Average daily trading volume of A-Shares this week: the average daily trading volume of A-Shares this week was 1085651 billion yuan, an increase of 12.25% month on month. As of March 10, 2022, the balance of the two cities and two financial institutions was 1712314 billion yuan, a month on month decrease of 1.04%, and a decrease of 3.17% compared with the daily average level in 2021 (1768449 billion yuan).
This week, the CSI 300 index fell 4.22%, and the CSI all bond (net price) index fell 0.08%. As of March 11, 2022, the number of market pledged shares was 416651 billion, accounting for 5.6% of the total share capital, and the market value of market pledged shares was 3836629 billion yuan.
The two sessions triggered the expectation of a comprehensive registration system, and venture capital and securities companies performed well
This week, the non bank financial CITIC index fell 5.54%, 1.32 percentage points lower than the CSI 300 index, which fell 4.22%. Among them, the securities sector fell 5.40%, and the insurance sector fell 5.98%. Non bank stocks with relatively good performance are distributed in small and medium-sized securities companies and venture capital, with Chinalin Securities Co.Ltd(002945) (14.32%), Caida Securities Co.Ltd(600906) (5.75%) and Luxin Venture Capital Group Co.Ltd(600783) (4.02%) rising ahead.
In December, the central economic work conference again proposed the comprehensive registration system, and the relevant regulations on stock issuance will also be included in the legislative work plan of the CSRC in 2022. We expect that the IPO process in 2022 will be the same as that in 2021, with about 40 IPOs per month. This provides a stable and smooth exit channel for PE fund, which is beneficial to the venture capital industry and emerging start-ups. The beneficiaries are Jiangsu Huaxicun Co.Ltd(000936) (one village capital, focusing on semiconductors, media and new consumption) and Sichuan Shuangma Cement Co.Ltd(000935) (core members of IDG Beijing). The comprehensive registration system will also bring the needs of updating and upgrading the trading integration system of securities companies, exchanges, fund companies and other investment institutions and the information disclosure system of listed companies. Financial technology represented by Hundsun Technologies Inc(600570) , Shenzhen Fortune Trend Technology Co.Ltd(688318) , vertex shares will benefit.
Considering the quality of enterprises to be listed and the law of enterprise development, the comprehensive registration system is not expected to bring a blowout of IPO. Therefore, the growth rate of investment banking business of securities companies will remain at a relatively stable level, with no obvious thickening in terms of revenue and net profit contribution. The beneficiaries are Tianfeng, Guojin, Hualin and CICC, which have a high proportion of investment banking revenue contribution.
When the main line of wealth management encounters twists and turns, it does not change the uncertainty of growth
Because the new development fund has been cold since the beginning of the year, the capital has reduced the valuation of the main subject of wealth management. However, recently, a large proportion of bank financial products have “broken 1” in net value, and residents’ experience of “breaking rigid exchange” in investment is further. The butterfly effect caused by “financial loss” may guide the flow of funds to equity assets or real estate. From the perspective of fund ownership, trailing Commission and sales service fee will become the fluctuation stabilizer of wealth management sales.
The overall price to book ratio of securities companies is 1.42 times, lower than the average level in 2020 and 2021. At the same time, the roe level of securities companies has increased steadily. The mismatch between sector valuation and performance growth brings left configuration opportunities. The brokerage sector is arranged around the main line of wealth management – China stock market news with the best growth at the sales end; Guangfa and Xingye with high “base content” at the product end; Actively improve the business capability of Zheguo private fund providers and private equity institutions; China Thailand and Xiangcai Co.Ltd(600095) will benefit from the increase in the proportion of residents’ equity asset allocation.
One belt, one road, the other two sides, the whole system of stock issuance, the international trading system reform and the mature trading system, and the comprehensive account optimization of securities companies.
The brokerage sector has a strong beta attribute, so the liquidity, transaction activity and market sentiment of A-Shares will be magnified on the market of the sector. We expect that the next 2-3 quarters may be in the stage of wide liquidity to wide credit. For investors who pay attention to the layout signal on the right side of the securities business sector, they can pay attention to 1) the transaction volume of Shanghai and Shenzhen stock markets has been enlarged to more than 1.4 trillion yuan, 2) the daily transaction volume of the securities business sector (801193. SI) has been enlarged to 100 billion yuan, and 3) the securities lending scale of listed securities companies has shrunk rapidly.
The insurance sector is in the three-phase superposition of institutional low allocation + oversold + asset side marginal improvement of the real estate industry, showing an oversold rebound. In particular, the preference for undervaluation since the beginning of 2022 has brought potential capital inflows to the insurance sector on the one hand, and the equity position of insurance asset management in relevant sectors on the other hand is expected to achieve good returns. Due to the difficult recovery of insurance policies on the liability side and the limited size and quality of the agent team, the improvement of residents’ income is still one of the important factors determining the inflection point of insurance liabilities. Therefore, when the good and bad on the liability side and asset side affect hedging, the winning rate of insurance is not an advantage. However, the sector fell by 40% from the high level, with little downward space. Only a few positive factors are needed to promote the market upward, and the odds are excellent. In the process of valuation repair and oversold rebound of the insurance sector, the beneficiaries are the weight China Life Insurance Company Limited(601628) , which has an excellent pulling effect on the key index, and Ping An Insurance (Group) Company Of China Ltd(601318) , which has a relatively good debt side.
Risk tips
The risk of sharp fluctuation of RMB against the US dollar, overseas epidemic and liquidity impact; China’s liquidity easing process is less than expected; A-share transaction activity decreased, compliance risk of listed companies and shareholder qualification risk of securities companies, attention to shareholder reduction information, lower than expected growth rate of new policy premiums in the insurance industry, and higher than expected fluctuation risk of interest rates
