Key investment points:
Factors affecting the valuation of securities companies: the valuation level of securities companies has obvious correlation with their profitability. Macroeconomic environment, market environment, policies and other factors have an impact on the profitability of the industry. The business structure and business market competitiveness of listed securities companies will eventually be reflected in roe. This paper analyzes the business models and influencing factors of securities companies, and calculates the roe level of each business. The calculated roe of brokerage business, two financing business and self-supporting business is relatively low, with a general level of about 4% - 6%. In terms of heavy asset business, the profit is directly proportional to the leverage ratio. At present, the leverage level of the industry is about 3-4 times, and the roe volatility of heavy asset business of securities companies is narrowed and at a low level. Investment banking business and asset management business can better reflect the differentiated development of securities companies, and the roe level is also high and flexible. The roe of these two businesses is generally about 15% - 17%.
Valuation analysis given by the market to securities companies and comparison of American experience: from the current distribution of stock valuation in the securities industry, the valuation is closely related to the roe level of each company. Companies with high valuation given by the market, such as China stock market news, Chinalin Securities Co.Ltd(002945) , China Securities Co.Ltd(601066) etc., have high roe level or high growth in the future. In addition, through the analysis of several stages of valuation improvement in history, we verify the factors affecting the valuation of securities companies that we should pay attention to.
From the experience of American investment banks, when roe is in the range of 15% - 20%, if asset quality is not considered, the Pb valuation level is about 2-2.5 times. From the perspective of Goldman Sachs Group, JPMorgan Chase and Jiaxin wealth management, with the increasing proportion of wealth management business, the valuation center is rising. After the 2008 financial crisis, due to the reduction of leverage, the roe center of Goldman Sachs Group fell to about 10%, and the Pb valuation given by the market also fell to 0.8-1.2 times accordingly.
Valuation and investment suggestions for securities companies: the roe level of securities companies in large investment banks is expected to reach 10-12% in the future, while the roe of securities companies is expected to maintain about 20% after the successful transformation of wealth management. We believe that the overall valuation of securities companies is expected to be increased to 1.5-1.7 times. According to the space for valuation improvement and the expected future performance, we downgrade the rating of the securities industry to "synchronous market". In terms of the way to improve roe in the industry in the future, ficc, OTC derivatives trading business and wealth management related business are the main directions. On the main line of investment, we suggest paying attention to the securities companies with great development potential of derivatives business and ficc business, as well as the advantages of wealth management related businesses, highlighting the two main lines of securities companies.
Risk warning: macroeconomic downturn and interest rate fluctuation risk; The risk of sluggish market trading activity; Risk of large fluctuations in the secondary market; Credit default risk; The progress of capital market reform is lower than expected; Risk of stricter industry supervision; Industry competition intensifies risks.
