Investment suggestions:
Last week, affected by the situation in Russia and Ukraine, the global stock market fell sharply, and A-Shares were no exception. The industry indexes closed negative, and the securities industry fell 5.41%.
From a fundamental point of view, in 2021, the operating revenue of the whole industry increased by 12.03% year-on-year, the net profit increased by 21.32% year-on-year, and the performance express of listed securities companies disclosed also improved year-on-year. Asset light business has become the starting point. Steady progress was made in the transformation of wealth management. The interest of financial products sold on a commission basis and two financial services increased significantly, 54% and 30% respectively. The registration system continues to expand and investment banking enjoys dividends. Heavy asset business promotes the expansion of securities companies. OTC derivatives developed rapidly, and the nominal principal increased by more than 60% year-on-year.
From the perspective of policy, the government work report of the two sessions reiterated the full implementation of the stock issuance and registration system to promote the stable and healthy development of the capital market. The proposals of the two sessions have also repeatedly mentioned the reform of the Beijing stock exchange, the science and innovation board and the gem. The CSRC has also made promoting comprehensive registration and production a top priority in its work this year. From the perspective of liquidity, the financial statistics and social finance data in February were lower than those in the same period last year, lower than market expectations, and the steady growth policy is expected to be further strengthened.
From the perspective of valuation, the valuation of Pb in the securities industry is 1.44 times, which is in the low quantile in the past decade.
The fundamentals and policies of the industry are good, the valuation is at a historical low, and the industry is rated as “optimistic”.
Industry data:
(1) wealth management
Secondary market performance: as of March 13, the stock index closed lower than most at the beginning of the year. The gem index closed down 19.78%, the CSI 500 closed down 12.03%, the CSI 300 index closed down 12.83%, and the SSE 50 closed down 10.34%.
New investors: in February 2022, 1.4146 million new investors were added, with a month on month increase of + 3% and a year-on-year increase of + 6.82%; By the end of February, the number of investors was 200 million, a year-on-year increase of + 10.29%.
Transaction volume: since 2022, the daily transaction volume has remained at the level of trillion yuan. Last week, the turnover was 5.43 trillion yuan, with an average daily turnover of 1.09 trillion yuan, a month on month increase of + 12.25%. Two financial services: as of March 11, the balance of two financial services was 1.71 trillion yuan, down from – 7.33% at the end of the previous year. The balance of securities lending at the end of the year was -939.9 trillion yuan, up from -6.9 trillion yuan at the end of the previous year, with a balance of -1.6% compared with that at the end of the year.
Stock pledge business: the number and proportion of Pledged Shares in the market fell month on month. As of March 11, the number of Pledged Shares in the market was 416418 billion shares, down – 0.81% from the end of the previous year, accounting for 5.59% of the total share capital, down 0.08 percentage points from the end of the previous year.
(2) investment bank
According to the statistics of the listing date, the total scale of equity financing last week was 20.813 billion yuan, a month on month increase of + 0.35%. Among them, the IPO raised 8.525 billion yuan and the additional issuance raised 10.653 billion yuan.
(3) investment
Bond market performance: as of March 13, China bond – total price (total value) index closed down 0.29% compared with last week. Commodities: as of February 25, the commodity index closed at 195.02, up 7.95% from the beginning of the year.
Revenue voucher business: in January 2022, securities companies issued 3642 revenue vouchers in total, with a new issuance scale of 109465 billion yuan. Among them, 841 revenue vouchers were issued through the quotation system, with an issuance scale of 40.09 billion yuan; 2801 revenue vouchers were issued through the counter market, with an issuance scale of 69.375 billion yuan. As of the end of the period, the existing scale was 445438 billion yuan.
OTC derivatives business: in January 2022, securities companies carried out OTC financial derivatives transactions, adding an initial nominal principal of 612449 billion yuan; By the end of the period, the total outstanding initial nominal principal of OTC financial derivatives was 2075678 billion yuan. The nominal principal of swap business increased by 329355 billion yuan, a month on month increase of – 24.98%; The new nominal principal of option business was 283094 billion yuan, a month on month increase of – 19.60%.
Risk tips:
The situation in Russia and Ukraine continues to deteriorate;
The secondary market fell sharply;
The epidemic situation exceeded expectations;
The capital market reform was not as expected.
