Securities companies are successively disclosing the provision for asset impairment in 2021. According to the disclosed data, the provision for impairment of securities companies in 2021 may show a pattern of ice and fire.
On February 9, Orient Securities Company Limited(600958) (600958. SH) issued an announcement on the provision for asset impairment.
Coincidentally, Guoyuan Securities Company Limited(000728) (000728. SZ), Everbright Securities Company Limited(601788) (601788. Sh, 06178. HK), The Pacific Securities Co.Ltd(601099) securities (601099. SH), Sealand Securities Co.Ltd(000750) (000750. SZ) also disclosed the provision for asset impairment in 2021. The total amount withdrawn by the five securities companies is as high as 3.628 billion yuan, and the total impact on the net profit in 2021 is as high as 2.903 billion yuan.
In addition, Sdic Capital Co.Ltd(600061) (600061. SH), as the controlling shareholder of Anxin securities, also said in the announcement that the net provision for credit impairment in 2021 was 651 million yuan, reducing the net profit by about 488 million yuan, and the above provision has been included in the unaudited financial statements of Anxin securities in 2021 previously disclosed.
At the same time, Everbright Securities Company Limited(601788) , Orient Securities Company Limited(600958) (600958. Sh, 03958. HK), Guosen Securities Co.Ltd(002736) (002736. SZ) and Guosheng Securities said in the 2021 performance advance announcement that the provision for impairment loss decreased significantly year-on-year.
The total impairment amount of 5 Securities Companies in 2021 exceeded 3.6 billion yuan
According to the provision for impairment of securities companies in 2021, Orient Securities Company Limited(600958) has the most impairment, reaching nearly 1.317 billion yuan and reducing the current net profit of 987 million yuan; Everbright Securities Company Limited(601788) the net profit of the current period decreased the most, reaching nearly 1.028 billion yuan, and the accrued amount was also nearly 1.128 billion yuan.
Guoyuan Securities Company Limited(000728) and Sealand Securities Co.Ltd(000750) made provision for impairment of nearly 489 million yuan and 422 million yuan respectively, and the current net profit decreased by nearly 367 million yuan and 316 million yuan respectively; The Pacific Securities Co.Ltd(601099) securities has withdrawn nearly 273 million yuan, reducing the current net profit by 204 million yuan.
Specifically, for the items for which the securities company has accrued the provision for asset impairment, Orient Securities Company Limited(600958) , Guoyuan Securities Company Limited(000728) , Sealand Securities Co.Ltd(000750) are mainly dragged down by the stock pledge repo business, The Pacific Securities Co.Ltd(601099) securities, Everbright Securities Company Limited(601788) have accrued large amounts of accounts receivable and estimated liabilities respectively.
Orient Securities Company Limited(600958) in 2021, the provision for impairment of financial assets purchased for resale was RMB 1318267500, mainly for stock pledge items that failed to fulfill the obligation of repurchase or supplementary pledge in accordance with the agreement.
Guoyuan Securities Company Limited(000728) accrued items include financial instruments and other items and other assets. Among them, resale financial assets accounted for 91.92%, mainly Guoyuan Securities Company Limited(000728) for stock pledge projects such as ” Shenzhen Capstone Industrial Co.Ltd(000038) ” ” Jiawei Renewable Energy Co.Ltd(300317) ” and ” Jiangsu Lanfeng Bio-Chemical Co.Ltd(002513) ” defaulted in previous years, according to the further changes of the financier’s credit and the offset value of the pledge, carry out recoverability analysis and increase the provision of expected credit impairment loss.
The items accrued by Sealand Securities Co.Ltd(000750) are also mainly the purchase and resale of financial assets, involving a number of stock pledge repurchase transactions in 2016-2018. It is worth noting that Sealand Securities Co.Ltd(000750) disclosed 21 litigation and arbitration matters in the third quarterly report of 2021, of which 12 involved disputes over breach of stock pledge repo contract.
In addition, from the accrual items of The Pacific Securities Co.Ltd(601099) securities, the accrual amount of accounts receivable is the largest, and the provision for impairment of accounts receivable in 2021 is 396 million yuan. At the same time, 90 million yuan of financial assets bought for resale and 39 million yuan of other creditor’s rights investment were reversed.
Everbright Securities Company Limited(601788) accrued items mainly include estimated liabilities, receivables (including other receivables), financed funds, finance lease receivables, etc. It is worth noting that in 2021, Everbright Securities Company Limited(601788) again accrued an estimated liability of 733 million yuan for MPS; Previously, Everbright Securities Company Limited(601788) has accrued estimated liabilities of RMB 1.55 billion, RMB 1.611 billion and RMB 1.4 billion in 2020, 2019 and 2018 respectively.
The losses accrued by 4 securities companies decreased significantly in 2021
For the provision for impairment in 2021, Everbright Securities Company Limited(601788) further stated in the announcement of annual performance increase in 2021 that the significant decrease of asset impairment loss and estimated liabilities over the previous year also constituted the main reason for the growth of performance in 2021.
Coincidentally, Orient Securities Company Limited(600958) said that the main reasons for the company’s performance in 2021 include the year-on-year decrease in the provision for credit impairment; Guosen Securities Co.Ltd(002736) also disclosed in the 2021 annual performance forecast that the provision for impairment of financial assets decreased during the reporting period.
In addition, according to the balance sheet of Guosheng securities at the end of 2021 and the profit statement of 2021 disclosed in Guosheng Financial Holding Inc(002670) (002670. SZ), the credit impairment loss of Guosheng securities also reversed from 148 million yuan in 2020 to 114 million yuan in 2021.
In recent years, the large provision for impairment losses has been “eroding” the profits of securities companies.
For example, in 2020, Huatai Securities Co.Ltd(601688) (601688. SH), China Galaxy Securities Co.Ltd(601881) securities (601881. SH), Guotai Junan Securities Co.Ltd(601211) securities (601211. SH), China Securities Co.Ltd(601066) (601066. SH) all asset impairment reserves accrued exceeded 10% of the audited net profit in 2019.
China Securities Co.Ltd(601066) the Securities Research Report once pointed out that there are two main reasons why listed securities companies over withdraw impairment losses: on the one hand, from 2018, the revised accounting standards for Business Enterprises No. 22-24 began to apply to listed securities companies, and the new standards changed the treatment method of impairment of financial assets from “incurred loss method” to “expected loss method”, It gives listed securities companies greater autonomy and flexibility in impairment provision, and some listed securities companies begin to use impairment provision as a profit adjustment tool.
On the other hand, in December 2020, the Shanghai and Shenzhen Stock Exchange revised the relevant contents of the delisting system in the stock listing rules: on the one hand, the four types of delisting indicators were optimized and modified to make the indicators more stringent and specific; On the other hand, it simplifies the delisting process, which greatly reduces the speculation time and space of delisted stocks. Affected by this, small cap stocks with delisting risk generally fell; Out of prudent consideration, listed securities companies have accrued the expected losses of stock pledge projects with delisting risk.
However, looking to the future, China Securities Co.Ltd(601066) Securities believes that it is difficult to reproduce the large amount of impairment losses accrued by listed securities companies in successive years: the expected impairment losses accrued by listed securities companies in excess from 2018 to 2020 have fully consolidated the asset quality; In the future years, if the actual impairment loss is less than the accrued impairment loss, the listed securities companies can turn back the more accrued part, so as to thicken the performance of the current year.
