Securities: the short-term cold of fund issuance dragged down the market performance of the industry in February

The securities industry lost out in February. The securities sector fell 5.69%, ranking 31st among the 31 Shenwan industry indexes, outperforming the Shanghai Composite Index by 8.69 percentage points and the Shanghai and Shenzhen 300 index by 6.08 percentage points.

The valuation of listed securities companies decreased compared with January. As of February 28, the Pb valuation of listed securities companies was 1.40 times (historical TTM, median, excluding negative values, the same below), down 0.06 times from the end of January, and 1.46 times on January 28. On February 28, the valuation was in the last 3% of the history, and the median of historical Pb valuation was 2.57. The valuation of Pb of large securities companies is 1.33 times (5% quantile after History), and the valuation of Pb of small and medium-sized securities companies is 1.44 times (6% quantile after History).

Highlights of the industry: in February, the industry was affected by the cold of fund issuance, and the correction of wealth management related targets such as China stock market news, Gf Securities Co.Ltd(000776) etc. was large, which dragged down the market performance of the securities industry in February. However, we believe that the market overestimates the impact of the cold of the new development fund on the consignment performance of the securities industry, and the long-term trend of wealth management in the securities industry will be maintained. In the context of the growth of residents' demand for wealth management and the expansion of equity funds, the holding scale of fund consignment continues to improve and the basis for the growth of holding scale is still there. We believe that in the long run, the long-term growth trend of the holding scale of securities companies' fund consignment remains unchanged, and the logic of wealth management is still there. When the CSRC deployed its key tasks in 2022, it mentioned that stabilizing growth and preventing risks should be put in a prominent position. In combination with the requirements of inspection teams and institutional supervision meetings, the follow-up suggestions focused on the introduction of policies related to serving the real economy under the stable macroeconomic growth, as well as the progress of capital market reform with the full implementation of the stock issuance registration system as the main line.

Maintain the rating of "leading market" in the industry. On the main line of investment, we suggest paying attention to the three main lines of high-quality head securities companies and securities companies with prominent advantages in wealth management and leading investment banking business. Investment main line 1: focus on the head securities companies with stable operation, strong capital strength and obvious policy advantages. Recommend Citic Securities Company Limited(600030) ( Citic Securities Company Limited(600030) . SH) and pay attention to China International Capital Corporation Limited(601995) ( China International Capital Corporation Limited(601995) . SH). Investment mainline 2: focus on securities companies that comply with the transformation and development of wealth management. Recommend China stock market news ( East Money Information Co.Ltd(300059) . SZ), Huatai Securities Co.Ltd(601688) ( Huatai Securities Co.Ltd(601688) . SH), Orient Securities Company Limited(600958) ( Orient Securities Company Limited(600958) . SH). Investment main line 3: it is suggested to pay attention to China CITIC construction investment ( China Securities Co.Ltd(601066) . SH), which leads the investment banking business and ranks in the forefront of the new third board.

Risk warning: the market trading activity is low; The market fluctuates greatly; The business development of securities companies is not as expected; Strengthening financial supervision policies; The progress of capital market reform was lower than expected.

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