Core view:
In 2021, the growth of securities sector was lower. As of December 31, 2021, the cumulative market value of the securities sector was 3.46 trillion yuan, ranking sixth among the secondary industries of Shenwan. The market value of the securities sector accounted for 1.83%, a decrease of 0.3 percentage points over the end of the previous year. The performance of the securities sector is weaker than that of the CSI 300 index, ranking lower in the secondary industry index. As of the closing on December 31, 2021, the securities II (CITIC) index has increased by – 10.62% since the beginning of the year, ranking 94th among 109 CITIC secondary industry indexes.
In 2022, wealth management will still be the main driving force for the fundamental growth of securities companies, and institutional business will also usher in growth and transformation opportunities, which is expected to form synergy with the wealth business sector. The transformation of wealth management business of securities companies and the transformation of proprietary customer demand business are conducive to reducing income fluctuation and improving performance certainty. The steady growth of roe is conducive to the improvement of long-term valuation center.
The industry is still in the undervalued range and has great room for rise. At present, the price to book ratio of A-share securities companies is 1.61 times, which is only near the 20% quantile in 10 years, which makes the undervalued value deviate from the high view, and there is a large room for the rise of valuation. In 2022, the monetary policy is expected to be stable and loose, the stock market and fund market have abundant liquidity, and the securities industry has frequent favorable and innovative policies, which is expected to catalyze the market of the sector.
Key targets:
1. Huatai Securities Co.Ltd(601688) : the comprehensive industry is at the top, the current valuation is too low, the cost performance is high, and all businesses rank at the top. With the help of financial technology, the transformation of wealth management is accelerated. We are optimistic about the company’s future performance growth and valuation repair. We give the company 1.3 times Pb in 2021, the target share price is 21.17 yuan, and maintain the “buy” rating.
2. Gf Securities Co.Ltd(000776) : the initiative management ability is leading, the risk of investment banking business is gradually cleared, and the business is gradually normalized. Give the company 2 times Pb in 2022, the target share price is 29.49 yuan, and give a “buy” rating for the first time.
Risk tips: monetary policy factors, industry supervision factors, epidemic factors.
