On February 23, a month later, the turnover of Shanghai and Shenzhen stock markets exceeded 1 trillion yuan again. Boosted by the market, the “bull flag bearer” securities sector rose as a whole, and the valuation of wealth management securities companies was repaired to some extent.
The Chinese reporter of the securities firm noted that since 2022, the A-share market, led by the gem, has fallen sharply, causing a sharp fluctuation in the net value of public funds, which has led to concerns about fund redemption. The market’s expectation of wealth management business has decreased, resulting in a sharp decline in the characteristic securities firms of wealth management, which rose sharply last year.
However, some small and medium-sized securities companies, such as Chinalin Securities Co.Ltd(002945) , Guolian Securities Co.Ltd(601456) and Central China Securities Co.Ltd(601375) , have gone out of the independent market for many reasons, such as outstanding performance in technology finance and performance.
Industry insiders believe that in recent years, with the promotion of capital market reform and the improvement of residents’ financial management concept, there is still broad space in the wealth management market. The large asset management and consignment business of securities companies still face a large demand market, and the market stabilization is expected to re consolidate this logic.
securities companies with high “wealth ratio” were hit hard
Since 2022, the brokerage sector has completely broken the upward logic of last year and fell sharply due to the negative sentiment of the market.
On February 23, the turnover of Shanghai and Shenzhen markets recovered to 1 trillion yuan, and the whole securities sector also rose again, with only Chinalin Securities Co.Ltd(002945) and Guolian Securities Co.Ltd(601456) falling.
However, according to the data since 2022, 45 of the 49 brokerage concept stocks fell, and the leading decline was the wealth management characteristic brokerage that was popular last year.
According to the data, as of February 23, the brokerage stocks with the top five declines this year were China stock market news, Gf Securities Co.Ltd(000776) , Orient Securities Company Limited(600958) , China Industrial Securities Co.Ltd(601377) and China Greatwall Securities Co.Ltd(002939) , with cumulative declines of 28.86%, 23.22%, 15.94%, 14.17% and 14.13% respectively.
You know, after the second half of 2021, the above five securities companies, such as China stock market news, have become popular securities companies in the market because of their holding or participation in large public fund companies, and have been marked with their wealth management characteristics by their high “wealth ratio” in the industry.
For example, China stock market news owns Tiantian fund, the industry’s top fund sales platform, while Gf Securities Co.Ltd(000776) holds and participates in the leading public funds Guangfa fund and e fund, Orient Securities Company Limited(600958) owns Dongzheng asset management, China Industrial Securities Co.Ltd(601377) holds Xingzheng Global Fund, China Greatwall Securities Co.Ltd(002939) owns Jingshun Great Wall Fund and Great Wall fund.
However, in 2022, the logic of “wealth ratio” seems to have been completely abandoned, and China stock market news, Gf Securities Co.Ltd(000776) , Orient Securities Company Limited(600958) have become the main force leading the decline among securities companies.
“At present, the performance differentiation of securities companies’ stocks is mainly affected by the overall style switching of the market and the demand for profit cashing.” Chen Mengjie, chief strategic analyst of YueKai securities, told Chinese reporters of securities companies.
According to Chen Mengjie’s analysis, since 2022, affected by geopolitics, continuous market adjustment and lack of confidence, the market style of A-Shares has switched to the undervalued high dividend sector with stable growth. Some targets in the superimposed securities sector benefited from the rapid growth of wealth management transformation performance, so they had excellent performance last year. Under the current market valuation background, there is a demand for profit cashing in the short term.
Data show that since 2022, the A-share market, led by the gem, has fallen sharply, causing fluctuations in the net value of public funds. 92.9 billion new public funds were issued in January, a decrease of 50% compared with December 2021.
“Recently, there are concerns about the redemption of public funds in the market. The negative sentiment in the market has led to lower expectations for wealth management business, which led to a sharp decline in brokerage stocks, especially in individual stocks with wealth management themes,” a brokerage wealth manager told reporters.
small and medium-sized securities companies such as Hualin and Zhongyuan rose
Correspondingly, Chinalin Securities Co.Ltd(002945) , Guolian Securities Co.Ltd(601456) , Guangdong Golden Dragon Development Inc(000712) and Central China Securities Co.Ltd(601375) small and medium-sized securities companies rose, rising by 9.37%, 8.66%, 7.49% and 2.85% respectively this year.
It is reported that Chinalin Securities Co.Ltd(002945) despite its average performance in 2021, the company has made frequent actions in the field of science and technology finance since last year, seeking to take the route of science and technology characteristics and get rid of homogeneous competition.
On February 21, Chinalin Securities Co.Ltd(002945) announced that it would spend 20 million to acquire its dolphin stock app, or increase tens of millions of online users.
According to people familiar with the matter, behind the seemingly low price equity acquisition, Chinalin Securities Co.Ltd(002945) and byte beat’s comprehensive cooperation amount may exceed 500 million, covering software purchase, technical services, commercial advertising and other fields.
As for the development of asset management business, Chinalin Securities Co.Ltd(002945) executive committee member and asset management tribe president Zhang Dawei told the Chinese reporter of the securities firm that at present, Chinalin Securities Co.Ltd(002945) has established the development strategy of Internet transformation, is accelerating the digital transformation, and is committed to making a difference in Inclusive Finance. The overall strategy of public funds and Chinalin Securities Co.Ltd(002945) can complement each other, Chinalin Securities Co.Ltd(002945) is also actively reserving and distributing public offering businesses.
Zhang Dawei said that in the future, in terms of active management, the company will continue to maintain and carry forward the advantages of the original fixed income products, equity products and investment research, and form an asset management business brand and service with “stable characteristics”. In terms of investment research and customer service, we will continue to firmly use scientific and technological means, implement the company’s Internet strategy, combine asset management, investment research decision-making, customer service and business management with financial technology, continue to upgrade and optimize service content and product performance, improve customer experience, and forge core products and competitiveness that meet customer expectations.
Since this year, the rising Guolian Securities Co.Ltd(601456) and Central China Securities Co.Ltd(601375) are among the small and medium-sized securities companies with outstanding performance in 2021.
Among them, Guolian Securities Co.Ltd(601456) is expected to have a net profit of 880 million yuan in 2021, an increase of 292 million yuan over the same period of last year, a year-on-year increase of about 49.72%. As for the main reasons for the pre increase of performance, Guolian Securities Co.Ltd(601456) said that the overall activity of China’s securities market increased in 2021. The company actively grasped the market opportunities, continued to optimize the customer service system, significantly improved the capital scale and operation ability, the pan wealth management system was taking shape, the business structure was more diversified, and the profitability of the company continued to increase.
According to the performance express, in 2021, the operating revenue was 4.415 billion yuan, a year-on-year increase of 42.26%, and the net profit was 506 million yuan, a year-on-year increase of 385.57%. For the performance explosion, Central China Securities Co.Ltd(601375) said that in 2021, China’s capital market reform supporting policies were implemented one after another, the market trading was active, actively grasped the market opportunities, continuously improved the core competitiveness, and the operating performance increased significantly. The main reason for the change is the year-on-year growth of the company’s investment banking business, primary and secondary market investment business and brokerage business.
In addition, Guangdong Golden Dragon Development Inc(000712) holds and shares in two securities companies, Zhongshan securities and Dongguan securities, of which Zhongshan Securities shares 40% of Dongguan securities will hold an IPO on February 24.
is the foundation of wealth management transformation still in place?
In recent years, with the promotion of capital market reform and the improvement of residents’ financial management concept, the wealth of residents’ departments has accelerated the trend of flowing into the capital market, and there is still broad space in the wealth management market.
“The ‘multiplier effect’ brought about by the growth of wealth management scale will also reverse the continuous improvement of the business scale of securities companies and speed up the transformation of securities companies,” Chen Mengjie said.
At the same time, in the context of the significant decline in the average return of the fund last year compared with the previous year, residents’ demand will also shift from the single pursuit of high-yield to more diversified products, so as to achieve the purpose of large-scale asset allocation, which will also bring more development opportunities for the wealth management business of securities companies. In the long run, the wealth management transformation business still has considerable development potential.
Dongxing Securities Corporation Limited(601198) non bank analyst Liu Jiawei said that in terms of investment targets, it is recommended to pay attention to the theme opportunities of wealth management, and the market stabilization is expected to re consolidate this logic. The “blowout” of investment banking business driven by the comprehensive registration system is expected to become the most deterministic growth opportunity for the securities sector. The project supply exceeds the carrying capacity of investment banks to a certain extent, which is expected to promote the improvement of the pricing ability of securities companies. It is suggested to pay attention to the “growth” opportunity of the resonance between big wealth management and “Pan investment banks” in the medium and long term.
Chen Mengjie said that under the background of the general trend of continuous deepening of capital market reform and gradual relocation of residents’ wealth to financial assets, growth companies and undervalued head value companies that are still optimistic about the wealth management track for a long time can realize valuation repair after the decline.
In the current market style, it is suggested to focus on the head companies with strong business ability and comprehensive strength, obvious moat advantages and in the stage of valuation revision. In the medium and long term, companies with differentiated management such as wealth management and technology finance will continue to make efforts, and the continuous outbreak of performance will become an important driving force.
