Wealth management contributes to the goal of common prosperity. Common prosperity is “inclusive”, mainly for mass customers. To continuously optimize the supply of financial products and services through the capital market and broaden residents’ property income is the key path to increase stock wealth and expand middle-income groups. China’s per capita GDP has exceeded US $10000, which will usher in the peak of the transformation of personal assets from physical assets to financial assets. In addition, China has the largest and most growing middle-income group in the world, and the wealth management business for mass customers may become a blue ocean field.
The institutionalization trend drives the institutional service business. By the end of the third quarter of 2021, the scale of public funds and private funds was 23.9 trillion yuan and 19.65 trillion yuan respectively, an increase of 20% and 16% respectively over the end of 2020, accounting for 36% and 30% of the total scale of asset management business. Securities companies and institutions carry out diversified cooperation, and asset management institutions provide financial products to securities companies, which is also an important source of securities lending; Securities companies provide research services, custody outsourcing services and settlement services to asset management institutions to realize income through multiple channels.
Industry review in 2021: the growth rate of the industry slowed down, the listed securities companies maintained high growth, and the head securities company roe took the lead. In the first three quarters of 2021, the operating revenue of the whole industry was 366.357 billion yuan, a year-on-year increase of + 7%, of which only the investment banking revenue decreased by 4% year-on-year; The net profit was 143.979 billion yuan, a year-on-year increase of 8.5%. The operating income of listed securities companies was + 22.6% year-on-year, the net profit attributable to the parent company was + 22.9% year-on-year, and the main business increased in an all-round way. The listed securities companies with the highest roe are China Securities Co.Ltd(601066) , China International Capital Corporation Limited(601995) , Guosen Securities Co.Ltd(002736) , Citic Securities Company Limited(600030) and China Industrial Securities Co.Ltd(601377) , accounting for 11.38%, 10.31%, 10.00%, 9.34% and 9.03% respectively.
Investment strategy:
It is estimated that the operating revenue in 2022 will be 520.16 billion yuan, a year-on-year increase of + 10.7%; The net profit was 202.862 billion yuan, a year-on-year increase of + 13.6%; The net profit margin is 39%.
Focusing on the business layout of asset light advantage is our main investment direction at the current time point. The deepening reform of the capital market supports macroeconomic transformation and serves the national strategic objectives. At the same time, the securities industry also fully benefits from the broad business opportunities contained in the real economy. At present, proprietary business is still the main performance driver of most securities companies, but its high beta, strong cycle and leverage attributes are also the main reasons for the differentiation and fluctuation of securities companies’ performance. The asset light business has relatively low risk and little capital restriction, which helps to smooth the performance fluctuation and is more favored by the market in terms of valuation.
The ceiling of wealth management business and institutional business is high, and the business space is broader. The customer business of securities companies mainly includes investment banking, wealth management and institutional business. Due to the different resource endowments of securities companies, their business layout shows some differences. On the whole, the head securities companies have first mover advantages, comprehensive layout, overall leadership and form unbalanced advantages. Small and medium-sized securities companies follow up, hold the basic market and create regional advantages or segmentation advantages. Investment banking business is more affected by regulatory policies and presents periodic changes. The rapid improvement of issuance efficiency will gradually lead to the stock competition of enterprise customers. In comparison, the ceiling of wealth management business and institutional business is higher and the business space is broader. At the current time point, we propose two main investment lines:
First, based on the vision of common prosperity, reaffirm the blue ocean field of wealth management business and pay attention to the securities companies that first release the Bureau in the big wealth management industrial chain. It is recommended to pay attention to securities companies with leading asset management and allocation capability and first-class platform service capability, including Citic Securities Company Limited(600030) , East Money Information Co.Ltd(300059) , Orient Securities Company Limited(600958) , China Industrial Securities Co.Ltd(601377) , etc.
Second, based on the deepening trend of investor institutionalization, select securities companies with strong institutional service capacity and high proportion of institutional business. The service capabilities of institutions are mainly reflected in investment research service capabilities, sales capabilities, trading capabilities, custody and settlement capabilities, etc. it is recommended to pay attention to Citic Securities Company Limited(600030) , Orient Securities Company Limited(600958) , China Industrial Securities Co.Ltd(601377) , China Merchants Securities Co.Ltd(600999) , etc.
Risk tips:
The secondary market fell sharply; The impact of the epidemic exceeded expectations; The implementation of the policy was not as expected
