Stock market review. In 2021, the overall performance of the securities sector was weaker than that of the market, ranking 30th among the 31 Shenwan industries. Among the 42 listed securities companies, only 8 securities companies achieved positive growth. Among them, Gf Securities Co.Ltd(000776) (+ 55.77%), China stock market news (+ 43.88%), Orient Securities Company Limited(600958) (+ 30.04%) and China Industrial Securities Co.Ltd(601377) (+ 15.60%) with an increase of more than 10% are securities companies with excellent performance in the wealth management track. The role of wealth management in raising valuation is relatively clear, Gf Securities Co.Ltd(000776) , Orient Securities Company Limited(600958) and China Industrial Securities Co.Ltd(601377) benefit from participating in and holding high-quality public fund subsidiaries, China stock market news benefits from the customer acquisition advantages brought by its network platform.
Fundamentals continue to improve. The performance of listed securities companies in the third quarter was bright. 42 listed securities companies achieved a total operating revenue of 473.898 billion yuan, a year-on-year increase of 22.86%. The net profit attributable to the parent company was 154.675 billion yuan, with a year-on-year increase of 24.51%. The whole year of 2021 is expected to exceed the high base in 2020. In terms of various businesses, the income from consignment sales of financial products in wealth management is the best. In the first half of 2021, the whole industry achieved a total net income of 10.05 billion yuan. On the other hand, the transformation of investment consulting business is relatively slow. In the first three quarters of 2021, the revenue was RMB 3.68 billion, a year-on-year increase of 15.07%. At present, there are 6 Securities Companies in the second batch of fund investment advisory business, and it will take some time to transform from the seller mode to the buyer mode. In terms of asset management business, the scale of public and private funds increased steadily. As of November 2021, their net asset values reached 25.32 trillion yuan and 19.73 trillion yuan respectively, an increase of 27.30% and 23.50% over the end of the previous year. On the other hand, the expansion of the fund scale of the bond settlement model is good for the asset management business of securities companies. While lifting the Commission ceiling, it has a more flexible configuration scheme, which helps to promote the transformation and development of wealth management of securities companies. In terms of investment banking, the gradual improvement of the pilot registration system on the science and innovation board and the gem, as well as the opening of the Beijing stock exchange, have brought a large number of project reserves to securities investment banks. At the same time, based on the value discovery ability of investment banks, follow-up investment business has created new profit growth points for investment banks.
Reshaping the valuation system of securities companies. At present, with the influx of residents’ wealth into the equity market, consignment financial business and public fund business bring incremental income to securities companies. At the same time, the steady progress of wealth management transformation has shifted the focus of brokerage business from market performance and trading volume to the number of high net worth customers, and the business model has also changed from simple channel business to asset allocation and services with higher added value, Bring more long-term and stable benefits to securities companies. Driven by the transformation of wealth management and the reform of capital market, asset management and investment banking also ushered in an opportunity period, and the valuation lifting ability of asset light business gradually emerged. The brokerage valuation system is expected to gradually transition from traditional Pb valuation to PE valuation for asset light business + Pb valuation for asset heavy business, and then gradually transition to segment valuation.
Liquidity is expected to be loose and stimulated by multiple favorable policies. The central economic work conference focuses on the issue of stable economic growth in 2022. It is expected that some stable growth policies will be issued one after another. With the combination of active fiscal policy and prudent monetary policy, structural credit is worth looking forward to, and liquidity easing is expected to increase. At the same time, the industry has also issued a number of favorable policies. In terms of wealth management business, it has liberalized insurance capital, participated in the implementation of a number of favorable policies for wealth management, such as securities lending and pilot optimization of account management functions of securities companies, so as to promote the transformation of wealth management. In terms of investment banking, the expected implementation of the comprehensive registration system will attract more high-quality enterprises. At the same time, the United States requires more disclosure by foreign companies listed in the United States. It is expected that A-Shares will undertake part of the returned capital, and the number of investment banking projects is expected to increase in 2022.
