Current investment tips:
It is estimated that the net profit attributable to the parent company of listed securities companies in 2021e will increase by 32% year-on-year and that in 4q21 will increase by 69% year-on-year. It is estimated that the net profit attributable to the parent company of 42 directly listed securities companies will be 19.6 billion in 2021, with a year-on-year increase of 32%; The net profit attributable to the parent company in a single quarter was 45 billion, an increase of 69% year-on-year.
It is expected that the revenue of all business lines will continue to increase year-on-year under the high base: it is expected that the industry brokerage, investment banking, asset management, net interest and investment business will increase by 10%, 19%, 11%, 29% and 8% year-on-year respectively.
Large asset management business: under the volatile market environment, the scale of non monetary public offering expanded by 36%, and the asset management of securities companies hit the bottom and rebounded. By the end of 2021, the scale of non monetary public offering was 16.1 trillion, with a year-on-year increase of 36%, including 8.6 trillion in stock and mixed public offering, with a year-on-year increase of 34%. In 2021, the new share of stock and mixed public offering was 2.04 trillion, further increasing from the high base in 2020. As of 3q21, the asset management of securities companies has reached 8.1 trillion yuan, with a quarter on quarter increase of 3.9%, which is the first positive month on quarter increase since 2017. After the new asset management regulations, the asset management rectification of securities companies has come to an end, the effect of de channel + active management transformation has appeared, and the asset management of securities companies is expected to enter an upward cycle.
Brokerage and two financial services: the market trading activity is the highest in 2015. In 2021, the daily average stock based turnover was 1137.5 billion, an increase of 25% year-on-year, surpassing the record high in 2015; The average daily balance of two securities lending was 1.8 trillion, a year-on-year increase of 37%, 27% higher than that in 2015, of which the average daily balance of securities lending was 148.4 billion, a year-on-year increase of 176%, and 278% compared with that in 2019.
With the expansion of the public offering market, the consignment of financial products and the rapid development of fund investment consulting business, and the transformation of the brokerage business of head securities companies has accelerated.
Investment banking: IPO was issued normally, and the fund-raising scale reached a record high. In 2021, the market IPO issued 542.7 billion yuan, with a year-on-year increase of 13% from the high base in 2020, surpassing the historical high in 2010; Among them, the IPO issuance scale of gem and Kechuang board was 147.5 billion and 202.9 billion respectively, with a year-on-year increase of + 65% and – 9% respectively. It is expected that with the full implementation of the registration system and the implementation of the policy, the IPO issuance scale will be further improved.
Investment business: the stock scale of OTC derivatives market continues to increase, and the market sensitivity of investment income of head securities companies is weakened. By the end of 2021, the nominal principal scale of OTC derivatives was 2.02 trillion, with a year-on-year increase of 58%, of which the nominal principal scale of income swaps was 1.03 trillion, with a year-on-year increase of 97%, surpassing the scale of OTC options for the first time. It is expected that the non directional proportion of the investment income of CITIC, Huatai and CICC, the leaders of derivatives business, will continue to increase. It is expected that the current OTC derivatives income of CICC will account for more than 40% of the investment income, and the stability of the investment income of head securities companies will be significantly improved in the future.
Investment analysis opinion: reiterate the “optimistic” rating, the performance of securities companies continues to rise, and the long-term wealth management and institutional business growth are determined, but the valuation is low, and the institution is still low. 1) The profit of sector 21e increased by more than 30%. Under the assumption of neutral 2022 (the daily average stock based transaction volume is 1.1 trillion, the daily average balance of two financing is 1.9 trillion, and the scale of non commodity public offering increased by 20% year-on-year), it is expected that the profit of 22e will usher in double-digit positive growth in the fourth year (the first time in History); 2) It is estimated that the 21e roe of the industry has increased year-on-year, second only to 14 and 15 years in recent ten years, but the Pb valuation has fallen in the whole year. The quantile of PE ratio of cash bond merchant sector / CSI 300 index is 23% since 2010; 3) 4q21 active partial stock fund, with heavy positions in Dongcai accounting for 1.27%, and heavy positions in comprehensive securities companies accounting for only 0.68%, significantly lower allocation; 4) The long-term growth space of the public fund market is huge, and the profits of securities companies will continue to increase; Capital market reform continued to advance, and the trend of institutional business concentration accelerated. First Citic Securities Company Limited(600030) / Huatai Securities Co.Ltd(601688) / Gf Securities Co.Ltd(000776) / China International Capital Corporation Limited(601995) – H / China stock market news.
Risk tips: 1) China’s capital easing is less than expected, and the Fed’s interest rate hike disturbs the liquidity easing expectation of a shares, resulting in the decline of A-share trading volume and affecting the performance expectation of securities companies; 2) The reform of the registration system on the main board was promoted at a slower speed than expected, resulting in a year-on-year decline in IPO issuance.
