Market performance:
In the current period (2021.12.20-2021.12.24), the non bank (Shenwan) index was – 1.73%, ranking 22 / 31 in the industry, and the brokerage II index was – 1.98%;
Shanghai Composite Index – 0.39%, Shenzhen Component Index – 1.06%, gem index – 4.00%.
The rise and fall of individual stocks ranked among the top five: China Galaxy Securities Co.Ltd(601881) (+ 2.96%), Soochow Securities Co.Ltd(601555) (+ 2.83%), The Pacific Securities Co.Ltd(601099) (+ 1.24%), Guotai Junan Securities Co.Ltd(601211) (+ 0.52%), Polaris Bay Group Co.Ltd(600155) (+ 0.41%);
Individual stocks ranked the top five in terms of rise and fall: Chinalin Securities Co.Ltd(002945) (- 15.37%), Orient Securities Company Limited(600958) (- 7.15%), Boc International (China) Co.Ltd(601696) (- 6.75%), China Greatwall Securities Co.Ltd(002939) (- 5.54%) and Zheshang Securities Co.Ltd(601878) (- 4.94%).
Core view
In terms of policy, this week, China Securities Association announced the evaluation results of corporate bond business practice ability of securities companies in 2021. A total of 90 companies participated in the rating, including 24 grade A, 48 grade B and 18 grade C This year is the second year for China Securities Association to carry out corporate bond business evaluation. In 2020, China’s total bond issuance reached 56.88 trillion yuan, a year-on-year increase of 25.89%. On the premise of last year’s high base, the bond issuance scale in 2021 once again reached a record high in recent five years. As of December 24, the issuance scale reached 61.04 trillion yuan, an increase of 7.31% over the end of last year. In combination with the rating results in recent two years and the underwriting scale of securities companies, it mainly presents the following characteristics:
First, the industry concentration increased, and the strength of some leading securities firms and investment banks was stable. In terms of underwriting scale, the market share of the underwriting scale of the top five securities companies has increased to varying degrees. The underwriting scale Cr5 has increased from 44.00% in 2020 to 48.82% in 2021, and the corporate bond Cr5 has also increased from 34.85% to 36.84%. Only four securities companies ranked in the bottom 25 of the total underwriting scale have increased their share. As of December 24, 2021, the top five securities companies in terms of underwriting scale of securities companies are Citic Securities Company Limited(600030) , China Securities Co.Ltd(601066) , Huatai Securities Co.Ltd(601688) , Guotai Junan Securities Co.Ltd(601211) , China International Capital Corporation Limited(601995) . These five companies also rank among the top five in terms of underwriting scale in 2020 and the top five in terms of corporate bond underwriting scale in 2021. They have won class a rating in both years, and their investment banking business strength is stable and outstanding. Among them, China Securities Co.Ltd(601066) and Citic Securities Company Limited(600030) corporate bond underwriting scale reached 382.973 billion and 329.907 billion respectively, far exceeding other securities companies, and the leading position is stable.
Second, some small and medium-sized securities companies realize differentiated competitive advantages. A total of 18 securities companies have obtained a for two consecutive years. In addition to the above-mentioned head securities companies, they also include China Industrial Securities Co.Ltd(601377) , Everbright Securities Company Limited(601788) , China Greatwall Securities Co.Ltd(002939) and other small and medium-sized securities companies. In addition, six securities companies, including Orient Securities Company Limited(600958) and open source securities, are new to the class a ranks, all of which are small and medium-sized securities companies. From the performance of underwriting scale, Soochow Securities Co.Ltd(601555) , China Industrial Securities Co.Ltd(601377) , Zheshang Securities Co.Ltd(601878) achieved business growth of more than 20%, and Orient Securities Company Limited(600958) achieved growth of 65.87%. In the corporate bond underwriting business, Zheshang Securities Co.Ltd(601878) , Everbright Securities Company Limited(601788) , Soochow Securities Co.Ltd(601555) , Caixin securities, etc., all achieved a scale growth of more than 30%, with a prominent performance. Some small and medium-sized securities companies have achieved differentiated competitive advantages in investment banking with the help of registration system reform.
Third, the ratings of some large-scale securities companies were downgraded. The ratings of some large securities companies such as Haitong Securities Company Limited(600837) , China Merchants Securities Co.Ltd(600999) were reduced from a to B. both of them were in the top ten in the industry in recent two years in terms of underwriting scale performance. On September 23, China Securities Association issued the revised Measures for the evaluation of corporate bond business practice ability of securities companies (for Trial Implementation). In addition to business ability, the rating indicators also make comprehensive evaluation from five aspects: personnel and system guarantee, compliance development, risk control effectiveness, market order maintenance and national strategy. Securities companies are the “gatekeeper” of the capital market , we need to comprehensively improve our strength in compliance, risk control and other fields.
Risk tips: strengthened supervision, policy risk, market fluctuation and repeated epidemic situation
