The stock market rose sharply yesterday, with the Shanghai index closing up 1.6% and the gem index rising 1.69%. Northbound funds made a substantial net purchase of 14.236 billion yuan throughout the day, and the single day net purchase reached a six-month high.
As the standard bearer of the bull market, securities companies also have good performance. As of yesterday’s close, Caida Securities Co.Ltd(600906) limit Gf Securities Co.Ltd(000776) , China stock market news, First Capital Securities Co.Ltd(002797) , China Securities Co.Ltd(601066) , etc. followed the rise. According to the Research Report of a number of securities companies, the valuation of price to book ratio of securities companies is lower than the valuation quantile of 93% in the past seven years, and the time point of layout on the left has come. It is suggested to grasp the opportunity of bond business performance and valuation repair after the market warms up.
analysts pointed out that if the city scene continues to be depressed, it is difficult for securities companies with wealth management characteristics to achieve significant performance growth during the year, and the performance of head securities companies is more likely to exceed expectations; If the popularity of the market scene is significantly recovered, wealth management is still expected to become the main allocation direction of the market choice
the market rose sharply and the shares of securities companies were closed
On May 20, the market erupted. The Shanghai stock index closed up 1.6% and the gem index rose 1.69%. Coal, Baijiu, aviation and vaccine sectors led the rise, and the brokerage index rose 1.85%. This week, the Shanghai Composite Index and the gem index rose by more than 2%.
Foreign investors actively bought unilaterally at the opening and continued to increase their positions to the closing, boosting the index to close at a daily high for two consecutive days. Data show that the total turnover of northbound funds throughout the day was 92.937 billion yuan, an increase of 23.9% month on month; During the day, there was a significant net purchase of RMB 14.236 billion, with a single day net purchase reaching a new high since December 9, 2021, and net purchase for two consecutive days, breaking the wait-and-see trend of inflow in one day and outflow in the next day in nearly eight trading days. This week, northbound funds accumulated a net purchase of more than 15 billion yuan, including a net inflow of nearly 20 billion yuan in the past two trading days.
brokerage stocks, as of yesterday’s closing, Caida Securities Co.Ltd(600906) still rose by the limit Gf Securities Co.Ltd(000776) , China stock market news, First Capital Securities Co.Ltd(002797) , China Securities Co.Ltd(601066) , etc. followed the rise. The brokerage index rose 85.1%. Securities companies have been doing well. Shortly after the opening, brokerage stocks rose, Caida Securities Co.Ltd(600906) raised the sealing sector, China Securities Co.Ltd(601066) , Guosheng Financial Holding Inc(002670) , China stock market news and so on. Brokerage stocks continued to rise in the afternoon opening, Caida Securities Co.Ltd(600906) sealed the daily limit, Gf Securities Co.Ltd(000776) , Guosheng Financial Holding Inc(002670) , China Securities Co.Ltd(601066) , China stock market news, etc. followed
On the news side, after three consecutive months of unchanged, LPR ushered in a downward adjustment. The people’s Bank of China authorizes the national interbank lending center to announce that the quoted interest rate (LPR) of the loan market on May 20, 2022 is: 1-year LPR is 3.7%, and the LPR over 5 years is reduced from 4.60% to 4.45%.
Soochow Securities Co.Ltd(601555) indicates that the LPR quotation is adjusted in steps of 5bp. Generally, a 10bp interest rate cut will pry the five-year LPR down by 5bp. Therefore, it can be said that the five-year LPR will take three steps at one time this month. It can be seen that the market-oriented adjustment mechanism of deposit interest rate previously implemented by the central bank, that is, banks adjust deposit interest rate with reference to 10-year Treasury bond yield and 1-year LPR, has a significant effect on reducing bank capital cost.
securities companies’ performance in the first quarter was not ideal
According to the data, in the first quarter of this year, the operating revenue of 41 listed securities companies totaled 96.268 billion yuan, a year-on-year decrease of 41 billion yuan, a decline of nearly 30%; The total net profit attributable to the parent company was 22.921 billion yuan, a year-on-year decrease of 19.5 billion or 46%. As many as 8 listed securities companies lost their net profits to their parent companies.
self operated business performed poorly and became a “drag” instead of the “king of income contribution”. According to the statistics of Chinese reporters of securities companies, the self operated business income of 41 listed securities companies totaled an actual loss of 2.103 billion yuan, while the income in the same period last year reached 32.819 billion yuan. Among them, 22 listed securities companies lost money in the first quarter of this year, and another 16 fell year-on-year
Citic Securities Company Limited(600030) is the only listed securities company with a revenue of more than 10 billion yuan (15.216 billion yuan) in the first quarter of this year. In the same period last year, there were three companies with revenue of 10 billion. The number of listed securities companies with more than double-digit revenue also decreased, with a total of 18, a decrease of 9 compared with the same period last year.
Guotai Junan Securities Co.Ltd(601211) , Galaxy Securities, Huatai Securities Co.Ltd(601688) , China Securities Co.Ltd(601066) , China International Capital Corporation Limited(601995) revenue is more than 5 billion. Among them, China Securities Co.Ltd(601066) growth rate reached 31.83%. This is related to the poor performance in the same period last year. In the first quarter of last year, the scale of China Securities Co.Ltd(601066) revenue fell out of the top ten.
Zheshang Securities Co.Ltd(601878) the operating revenue in the first quarter was outstanding, ranking 11th with the scale of RMB 3.133 billion, surpassing Orient Securities Company Limited(600958) (RMB 3.126 billion) and Guosen Securities Co.Ltd(002736) (RMB 2.976 billion). Dragged down by its own performance, Hongta Securities Co.Ltd(601236) its revenue in the first quarter of this year was -674 million yuan.
The downturn of the market has a great impact on small and medium-sized securities companies, and up to 8 listed securities companies have lost their net profits. All are small and medium-sized securities companies. Five of them lost more than 100 million, namely Hongta Securities Co.Ltd(601236) , Northeast Securities Co.Ltd(000686) , Huaxi Securities Co.Ltd(002926) , Southwest Securities Co.Ltd(600369) , Guoyuan Securities Company Limited(000728) .
in addition to losses, the net profit attributable to the parent company of as many as 29 listed securities companies decreased, accounting for 70.73%. Among them, the net profit of more than half of the securities companies decreased by more than 50% year-on-year, including many large securities companies, including two in Shanghai
There were four listed securities companies with net profit growth, of which First Capital Securities Co.Ltd(002797) due to the low base in the same period last year, the growth trend was obvious this year, and the net profit attributable to the parent company was 72 million yuan, a year-on-year increase of 421.70% The Pacific Securities Co.Ltd(601099) securities increased by 97.86%, and the net profit attributable to the parent company was 09 million yuan Guolian Securities Co.Ltd(601456) net profit attributable to parent company was 189 million yuan, with a year-on-year increase of 20.06% Citic Securities Company Limited(600030) increased by 1.24%.
China International Capital Corporation Limited(601995) , Galaxy Securities, China Securities Co.Ltd(601066) , Haitong Securities Company Limited(600837) , China Merchants Securities Co.Ltd(600999) , Gf Securities Co.Ltd(000776) , Shenwan Hongyuan Group Co.Ltd(000166) net profit attributable to parent company is in the range of 1-1.7 billion. The net profit scale of eight securities companies is only one million or ten million, compared with only three in the same period last year.
industry valuation at historic bottom
In the 2022 interim strategy report of the securities industry, Huachuang Securities pointed out that the valuation of the price to book ratio of the securities sector is lower than the valuation quantile of 93% in the past seven years, and the time point of the layout on the left has come. From the historical performance, the rising probability of the sector after touching the low valuation point is large, but the future trend is the key to the choice of investment strategy. If the city scene continues to be depressed, it is difficult for securities companies with wealth management characteristics to achieve significant performance growth during the year, and the performance of head securities companies is more likely to exceed expectations; If the popularity of the market scene is significantly recovered, wealth management is still expected to become the main allocation direction of the market choice.
Huaxi Securities Co.Ltd(002926) report indicates that at present, the industry valuation and even the whole market valuation are at a historically low position, and the industry performance is expected to bottom up. The short-term regulator’s reduction of transaction settlement rate indicates that the establishment of capital market policy, the promotion of individual pension policy and the high-quality development of public funds are conducive to the admission of long-term funds. The long-term launch of the international board and the comprehensive promotion of the registration system all need a healthy capital market, which is optimistic about the long-term development of the capital market and the securities industry.
Huaxi Securities Co.Ltd(002926) said that there are four main lines for individual stocks to benefit significantly. First, the market share has been continuously improved, benefiting from the great development of wealth management, and the performance of securities companies is significantly better than that of the industry. Secondly, securities companies with advantages in institutional business and toughness in performance when the business environment is very challenging. Thirdly, the public fund industry chain layout is leading, and the risk business is expected to reverse the plight of securities companies. Finally, some small market value securities companies with low valuation.
Kaiyuan Securities believes that there are two current stock selection ideas for undervalued securities companies. Idea 1: in the context of the large-scale rebound of the stock market, the big wealth management track has stronger flexibility (core main line in the early stage + full decline). The economic improvement and the recovery of equity asset income have the largest room to drive the profit and valuation of the wealth management track. The current valuation security of the track target is strong and has long-term allocation value. Idea 2: the target with strong marginal prosperity has relative income in the volatile market. Pay attention to the target with good first quarter report and continuous profit prosperity in the second quarter
Tianfeng Securities Co.Ltd(601162) said that the head securities companies with excellent wealth management and institutional business are expected to obtain higher valuation premium. The reform of the registration system and institutionalization will reshape the industry ecology of securities companies, which is expected to force securities companies to improve their professional level and risk control ability, and change from inefficient competition such as price war, crowd tactics and redemption of old and new products to high-level competition such as deep-rooted industrial research, coverage of institutional customers and high net worth customers, effective customer conversion rate and retention rate and product ownership, From the high-risk operation of directional investment to the steady operation of improving the stability and sustainability of investment.
Tianfeng Securities Co.Ltd(601162) said that in this process, head securities companies have significant advantages relying on capital strength, brand advantages and talent team. Business opportunities and customer resources may continue to focus on the head. Head securities companies with excellent wealth management and institutional business are expected to obtain higher valuation premium. At present, the Pb in the securities sector is only 1.2 times, which is at the bottom of history (below 5% since 2013). It is suggested to grasp the opportunity of securities business performance and valuation repair after the market warms up.
