Securities companies have another bumper harvest.
As of February 9, Citic Securities Company Limited(600030) , Guotai Junan Securities Co.Ltd(601211) , China Merchants Securities Co.Ltd(600999) and other 32 securities companies (including listed securities companies and the parent company of securities companies) had handed over their transcripts in 2021, of which 27 had a year-on-year increase in profits, accounting for up to 80%.
Some small and medium-sized securities companies, such as Central China Securities Co.Ltd(601375) , Guosheng securities, Xiangcai securities and The Pacific Securities Co.Ltd(601099) , all achieved outstanding performance growth last year, and the net profit is expected to double.
The pattern of the leading securities companies is more obvious. The predicted net profit of four leading securities companies, including Citic Securities Company Limited(600030) , Guotai Junan Securities Co.Ltd(601211) , China Merchants Securities Co.Ltd(600999) and Guosen Securities Co.Ltd(002736) , has reached 10 billion. Among them, Citic Securities Company Limited(600030) ranked first with a net profit of 23 billion yuan, with an increase of 54.2%; Guotai Junan Securities Co.Ltd(601211) ranked second, with a net profit of 15 billion yuan, an increase of 34.98%.
It is worth mentioning that the performance of characteristic securities companies with strong wealth management business of is significantly better than that of the industry. For example, the performance growth of Orient Securities Company Limited(600958) and China stock market news in 2021 exceeded 70%, with a significant increase of . Zhongtai Securities Co.Ltd(600918) analyst Lu Yunting believes that wealth management is the sunrise track of the financial industry, and the performance of bond business with strong wealth management business will continue to be strong.
Data source: Zhongtai Securities Co.Ltd(600918) Research Report
80% of securities companies’ profits increased
On January 5, Citic Securities Company Limited(600030) took the lead in issuing the announcement of performance pre increase.
According to the performance express, Citic Securities Company Limited(600030) in 2021, the operating revenue and net profit attributable to the parent company were 76.57 billion yuan and 22.979 billion yuan respectively, with a year-on-year increase of 40.8% and 54.2%, the highest in five years, and continued to be the champion.
Meanwhile, with the continuous development of light capital business, the weighted roe in 2021 increased by 3.58 percentage points year-on-year to 12.01%.
Citic Securities Company Limited(600030) said that China’s economy overcame the impact of the epidemic, continued to improve, and the capital market developed vigorously. The company’s investment banking, asset management and other businesses developed in a balanced and steady manner in 2021.
Subsequently, Guotai Junan Securities Co.Ltd(601211) , China Merchants Securities Co.Ltd(600999) , Guosen Securities Co.Ltd(002736) successively released performance letters.
Of which Guotai Junan Securities Co.Ltd(601211) achieved an operating revenue of 42.669 billion yuan in 2021, with a year-on-year increase of 21.22%; The net profit attributable to the parent company was 15.013 billion yuan, a year-on-year increase of 34.98%; Weighted roe increased by 2.5 percentage points year-on-year to 11.04%.
China Merchants Securities Co.Ltd(600999) in 2021, the operating revenue was 29.386 billion yuan, with a year-on-year increase of 21.04%; The net profit attributable to the parent company was 11.613 billion yuan, a year-on-year increase of 22.35%. Guosen Securities Co.Ltd(002736) it is estimated that the net profit attributable to the parent company will reach 9 billion to 10.5 billion yuan in 2021, with a year-on-year increase of 36% to 59%.
In addition to the above four securities companies with an expected growth of more than 10 billion yuan, China stock market news, Orient Securities Company Limited(600958) , Everbright Securities Company Limited(601788) and Anxin securities also achieved good performance in 2021, with a net profit of more than 3 billion yuan, ranking high in the industry.
In terms of performance growth rate, Central China Securities Co.Ltd(601375) , Guosheng securities, Xiangcai securities and other three small and medium-sized securities companies have a small scale, with a performance increase of more than 100%. In addition, The Pacific Securities Co.Ltd(601099) securities have turned losses into profits, and the net profit is expected to achieve a year-on-year increase of more than 111.83 ~ 115.77%.
Insiders said that although the performance base of securities companies was relatively high in 2020, under the background of active market trading last year, the net income of brokerage, investment banking, asset management and other businesses of securities companies maintained a year-on-year growth.
The net profit of 5 securities companies fell, and self operation may be the main reason
However, in the general upward trend of industry profits, five securities companies still experienced a year-on-year decline in net profits.
According to the income statement of Zhongshan securities, its operating revenue fell from 1.256 billion yuan in 2020 to 646 million yuan in 2021, a decline of nearly 50%; The net profit also declined significantly, from profit to loss. In 2020, the securities firm made a profit of 241 million yuan, but in 2021, it lost 124 million yuan.
Specifically, in 2021, the income of Zhongshan securities investment bank and proprietary business decreased significantly.
Among them, the income from proprietary business decreased from 61 million yuan in the previous year to 157 million yuan, and the income from investment banking decreased from 726 million yuan in the previous year to 323 million yuan.
In August 2020, Zhongshan securities received the decision on administrative supervision measures, including suspending the filing of new capital management products and new capital consuming businesses within one year from the date of making the decision on administrative supervision measures. Suspend counterparty transactions with related parties with its own funds or asset management funds, including bond pledge repo transactions. Its performance decline in 2021 was also partly affected by this.
Minmetals securities is also dragged down by proprietary trading. In 2021, the company’s revenue from credit business and proprietary business decreased year-on-year. During the reporting period, the two businesses achieved operating revenue of 493 million yuan and 208 million yuan respectively, accounting for 26.84% and 11.32% of revenue, and the revenue decreased by 3.71% and 47.47% year-on-year.
Some securities traders said that under the Matthew effect of the industry, small and medium-sized securities companies need to go out of characteristic development to earn differentiated income.
wealth management becomes the main line of future investment
According to the statistics of 21st Century Business Herald reporter, in the echelon of top securities companies, securities companies with high performance growth benefit from the continuous development of wealth management business .
For Orient Securities Company Limited(600958) with the highest growth rate, in the performance forecast, the net profit attributable to the parent company in 2021 will be 5.038 billion yuan to 5.582 billion yuan, with a year-on-year increase of 85% to 105%.
In this regard, Orient Securities Company Limited(600958) said that in 2021, the trading of China’s capital market was active, and a number of market indicators reached a record high. The main reasons for the year-on-year growth of investment banking, brokerage business and net income of associated enterprises are the year-on-year growth of investment banking and management companies; Meanwhile, the provision for credit impairment decreased year-on-year.
Gao Gao, an analyst at Kaiyuan securities, said that Orient Securities Company Limited(600958) wealth management and public fund-raising management businesses have obvious first mover advantages and fully benefit from the expansion of wealth management market space. It is expected that the net profit of large wealth management business lines will reach 2.7 billion in 2021, an increase of 41% and a profit contribution of 50%.
China stock market news securities also maintained a high growth rate. According to the unaudited financial report of 2021, the operating revenue in 2021 was 7.3 billion yuan, a year-on-year increase of 58.76%; The net profit was 4.825 billion yuan, a year-on-year increase of 66.89%.
In fact, since 2018, various securities companies have carried out wealth management transformation of brokerage business lines.
The business income of securities companies selling financial products on a commission basis increased rapidly. According to the data, it reached 10.05 billion yuan in the first half of 2021, accounting for 14% of the brokerage business in the first half of 2021, up from 2% in 2014.
In addition, securities companies are constantly building investment advisory system in order to help match excellent products with appropriate customers.
Jin Wenzhong, chairman and President of Orient Securities Company Limited(600958) , once said that the pilot launch of the investment consulting business of public funds is an effective achievement in the implementation of the Orient Securities Company Limited(600958) strategic plan and a new starting point for the transformation and upgrading of wealth management. It is of great significance for the company to quickly consolidate its wealth management market advantages and open up a new development track.
Hualong Securities believes that under the background of the continuous introduction of capital market policies in the future and the promotion of residents’ demand for wealth management by the policy of “common prosperity and no speculation in housing and housing”, the growth of securities companies is becoming more and more prominent. In 2022, wealth management is still the main driving force for the fundamental growth of securities companies, and institutional business will also usher in opportunities for growth and transformation, which is expected to form a trend synergy with wealth management business. The transformation of wealth management business of securities companies and the transformation of proprietary customer demand business are conducive to reducing income fluctuations and improving performance certainty. The steady growth of roe is conducive to the improvement of long-term valuation center.
