Securities industry tracking
This week, the securities II (CITIC) index was – 3.04%, underperforming the CSI 300 index and the non bank finance (CITIC) index.
\u3000\u30001. Comments on policies and data this week
The CSRC issued the measures for the supervision and administration of directors, supervisors, senior managers and employees of securities fund operating institutions. The administrative measures comprehensively stipulates the job requirements, practice norms and management responsibilities of the personnel of securities fund operating institutions. The main contents include: first, optimize the job management of personnel according to the classification principle; Second, strengthen professional norms and implement the requirement of “zero tolerance”; Third, consolidate the main responsibility of the operating organization
Industry development foundation.
Comments: from the perspective of the introduction background, the administrative measures is not only the integration of the current regulations on the management of institutional personnel, but also the supplement and detail improvement of the superior law, the securities law and the fund law; From the perspective of core changes, the measures reflect the change of attitude from pre approval to in-process and post supervision, implement the requirements of “release management service”, relax some hard conditions in the employment approval of senior executives and special talents, and mainly improve the approval process and requirements in combination with the actual business pain points; Secondly, in terms of the introduction of overseas talents, the restriction on the proportion of foreigners serving as senior executives in securities companies has been abolished, space has been reserved for the mutual recognition of the qualifications of overseas professionals, and industry associations have been authorized to take charge of relevant work, so as to further accelerate the opening of the capital market to the outside world.
On February 18, the CSRC centrally announced the replies to the proposals of the two sessions, involving many issues of capital market reform. The main contents include: actively studying and expanding the access of foreign investors to the bond trading channel of the exchange; Overall recommendation and comprehensive registration system reform; Thirdly, we should guide long-term funds to enter the market and promote the implementation of the public offering policy of individual pension investment as soon as possible; Qualified foreign enterprises and one belt, one road state enterprises will be listed on A shares. Actively support qualified tourism enterprises to carry out mergers and acquisitions. With regard to guiding long-term funds into the market, the CSRC highlighted three tasks: first, deepen the reform of the financing end of the capital market, second, improve the supply of equity funds and fund investment advisory products, and third, continue to expand medium and long-term capital sources.
Comments: the reply of the CSRC accommodates the financing side and investment side of the capital market reform, with rich coverage. It focuses on the four aspects of comprehensively implementing the registration system, preventing the risk of bond default, expanding opening to the outside world and guiding long-term funds into the market, which fully reminds the future policy direction
Core data tracking of the securities industry: the overall tightening of short-term liquidity and the decline of market trading activity month on month. In terms of business, the investment banking business has developed rapidly, slightly exceeding expectations, reflecting the accelerated pace of corporate IPO under the background of the comprehensive registration system reform, and the excess returns brought by investment banking and investment banking capitalization may be worthy of attention throughout the year. (1) Liquidity: on February 18, the 7-day inter-bank pledged repo rate was 2.1462%, up + 13.43bp from last Friday; The pledge repo rate of 7-day deposit institutions was 2.0910%, up + 11.18bp from last Friday. (2) Brokerage business: from February 14 to February 18, the average daily turnover of stocks in the two cities was 844.532 billion yuan, a month on month ratio of – 7.62%, accounting for 1.19% of the market value of stocks in circulation, a month on month ratio of – 10.07bp. (3) Credit business: Margin Trading: as of February 17, the balance of the two loans was 172.182 billion yuan, up + 0.42% from last weekend, accounting for 2.43% of the circulating market value of a shares; Stock pledge: as of February 11, the total market value of stock pledge inside and outside the market was 3801.974 billion yuan, up + 1.85% from the previous weekend. (4) Investment banking: from January 1 to February 18, the IPO underwriting amount was 123.822 billion yuan, accounting for 22.82% of the total completed last year; The amount of refinancing underwriting (convertible bonds and exchangeable bonds) was 153.265 billion yuan, accounting for 12.02% of the total completed last year; The bond underwriting amount of securities companies was 991.096 billion yuan, accounting for 8.99% of the total amount completed last year. (5) Asset management business: by the end of December 2021, the scale of private asset management of securities companies was 7.69 trillion yuan (excluding the scale of large aggregate products), up + 3.17% from the beginning of the year. By the end of September 2021, the scale of single asset management plan was 4.88 trillion yuan, down from – 17.51% at the end of the previous year; The scale of the collective asset management plan was 3.20 trillion yuan (including the scale of large collective products), up + 53.32% from the end of the previous year. (6) Investment business: from February 14 to February 18, the CSI 300 index reported 4651.24, up + 1.08% from last weekend, the Shanghai composite index reported 3490.76, up + 0.80% from last weekend, and the China Securities all bond (net price) index reported 103.72, up – 0.11% from last weekend. Core data tracking of HKEx: the first three weeks of February 22: the market value of Hong Kong recovered, and MSCI A-share derivatives performed well, with a maximum of 65000 in a single day. Specifically: 1) spot market: ADT was HK $121.4 billion, with a year-on-year increase of – 48% and a month on month increase of – 5.6%; South ADT + 14% month on month and – 44% year on year; North ADT was – 4.9% month on month and – 13% year on year; The overall stock market value of Hong Kong as of February 18 was HK $43.4 trillion, an increase of 2.6% over the end of December; 2) Derivatives market: 390000 futures advs, up – 16% year on year and – 19% month on month; There were 610000 adv options, with a year-on-year increase of – 33% and a month on month increase of – 7%; MSCI A50 sold 27100 copies, of which 65700 hit a new high on February 16.
\u3000\u30002. Investment view this week
The trademark of bonds with undervalued value + high dividend is still worthy of attention. Since February 14, 2022, disturbed by multiple emotional factors, the brokerage sector has been deeply adjusted, and the valuation of the sector has dropped to a low level. The overall Pb (LF) is about 1.6 times, which is in the 22% quantile of nearly 10 years. However, the annual performance of securities companies in 2021 continues to grow at a high level. As of February 18, 2022, a total of 10 listed securities companies have issued performance forecasts and 12 have issued performance express reports. Among them, the average revenue of 12 securities companies that have issued performance express in 2021 increased by 23% year-on-year, and the average net profit attributable to the parent increased by 63% year-on-year. The main performance increment comes from the decline in the scale of brokerage / asset management business and credit impairment. In 2022, the main variables that boost the overall valuation level of the securities industry come from two major policy bases: one is the steady growth of economic work since the end of last year, the wide credit and social finance data exceed expectations, so as to create a good trading environment for securities companies; the other is the comprehensive registration system, which plans to land within the year, so as to create a relatively loose regulatory environment for securities companies. From the perspective of looking for excess return stocks, we can pay attention to H shares of high dividend yield securities companies, or two main lines of institutional business and investment bank capitalization business.
In terms of short-term cost performance, it is suggested to focus on H shares of securities companies by comparing them in the dimension of dividend yield. According to the closing price on February 18, the average dividend rate of 41 A-share listed securities companies in recent 12 months is only 1.2%, while the average dividend rate of H shares of 14 securities companies is 3.9%. The top five securities companies’ H shares are Shenwan Hongyuan Group Co.Ltd(000166) (6.2%), China Galaxy Securities Co.Ltd(601881) (5.7%), Guotai Junan Securities Co.Ltd(601211) (5.6%), Orient Securities Company Limited(600958) (5.0%) and China Merchants Securities Co.Ltd(600999) (4.7%).
From the perspective of institutional business, the first is China International Capital Corporation Limited(601995) (A / h). The institutional businesses of securities companies mainly include seat leasing, custody, securities lending and derivatives. The industry concentration is higher than that of other businesses. Among them, the institutional business of China International Capital Corporation Limited(601995) accounts for more than 50% of its profits, which is much higher than that of other securities companies, followed by Huatai Securities Co.Ltd(601688) and Shenwan Hongyuan Group Co.Ltd(000166) , and the profit contribution of institutional business also accounts for more than 20% respectively. From the perspective of investment bank capitalization, Haitong Securities Company Limited(600837) , China International Capital Corporation Limited(601995) and Huatai Securities Co.Ltd(601688) investment bank capitalization profits account for a relatively high proportion. In terms of private equity investment, follow-up investment of science and innovation board and investment banking business, Haitong, CICC and Huatai Securities Co.Ltd(601688) investment banking capitalization business contributed a high proportion of profits in the first half of 2021, all exceeding 30%.
In terms of long-term logic, we are still firmly optimistic about the excess return of wealth management transformation under non-standard to standard. The key recommended targets are: China stock market news, Gf Securities Co.Ltd(000776) , Huatai Securities Co.Ltd(601688) , China Industrial Securities Co.Ltd(601377) , Hithink Royalflush Information Network Co.Ltd(300033) .
Insurance tracking
This week, the insurance sector was – 2.07%, outperforming the non bank sector and losing the Shanghai and Shenzhen 300 index. Since the new year, the long-term interest rate has stabilized, and the yield of 10-year Treasury bonds has risen to 2.80%. As the policy is faced with the relaxation of real estate financing restrictions and the bad situation in the real estate industry, the asset side equity investment performance of insurance enterprises will usher in marginal improvement.
Tracking the premium data of listed insurance companies in January: the growth rate of life insurance premiums is under pressure, and property insurance is expected to continue the recovery momentum. During this week, all listed insurance companies disclosed the premiums in January 2022, of which the life insurance premiums were – 0.73% year-on-year in January (the growth rate was + 8.24% in the same period last year). It is expected that the pressure of new single premiums of insurance enterprises is still on. Specifically, the monthly premium growth rate of Ping An / Guoshou / CPIC / Xinhua / PICC / Taiping was – 0.81% / – 5.34% / – 1.13% / + 3.58% / + 22.75% / – 5.03%. Xinhua and PICC were positive year-on-year. PICC’s new single and single payment business continued to promote the performance recovery, but the regular payment business still faced certain pressure. It is expected that the performance of the life insurance end in the first quarter will still be affected by the general delay of the “good start” of various companies, the high base in the same period and the slow recovery of insurance consumer demand. The impact of the comprehensive reform of property insurance and automobile insurance has gradually faded, and the monthly premiums of the “old three” have increased significantly since October. Specifically, the monthly premium growth of PICC / Ping An / CPIC / Taiping / Zhongan was 13.78% / 8.21% / 12.67% / – 5.21% / 12.37% respectively. The recovery of auto insurance growth and the accelerated expansion of non auto insurance will help the property insurance business continue its recovery trend. Looking forward to the new year, the advantages of leading insurance enterprises are expected to be further expanded. Zhongan’s monthly premium growth has changed from negative to positive for the first time since September last year, and the company’s development under the new Internet insurance regulations is expected to continue its strong momentum.
The margin of safety is sufficient, and the improvement of the market also needs to focus on the performance of new orders on the liability side of insurance enterprises. This week, A-Shares opened low and rose to usher in a rebound. The insurance sector received a continuous inflow of market funds, and the mood eased. Current P / EV Valuation: AIA 1.91x, Ping An 0.66X (A shares) / 0.68x (H shares), CPIC 0.51x (A shares) / 0.37x (H shares), Guoshou 0.71x (A shares) / 0.27x (H shares), Xinhua 0.46x (A shares) / 0.23x (H shares); The P / b of China Property Insurance in 2021 is 0.77x and that of Zhongan online is 2.32x. The valuation is still in a low range and the margin of safety is sufficient. We believe that the recent rebound of insurance stocks mainly benefits from the improvement of asset side margin brought by the wide credit policy. There is no obvious inflection point in the core fundamentals of the industry, but the cyclical factors and structural adjustment of the market will bring certain investment value to the insurance sector. At present, we recommend that the debt side grow brightly in the first half of the year, AIA, which has a stable growth in new business value and better agent quality than its peers, and China property insurance, which has improved the fundamentals of property insurance, continue to pay attention to Ping An Insurance (Group) Company Of China Ltd(601318) and China Pacific Insurance (Group) Co.Ltd(601601) in the transformation, and Internet insurance recommends Zhongan online with high growth.
Recommended stock pool
Traditional securities companies: Gf Securities Co.Ltd(000776) (A / h), China Industrial Securities Co.Ltd(601377) (a), Huatai Securities Co.Ltd(601688) (A / h), China International Capital Corporation Limited(601995) (A / h)
Internet Brokerage: China stock market news (a)
Traditional insurance: AIA (H), China Property Insurance (H)
Internet insurance: Zhong’an online (H)
Exchange: Hong Kong Stock Exchange (H)
Diversified Finance: Hithink Royalflush Information Network Co.Ltd(300033) (a), BOC aviation leasing (H)
Risk tips
The fermentation of overseas factors and the fluctuation of the equity market disturbed the valuation of the non bank sector.
