what about the one classified as normal and concerned?
Among the special mention loans, a considerable part are non-performing assets. For example, loans that are overdue for less than 3 months are still special mention loans, but they are already overdue for 3 months. What is the probability that they can be recovered?
As for normal loans, are they really normal? Every bank will assess the defect rate and attention rate of its branches, which are directly related to the salary and performance bonus of the entire branch, so everyone will do their best to achieve the goal, but how to do it?
It is easy to handle, that is, revolving loans, changing the subject to renew the loan , etc. The case of PF Bank Chengdu Branch is the most typical. In order to maintain normalcy with tens of billions of non-performing loans, when a company cannot repay the money, let the owner of the company register a new company, and the bank will lend money to the new company to repay the old company's loan, as long as the interest is If it can be maintained, it can continue to circulate.
Therefore, under such operations, many bank headquarters themselves do not know the actual number of non-performing assets, let alone investors and stockholders.
