The performance and valuation of the securities sector continue to deviate from the performance of the securities industry, and the boom continues upward. From 2018 to 2021, the average annual compound growth rate of the industry's net profit reached 42%, and continued to grow by 21% on the high base in 2021. However, the share price performance of the sector as a whole was weak. Since the beginning of the year, affected by multiple factors such as the expectation of the Federal Reserve to raise interest rates and shrink the table, the repeated epidemic in China, the escalation of the conflict between Russia and Ukraine, the intensification of geopolitical risks, and the inflation expectation caused by the rise of commodity prices, the risk aversion in the capital market has increased, the trading volume has shrunk, and the securities sector fell 10.64%, 3.38 percentage points lower than the Shanghai and Shenzhen 300 index. Plate PB1 43x, the valuation is low, and the performance continues to deviate from the valuation.
In the new development stage, the wealth management industry chain has broad development space. At present, China's economy has shifted to a high-quality development stage. China's GDP has exceeded 100 trillion yuan, and the per capita GDP has exceeded US $1 trillion. Residents' wealth has accumulated rapidly, the scale of investable assets has increased rapidly, and the asset allocation has accelerated the transformation from physical assets to financial assets. With the positioning of the policy of "housing, housing and non speculation", the breaking of the rigid exchange of bank financial management, the acceleration of net worth transformation and the decline of interest rates, the increasing proportion of residents' equity asset allocation is a general trend, which brings growth space to the wealth management market. At the same time, the expansion of wealth management institutions, the continuous enrichment of products and the creation of more financial products to meet the needs of family wealth management in the market also contribute to the development and growth of the wealth management market. Big wealth management business is a medium - and long-term high-quality track for securities companies, and the business space of selling financial products on a commission basis, participating in and holding public funds, asset management and other businesses in the industrial chain is expanded.
The ecological reconstruction of the capital market, the opening of the curtain of institutionalization, the optimization of the investor structure of the capital market, the increase of the scale and proportion of professional institutional investors, and the trend of institutionalization. According to the data released by Shanghai Stock Exchange, from 2010 to 2020, the value of the stock market held by all natural persons increased from 3.27 trillion yuan to 8.7 trillion yuan, with an average annual compound growth rate of 10.28%, accounting for a decrease of 0.2 percentage points; The market value of shares held by professional institutional investors increased from 2.25 trillion yuan to 6.74 trillion yuan, with an average annual compound growth rate of 11.62%, accounting for an increase of 1.89 percentage points. With the continuous entry of overseas funds, social security funds, pensions, enterprise annuities, bank financial management and insurance funds into the market and the additional allocation of equity assets to residents' savings funds, the institutionalization trend of investors in China's capital market will be further accelerated.
The institutional business has broad growth space and has become an important driving force for securities companies. The ecological transformation of the capital market and the emergence of the institutionalization trend provide opportunities for the development of the institutional business of securities companies. The business needs of institutional brokerage, sales, custody outsourcing, trading, risk prevention and control related to institutional customers have increased. The continuous release of policy dividends provides a favorable environment for securities companies to carry out institutional trading services. At the same time, the change of market investors, the development and growth of institutional investors, the improvement of market volatility, the growth of customer hedging, risk hedging and diversification strategy construction demand promote the development of institutional trading services. Head securities companies have benefited deeply by virtue of business qualification, capital strength, customer resources and risk control ability. The development of trusteeship outsourcing business is accelerated, attracting customers, and driving the development of a number of front office businesses. Securities lending business is an important part of institutional customer service. Securities companies speed up the construction of securities lending platform and promote business development.
It is suggested that China's economy should shift to a high-quality development stage. China's GDP has exceeded 100 trillion yuan, and the per capita GDP has exceeded US $1 trillion. Residents' wealth has accumulated rapidly, the scale of investable assets has increased rapidly, the transformation of asset allocation from physical assets to financial assets has been accelerated, and the demand for equity asset allocation has increased. Supervision guides institutional investors to enter the market, optimizes the investor structure, improves the scale and proportion of professional institutional investors, and shows the trend of institutionalization. Deepening the service of institutional investors is the focus of securities companies to build their core competitiveness. Under the environment of capital market ecological transformation, the advantageous securities companies in the fields of wealth management and institutional business will have core competitiveness. Wealth management and institutional business are the medium and long-term high-quality track of securities companies. Comprehensively considering the business environment of the securities industry, under the pessimistic, neutral and optimistic assumptions, we calculate that the year-on-year growth rate of net profit of the securities industry in 2022 is - 3.29% / 9.76% / 20.44% respectively. The current sector is 1.43xpb, below the 10% quantile since 2010, with low valuation and maintaining the "recommended" rating. In terms of individual stocks, China stock market news ( East Money Information Co.Ltd(300059) . SZ), Orient Securities Company Limited(600958) ( Orient Securities Company Limited(600958) . SH), China International Capital Corporation Limited(601995) ( China International Capital Corporation Limited(601995) . SH) and Huatai Securities Co.Ltd(601688) ( Huatai Securities Co.Ltd(601688) . SH) with obvious advantages in wealth management and institutional business are recommended.
Risk warning: the risk of tightening regulatory policies; Risk that the performance is greatly affected by market fluctuations.
