Core view:
In the fourth quarter of 2021, the holding scale of public funds and the channels of securities companies decreased month on month
At the end of January 2022, China Securities Investment Fund Industry Association released the data of the top 100 companies with the holding scale of public funds in the fourth quarter of 2021. Among them, the holding scale of stock + mixed public funds totaled 6460.9 billion yuan, an increase of 4.93% month on month; The scale of non money market public funds was 8326.2 billion yuan, an increase of 8.67% month on month.
The holding scale of securities companies’ channels decreased month on month, and the proportion decreased: in the fourth quarter of 2021, the holding scale of securities companies selling shares on behalf of securities companies + mixed funds was 939.2 billion, a month on month decrease of – 11%; The holding scale of non monetary funds was 1.01 trillion yuan, an increase of 0.75% month on month, and the change tended to be stable after the adjustment of statistical caliber. The proportion of brokerage stocks + mixed and non commodity funds in the top 100 consignment institutions was 14.54% / 12.20% respectively, which decreased by about 5.04pct / 7.29pct respectively compared with 15.31% / 13.16% in the third quarter, and the proportion decreased more, which is related to the impact of market fluctuations. However, the number of top 100 securities companies still has obvious advantages. In the fourth quarter, the number of top 100 institutions decreased by three securities companies ( First Capital Securities Co.Ltd(002797) , Datong securities and YueKai securities), and there are still 46 securities companies. The superposition of quantitative advantages has greater consignment elasticity, and has better consignment performance when the market environment is better or better.
Securities industry perspective
Recently, the average daily turnover of the two cities has dropped due to the pre holiday effect, but the short-term internal and external disturbance does not change the medium and long-term performance of the securities industry. From the perspective of supervision, the policy continues to be loose and good, providing a good development environment for the securities industry. In 2018, after experiencing the stage of large impairment losses caused by credit default events and the continuous downturn of the market, the securities industry began to repair its performance upward since 2019. From the perspective of policy, a number of favorable policies for the securities industry and encouraging the development of innovative business implemented by the state will stimulate the valuation repair and upward of the securities sector. In addition, the establishment of Beijing stock exchange will directly promote the growth trend of IPO business, and is expected to improve the activity of relevant business markets and continue to catalyze the performance of securities companies.
We believe that the supporting logic for the performance growth of the securities industry at this stage lies in:
(1) the increase in performance brought about by the transformation of brokerage business to wealth management mode is mainly due to the constant trend of residents’ deposits from banks that bring lower returns and liquidity to the stock market that can bring higher returns and high liquidity, superimposed by the expansion of securities companies’ fund investment adviser pilot, the gradual expansion of fund holdings and the increase of residents’ demand for active management business, The simultaneous rise of volume and price promotes the continuous rise of the outlook of the securities industry.
(2) the performance increment contributed by the new market places bred by innovative business, such as the expansion of securities lending scale, the strong demand for derivatives business inside and outside the market, the exploration of securities settlement fund model and the popularization of “investment bank + investment” two wheel driven business model, will raise the performance level of securities companies. From the perspective of the whole securities industry, the above growth support logic will provide a new revenue growth point for the whole industry; For large-scale securities companies, it will further develop in the strategic direction of building aircraft carrier level securities companies in the country; For small and medium-sized securities companies, their exhibition direction and ability will benefit from the new blue ocean market and earn differentiated income.
Recommended target: securities companies with strong wealth management ability: Gf Securities Co.Ltd(000776) *, Orient Securities Company Limited(600958) *, China Industrial Securities Co.Ltd(601377) (*: not deeply covered yet)
Risk tip: the effect of policy implementation is less than expected or even tightened, liquidity is tightened, stock based turnover has fallen sharply, and the overall market downside risk.
