In 2022q1, the proportion of heavy positions held by non bank sector accounted for 1.18%, of which the proportion of heavy positions held by securities companies was 0.98%, which was 4.94 percentage points lower than that of free circulation market value. The overall position reduction of the securities business sector is 82bp, and the positions in the sector continue to be concentrated in leading and wealth securities companies. We believe that the main reason for the reduction of securities companies’ holdings may be the pressure on performance and valuation under the fluctuation of market conditions, but the market still has high expectations for the upward trend of the wealth management and institutional business transformation of securities companies to promote the long-term valuation center. We continue to be optimistic about the growth of securities companies under the background of the continuous reform of the supply side of the capital market and the improvement of residents’ demand for wealth management. Leading and wealth securities companies have high allocation value under the current valuation level. We continue to recommend Citic Securities Company Limited(600030) , Huatai Securities Co.Ltd(601688) , China stock market news, Orient Securities Company Limited(600958) , China Industrial Securities Co.Ltd(601377) .
Q1 brokerage sector was affected by the reduction of positions of public funds, and the degree of low allocation deepened. By the end of 2022q1, non banking A shares accounted for 1.18% of the market value of all the top ten heavy positions of common and partial share hybrid public funds, including 0.98% of securities, 0.13% of insurance and 0.072% of diversified finance. The heavy position of securities companies decreased by 82bp compared with 21q4, and the insurance and diversified finance sectors were basically the same as 21q4. The free market value of the sector accounts for 6.12% of the market value of all a shares, and the proportion of heavy positions is 4.94 percentage points lower than that of the free circulation market value of the sector. The degree of low distribution in the non bank sector has deepened, with the largest range of low distribution in various industries.
The overall position of securities companies has been adjusted, but the heavy position style has changed slightly. Under the downward environment of the stock market in the first quarter, the market was more worried about the performance pressure of the securities industry in the first quarter, and the market of the securities sector fluctuated greatly, resulting in the overall decline of the proportion of heavy positions in the securities sector. China stock market news (- 57bp), Gf Securities Co.Ltd(000776) (- 61bp), Citic Securities Company Limited(600030) (- 4bp), China Industrial Securities Co.Ltd(601377) (- 4bp), Huatai Securities Co.Ltd(601688) (- 3bp) and other stocks with high positions decreased significantly in the first quarter, but the top five heavy positions in the securities sector were still composed of head securities companies and financial management securities companies, and the concentration of the top five remained above 95%, It shows that although the price fluctuation of stock and fund market in the first quarter may have an impact on the short-term performance of securities companies, the long-term growth of wealth management and institutional business is still recognized by the market.
The heavy positions of some insurance stocks rebounded. Ping An Insurance (Group) Company Of China Ltd(601318) with the highest proportion of heavy positions in the insurance sector basically maintained the allocation level of 0.10%, and China Life Insurance Company Limited(601628) , New China Life Insurance Company Ltd(601336) and New China Life Insurance Company Ltd(601336) were increased by 0.7bp and 0.6bp respectively. The possible negative impact of the reduction of public funds on the stock price has been basically cleared.
Investment advice
The valuation of securities companies has bottomed out and has high allocation value. The continuous reform on the supply side of the capital market and the improvement of residents’ wealth management demand bring long-term development opportunities for various businesses of securities companies, which helps to promote the rise of the long-term valuation center. At present, the price to book ratio of securities companies is lower than the 10% quantile level of valuation in recent ten years. Under the policy of maintaining stability, there is little room to continue to decline, and it has high allocation value. At present, the main driving force for the growth of the industry still lies in wealth management and institutional trading business. We will continue to recommend leading securities companies and wealth characteristic securities companies that focus on benefits. In addition, large market fluctuations may lead to obvious performance differentiation, and comprehensive leading companies with strong fundamental certainty are preferred. Highlight Citic Securities Company Limited(600030) , Huatai Securities Co.Ltd(601688) , China stock market news, Orient Securities Company Limited(600958) , China Industrial Securities Co.Ltd(601377) .
Risk tips
The impact of policy introduction, international environment, epidemic development and market fluctuations on the industry exceeded expectations.
