Six characteristics of the performance of the securities industry in 2021:
1. Overall performance of listed securities companies: revenue increased by 23.3% and net profit attributable to the parent company increased by 30.2% (as of April 10, 27 listed securities companies have disclosed their annual report), which is faster than the average of the whole industry (revenue increased by 12% and net profit increased by 21%).
2. Profitability and operating leverage. The weighted roe was 9.52%, increased by 1.27pct compared with last year, and the operating leverage (excluding customer funds) was 4.11, increased by 0.18 compared with last year.
3. From the perspective of operating leverage splitting, it is mainly investment plus leverage. The credit leverage was 0.88, down 0.05, and the investment leverage was 2.34, up 0.17.
4. In terms of revenue growth by business, brokerage and asset management grew faster. The growth rates of brokerage, investment banking, asset management, interest and investment income were 21.3%, 7.5%, 30.1%, 14.7% and 13.6% respectively.
5. The impairment loss was significantly reduced, driving the improvement of profit margin. The credit impairment loss was 10.406 billion yuan, a year-on-year decrease of 63.7%. After the significant provision of impairment losses such as share pledge in 2020, it decreased significantly in 2021. Taking CITIC as an example, only 899 million yuan was accrued in 2021, a year-on-year decrease of 86.3%.
6. Increase in staff and per capita income. The number of listed securities companies increased by 12.1%, while CITIC, Huatai, CICC and China Merchants increased by 24.6%, 36.7%, 44.7% and 30.1% respectively; Per capita salary increased by 6.5% year-on-year, and per capita income increased by 10.0% year-on-year.
Business segments of listed securities companies in 2021:
Brokerage business: the income from wealth consignment and institutional brokerage grew significantly faster. 1. Brokerage business environment. Stock based turnover increased by 25.3% year-on-year, the net commission rate of the industry decreased by 2bp to 2.4 million, and the growth rate of wealth consignment and institutional brokerage income was significantly faster, 65.5% and 45.0% respectively. 3. Behind the differentiated development of wealth management, including the differentiation of customers, products and services, is the difference of genetic endowment, which leads to the difference of strategic choice.
Investment banking: the underwriting scale of stocks and bonds continued to grow. 1. Investment banking environment. The scale of equity financing totaled 1817784 billion yuan, a year-on-year increase of 8.3%; The total scale of bond issuance underwritten by securities companies was 10.99 trillion yuan, a year-on-year increase of 10.6%. 2. The head advantage was stable, with CITIC and CICC ranking the top two. The income of investment banks was 8.156 billion yuan and 7.036 billion yuan respectively, with a year-on-year increase of 18.5% and 18.1%; Among the top 10 securities companies, Huatai, China Merchants and Shenwan also grew rapidly.
Asset management business: stabilize the scale and optimize the structure. 1. Information management business environment. The total asset management scale of securities companies was 8.23 trillion yuan, with a year-on-year decrease of – 3.7%; Collective asset management increased significantly (3.64 trillion yuan, 74.5% year-on-year), and directional asset management continued to shrink (4.03 trillion yuan, 31.8% year-on-year). 2. Income: the contribution of consolidated fund income has increased significantly. The asset management income of securities companies was 26.11 billion yuan, a year-on-year increase of 17.1%, and the fund management income was 29.09 billion yuan, a year-on-year increase of 43%. 3. The profit contribution of asset management and fund companies increased. The top five contributors are Dongfang, Xingye, Guangfa, China Merchants and Huatai (49%, 40%, 23%, 20% and 18%).
The growth of self operated business is mainly contributed by the increase of self operated investment scale. 1. Investment business environment. The stock market index is divided, and the bond market is stable. 2. The scale was improved and the yield was flat. The self operated income of listed securities companies was 139.63 billion yuan, a year-on-year increase of 12.7%; The scale of self operated assets totaled 4250677 billion yuan, a year-on-year increase of 21.4%; It is estimated that the total self operated rate of return is 3.6%, basically the same as last year. 3. The OTC derivatives market has maintained rapid development. The new nominal principal continued to increase (RMB 791149 billion in December 2021, a year-on-year increase of 43.9%); Maintain a high degree of concentration (the new nominal principal Cr5 reached 74.6%).
Capital intermediary business: two financial growth, stock quality compression. 1. Capital intermediary business environment. The balance of the two financial institutions increased by 13.2% year-on-year, and the number of Pledged Shares in the market was 419827 billion shares, a year-on-year decrease of 13%. 2. The two financing scale of listed securities companies increased by 12.8% year-on-year; The on balance sheet scale of stock pledge decreased by 21.6%.
Prospect of securities industry in 2022:
Capital market policy outlook for 2022. 1. With the full implementation of the registration system as the starting point, the pricing and placement system may be further improved. 2. The reform of the investment side of the capital market will guide professional institutions to invest in value and long-term on the basis of public offering investment advisers and brokerage account management. 3. In addition, we will guide the orderly development of capital, increase the legal supply of capital markets, support the further enrichment of financial products, and steadily promote opening to the outside world.
Profit forecast of the securities industry in 2022. 1. Revenue Forecast: under the neutral assumption, the industry’s revenue in 2020 will be 520.3 billion yuan, with a year-on-year increase of 4%, of which the growth rate of brokerage, investment banking, asset management, self operation and two financing revenue is – 9% / 10% / 6% / 4% / 3% respectively. 2. Profit forecast: in 2022, the industry’s net profit will be 192.5 billion yuan, with a year-on-year increase of 1%, the net interest rate will remain about 37%, and the industry roe will reach 7.3%.
Investment suggestion: look at the valuation repair opportunities in the short term and the allocation opportunities in the medium and long term. Low valuation: the valuation of the sector is at an all-time low.
The sector Pb is currently 1.43x. Since 2012, the average Pb in the securities industry is 1.90x, with a median of 1.79x, and the valuation is in the quantile of 9.6% since 2012. Suggested attention: Citic Securities Company Limited(600030) , China stock market news, Gf Securities Co.Ltd(000776) , Orient Securities Company Limited(600958) .
Risk warning: the market fluctuates greatly; The capital market policy is lower than expected; Risk that the information and data used in the research report are not updated in time; Deviation risk of industry scale measurement.
