In 2021, the securities industry will usher in a bright moment, with the asset scale reaching a new high of 10 trillion and the number of employees returning to 340000.
this year, we adhered to the opening to the outside world, the birth of the Beijing stock exchange, the pilot expansion of fund investment advisers, welcomed the comprehensive registration system, and continuously optimized the policy environment for the development of securities companies.
This year, with the change of residents’ asset allocation structure, the demand for equity asset allocation increased, the era of great development of equity market came, and the growth space of wealth management business of securities companies opened.
As an industry observer and witness, the Chinese reporter of the securities firm hereby makes an inventory of the securities industry in 2021, summarizes and looks back with ten key words, and records the securities industry moving towards the comprehensive registration system and the reconstruction of wealth management.
asset scale exceeds 10 trillion
in the third quarter of 2021, the asset scale of the securities industry successfully exceeded the 10 trillion mark, the prosperity continued to rise, and the performance of the securities industry maintained growth.
According to the data of securities companies in the first three quarters of 2021 released by China Securities Association, by the end of September 2021, the total asset scale of securities companies had reached a new high, reaching 10.31 trillion yuan, an increase of 15.84% compared with the end of the previous year; The scale of net assets reached 2.49 trillion yuan, an increase of 7.79% over the end of the previous year; The net capital reached 1.94 trillion yuan, an increase of 6.59% over the end of the previous year.
The fundamentals of the securities industry continued to improve and its profitability improved. In the first three quarters of 2021, 140 securities companies achieved a revenue of 366.357 billion yuan, a year-on-year increase of 7%; The net profit was 143.979 billion yuan, a year-on-year increase of 8.51%.
in terms of business, the third quarterly report of listed securities companies shows that due to the active trading in the A-share market in 2021, proprietary investment business and wealth management business are the main growth engines of securities companies’ performance.
the number of employees returned to 340000
After combing the data, the Chinese reporter of securities companies found that as of December 30, 2021, there were 341500 securities practitioners, an increase of about 9000 over the beginning of the year, which is also the gateway for 340000 people after 2018.
Under the appearance of the overall stability of the number of people in the securities industry in recent years, the change of personnel structure reflects the change of the ecology of the securities industry. In terms of business, in 2021, with the deepening of wealth management transformation, the number of investment advisers in the securities industry has exceeded that of securities brokers, and the trend of this change is still accelerating.
in recent years, with the continuous deepening of capital market reform and the gradual implementation of reform measures such as the science and innovation board, the gem registration system and the Beijing stock exchange, investment banking has ushered in great development opportunities, the number of insurance agents of various securities companies has also increased, and the number of recommendation representatives has increased by nearly 1000 during the year.
brokerage M & a reappearance
Since 2021, there have been news of mergers and acquisitions and equity transfer of securities companies, and finally bear fruit by the end of the year – the equity of new era securities has officially changed ownership.
In recent years, the regulators have encouraged securities companies to take market-oriented M & A and other measures to become bigger and stronger. There have been China International Capital Corporation Limited(601995) M & A of CIC securities, Citic Securities Company Limited(600030) M & A of Guangzhou securities, Tianfeng Securities Co.Ltd(601162) integration of Hengtai securities and other actions.
In 2021, the tide of M & A in the securities industry will rise again. According to the statistics of Chinese journalists of securities companies, since 2021, there have been rumors of equity transfer or M & A among 8 securities companies, including new era securities, Kyushu securities, Jinyuan securities, Yintai securities, Wangxin securities, Huarong securities, Sinolink Securities Co.Ltd(600109) and Founder Securities Co.Ltd(601901) .
On December 14, 2021, China Chengtong signed the property right transaction contract with relevant parties of new era securities, and obtained 98.24% equity of new era securities at the listing reserve price of RMB 13.135 billion, ending the great drama of securities M & A in 2021.
Specifically, new era securities was taken over by China Securities Regulatory Commission in July 2020 due to “concealing the relationship between shareholders and unbalanced corporate governance”. It was listed and transferred in Beijing property exchange in September 2021.
After the news came out, Western Securities Co.Ltd(002673) and Dongxing Securities Corporation Limited(601198) launched a “chase” for the equity of securities in the new era. Subsequently, they announced to withdraw from the bidding for various reasons, and said they would continue to pay attention to the acquisition opportunities in the industry and seize the opportunities to become bigger and stronger in due time.
opening to the outside world
with the opening of A-share market and the integration of international system, the pace of foreign capital distribution in China’s capital market has accelerated. At present, the number of foreign holding securities companies has increased to 9, and 21 foreign background securities companies are queuing up to apply for establishment.
In August 2021, the CSRC approved JPMorgan International Finance Co., Ltd. to acquire the equity held by five domestic shareholders. It is China’s first securities company wholly controlled by foreign capital and spends JPMorgan securities (China).
It is worth mentioning that the Sino foreign joint venture securities firm Credit Suisse Founder Securities Co.Ltd(601901) was renamed Credit Suisse Securities in July 2021 after the foreign shareholder Credit Suisse Group obtained the controlling stake of the securities firm, and the management of Credit Suisse Securities disclosed that its future goal is to become a wholly foreign-owned securities firm.
Insiders believe that foreign securities companies have advantages in asset management, institutional services and global asset allocation. Under the new pattern of comprehensive opening up, more foreign institutions will pour into China’s capital market in the future.
first rating of cultural construction
in 2021, the cultural construction of the securities industry made rapid progress and ushered in new institutionalized progress.
In February 2021, China Securities Association issued the ten elements of cultural construction of the securities industry, which aims to promote the formation of a securities industry culture of “compliance, integrity, professionalism and stability”, provide value guidance and institutional basis for the long-term stable and healthy development of the capital market, and promote the high-quality development of the securities industry.
In July 2021, the evaluation results of cultural construction practice of securities companies were released for the first time, and 12 securities companies broke into class A, including Nanjing Securities Co.Ltd(601990) , Orient Securities Company Limited(600958) , Guotai Junan Securities Co.Ltd(601211) , Citic Securities Company Limited(600030) , Huatai Securities Co.Ltd(601688) , Gf Securities Co.Ltd(000776) .
On December 29, 2021, the Chinese reporter of securities companies learned that the China Securities Association recently issued the measures for the evaluation of cultural construction practice of securities companies (Trial) (Draft for comments) to all securities companies. The evaluation results of cultural construction practice are directly linked to the classified rating of securities companies.
fund investment advisers become a breakthrough in wealth management
As the commission rate of securities companies decreased and the contribution of channel brokerage business to revenue weakened, securities companies have accelerated the transformation of wealth management.
At the same time, with the breaking of rigid cashing and the continuous policy of “no speculation in housing and housing”, residents’ wealth has turned to equity, and the market demand has increased greatly. The wealth management track is wide and long, which has gradually become a new field for agencies such as securities companies and public offerings.
in 2021, the wealth management transformation of securities companies has to be mentioned, and the fund investment consulting business plays the role of wealth management pilot field.
Up to now, a total of 29 securities companies in the first two batches have obtained the pilot qualification of fund investment adviser, and the pilot securities companies have acted quickly. Most securities companies have quickly completed the online exhibition of fund products within half a year after obtaining the qualification. At present, the number of securities companies officially launched by fund investment adviser has been expanded to 12. Take Citic Securities Company Limited(600030) as an example, as of December 29, the business had been online for only 60 days, the contracted assets had exceeded 7 billion yuan, and the number of contracted customers was nearly 90000.
Insiders believe that various securities companies have created a differentiated investment advisory model, and the fund investment advisory business has achieved a breakthrough of “from 0 to 1”. It is expected that in the future, securities companies will take fund investment advisers as the “starting point”, from the seller investment advisers mainly selling financial products on a commission basis to the buyer investment advisers Era of account management, which will reshape the wealth management industry.
fully registered investment banking
when planning the economic work in 2022, the central economic work conference held in December 2021 mentioned the need to fully implement the stock issuance registration system, which attracted great attention from the outside world. A month ago, the Beijing stock exchange officially opened the market.
This means that with the launch of the science and innovation board, the pilot of the gem registration system and the official opening of the Beijing stock exchange, China has basically formed a multi-level capital market system of “main board + gem + science and innovation board + Beijing stock exchange + regional equity market + private equity”.
It can be said that whether the opening of the Beijing stock exchange or the acceleration of the comprehensive registration system, the investment banking business of securities companies will significantly benefit from the institutional dividend release.
According to the data of , 523 A-share listed companies raised a total of 543.6 billion yuan through IPO in 2021, with a year-on-year increase of 20% and 13% respectively, reaching a record high.
In the first three quarters of 2021, the securities industry realized an investment banking revenue of 46.312 billion yuan, a year-on-year decrease of 3.96%; Revenue accounted for 12.64%, a year-on-year decrease of 1.44 percentage points. Under the system dividend, the growth of investment banking business of securities companies can be expected in the future.
asset management scale stabilized and rebounded
Affected by the new asset management regulations of “de channel, de leverage and de just exchange”, the asset management scale of securities companies experienced severe challenges after reaching the peak of RMB 18.77 trillion in the first quarter of 2017. Through arduous efforts, the asset management scale of securities companies showed a trend of stabilization and recovery.
At the end of the third quarter of 2021, the asset management scale of securities companies reached 8.64 trillion yuan, an increase of 1.06% over the beginning of the year. In the first three quarters of 2021, the securities industry realized an asset management business revenue of 21.962 billion yuan, a year-on-year increase of 3.28%; Revenue accounted for 5.99%, down 0.22 percentage points year-on-year.
2021 is also the last year of the new asset management regulations, and the net worth transformation of the asset management industry has entered the final stage. In order to cope with the transformation, many securities dealers have strengthened the transformation of public offering and gradually emerged in the asset management industry. With the deepening of active transformation, the asset management scale of securities companies is expected to continue to rise.
increase the layout of derivatives
Looking back on the performance of securities companies since 2021, the contribution of proprietary business ranks first. At the same time, according to the observation of listed securities companies, many leading securities companies have increased the proportion of innovative businesses such as derivatives in their investment business.
In the first three quarters of 2021, the securities industry realized a self operated business income of 106.404 billion yuan, a year-on-year increase of 4.97%. Proprietary business accounted for 29.04% of the industry’s revenue, a year-on-year decrease of 0.56 percentage points, and its contribution ranked first among all business lines.
it is worth mentioning that some leading securities companies took the lead in obtaining OTC option exchange and other licenses, with strong ability of service institutions and obvious advantages in the OTC derivatives market.
For example, by the end of the third quarter of 2021, the derivative financial assets of Citic Securities Company Limited(600030) , China International Capital Corporation Limited(601995) and Huatai Securities Co.Ltd(601688) had increased significantly, and the scale was ahead of the industry. The derivative financial assets of the three companies accounted for 76% of the listed securities companies.
Galaxy Securities pointed out that since the second half of 2021, the scale of derivatives business outside the securities mall has expanded rapidly. The OTC derivatives business operated by securities companies mainly includes OTC options and income swaps. By the end of September 2021, the nominal principal of OTC derivatives had reached 1897.06 billion yuan, a year-on-year increase of 50.86%.
market differentiation and undervaluation of securities companies
Since 2021, the trading of A-share market has been continuously active, and the average daily trillion transactions have become the “new normal”. Under the good market environment, the performance of most bond businesses has increased.
According to the data, in the first three quarters of 2021, 140 securities companies achieved a revenue of 366.357 billion yuan, a year-on-year increase of 7%; The net profit was 143.979 billion yuan, a year-on-year increase of 8.51%. A total of 124 securities companies in the industry achieved profits, accounting for about 88.6%.
Compared with the amazing performance, the overall performance of the secondary market of brokerage stocks in 2021 formed a huge contrast. As of December 29, 2021, the brokerage sector had decreased by 6.62% compared with the beginning of the year.
In terms of individual stocks, excluding the secondary new shares Caida Securities Co.Ltd(600906) , only Gf Securities Co.Ltd(000776) , East Money Information Co.Ltd(300059) , Orient Securities Company Limited(600958) , China Industrial Securities Co.Ltd(601377) , Guotai Junan Securities Co.Ltd(601211) , Huatai Securities Co.Ltd(601688) and China Greatwall Securities Co.Ltd(002939) have achieved positive returns since the beginning of 2021. In particular, brokers Gf Securities Co.Ltd(000776) , East Money Information Co.Ltd(300059) , Orient Securities Company Limited(600958) with good performance in wealth management business have stepped out of the independent market, with an increase of more than 20% since the beginning of 2021. Gf Securities Co.Ltd(000776) Chen Fu, chief analyst of Non Bank of China, believes that in recent years, focusing on the financing side reform and investment side reform, the deepening reform of the capital market has been continuously promoted. He has successively experienced a series of reforms, such as the establishment of the science and innovation board, the reform of the gem, the establishment of the Beijing stock exchange, the expansion of institutional investors and high-level opening to the outside world. The road of high-quality development of the securities industry has been continuously clear.
however, in terms of valuation level, whether PE method or Pb method, the current securities industry is in a position and does not really reflect the profound changes in the industry. As the light capital business in the securities industry moves from cyclical to growth, both the valuation level and the of the valuation system are expected to be reshaped.
(brokerage China)
