Zhou’s view: be optimistic about the better targets of the first quarter report and pay attention to the rebound opportunities of the targets of wealth management
Affected by the decline of the stock market in the first quarter, the net profits of securities companies and insurance companies in the first quarter were obviously under pressure. The impact of securities companies’ active or passive equity directional positions on profits exceeded our expectations. In the first quarterly report of securities companies, China stock market news, Citic Securities Company Limited(600030) and Guolian Securities Co.Ltd(601456) profit performance is significantly better than that of peers. In the first quarterly report of insurance, China property insurance data is better. We are optimistic about the target with better first quarter report and the profit boom in the second quarter is expected to continue. At the same time, we are optimistic about the target of big wealth line with low valuation and more benefit from the rebound of the stock market.
Securities companies: the unfavorable stock market environment is the touchstone for the large self operated business of securities companies, and they are optimistic about the better target of the first quarter report
(1) the total net profit of 40 listed securities companies (excluding Caida Securities Co.Ltd(600906) ) in the first quarter was 22.8 billion, a year-on-year decrease of 46%, and the annualized roe decreased to 4.3% (9.6% in 2021). In addition to the investment banking business, the income of listed securities companies decreased year-on-year, and the self operation was the biggest drag. The self investment loss of listed securities companies in the first quarter was 2.2 billion, and the profit in the same period in 2021 was 32.6 billion. The self operation of directional equity and the passive direct investment and follow-up investment brought by investment banks jointly caused the self operation loss. Proprietary trading is the winner and loser of the first quarterly report of securities companies. The first quarterly report of Citic Securities Company Limited(600030) , China International Capital Corporation Limited(601995) , China Securities Co.Ltd(601066) and Guolian Securities Co.Ltd(601456) performed well, reflecting the advantages of derivatives business and strict position control; The unfavorable stock market environment in the first quarter is the touchstone of the large proprietary business of securities companies. Securities companies with high investment income and low risk should receive valuation premium. In the first quarter, the asset management income of securities companies was – 2% year-on-year. The average daily holding scale of partial shares raised by the head increased slightly year-on-year, and the asset management income decreased year-on-year. It is expected to be affected by the high base of floating rate. (2) The boots of the first quarterly report of securities companies have landed. At present, the overall valuation of the head securities companies is at the lowest point in history (the average Pb of top6 is 1.02 times). We believe that the asset quality and safety of securities companies are high, and the sector has configuration value. The short-term logic of the target with better quarterly report in the first quarter and relatively strong prosperity in the second quarter is more smooth. China stock market news is the first to benefit the target Citic Securities Company Limited(600030) and Guolian Securities Co.Ltd(601456) ; The short-term prosperity of the wealth management line is under pressure. The current valuation has the allocation value, and the rebound of the net value of the fund may lead to race track catalysis. It is recommended that Gf Securities Co.Ltd(000776) and Orient Securities Company Limited(600958) .
Insurance: the first quarterly report of property insurance performed relatively well, and the core solvency of listed insurance companies did not affect the subsequent development
(1) China Life Insurance Company Limited(601628) / Ping An Insurance (Group) Company Of China Ltd(601318) / AIA’s NBV in the first quarter was – 14.3% / – 33.7% / – 18% respectively. Affected by the decline of manpower, weak demand and industry transformation, as well as the impact of the epidemic in some areas, it was more difficult to develop the industry, and NBV was under overall pressure in the first quarter. The decline in the equity market was a significant drag on the net profit of listed insurance companies in the first quarter. The data of the first quarter report of China property insurance is relatively good. The prosperity of auto insurance premium has improved, and the comprehensive cost rate has further decreased to 96.0%. The loss range of non auto insurance has narrowed significantly. At the same time, the performance of investment income in the first quarter is better than that in the same industry. (2) After the second generation phase II project, insurance companies disclosed solvency indicators for the first time. The core solvency of listed life insurance companies is basically 140% – 180%, significantly higher than the regulatory red line of 50%, which is expected to have no significant impact on business development and dividend policy. (3) Looking ahead, the high outlook of auto insurance is expected to be maintained, benefiting China property insurance; At present, life insurance is at the bottom of the valuation. We pay attention to the improvement progress on the liability side. We recommend Ping An Insurance (Group) Company Of China Ltd(601318) , which has a large repair space on the asset side, China Pacific Insurance (Group) Co.Ltd(601601) , which is leading in transformation, and China Property Insurance (H shares), AIA (H shares) and China Life Insurance Company Limited(601628) .
Combination of beneficial objects
Securities companies: China stock market news, Gf Securities Co.Ltd(000776) , Citic Securities Company Limited(600030) , Orient Securities Company Limited(600958) , Guolian Securities Co.Ltd(601456) , China International Capital Corporation Limited(601995) (H shares);
Insurance: China Property Insurance (H shares), AIA (H shares), China Pacific Insurance (Group) Co.Ltd(601601) , Ping An Insurance (Group) Company Of China Ltd(601318) , China Life Insurance Company Limited(601628) ; Diversified Finance: Jiangsu Financial Leasing Co.Ltd(600901) .
Risk warning: stock market fluctuations have an uncertain impact on the profits of securities companies and insurance companies; The growth of insurance liabilities is less than expected; The profit growth of wealth management and asset management of securities companies was lower than expected.
