Key points of investment: favorable policies occur frequently, and the expectation of loose monetary policy is added. We strongly recommend the layout of the core targets of wealth management with high prosperity, and continue to recommend Gf Securities Co.Ltd(000776) , Orient Securities Company Limited(600958) , China stock market news, Citic Securities Company Limited(600030) , and it is recommended to pay attention to China International Capital Corporation Limited(601995) (H).
The positive factors in the securities sector have accumulated rapidly, and it is strongly recommended to lay out the core target of high prosperity wealth management.
1) the 5-year LPR was lowered by 15bp, slightly exceeding the market expectation. In May 2022, the price of LPR was lowered: the price of one-year LPR was 3.70%, which remained unchanged; The five-year LPR was 4.45%, down 15bp The resumption experience shows that in the environment of loose liquidity, the brokerage sector, as a sector with obvious beta attribute, will have obvious excess returns.
2) the implementation of public fund management measures is beneficial to the asset management of head securities companies and securities companies participating in and holding large public funds. The administrative measures essentially relax the restriction of “one participation and one control” of the same subject holding the public offering license. We judge that the asset management of subsequent securities companies will accelerate the application for the public offering fund license (CITIC asset management, GF asset management, etc.), which is expected to provide an opportunity for their business transformation. Recently, a series of policies have encouraged the differentiated development of head fund companies. Specifically, by setting up professional subsidiaries and carrying out innovative businesses such as public REITs and private equity investment fund management, it is expected to improve the current single profit model of fund companies.
3) the implementation of the reform policy of cash for goods is expected to improve the utilization efficiency of market funds. China Clearing has made it clear that the minimum settlement provision applicable to bond varieties (including cash bond transactions and repurchase transactions) is calculated and charged at 10%, and the minimum settlement provision applicable to other securities varieties other than bonds is calculated and charged at 16%.
In the future, we will also find an appropriate time to implement the “differentiated calculation and collection method of the proportion of minimum settlement provisions”.
The safety margin of valuation of securities companies is high. Since the beginning of the year, the valuation of securities companies has continued to callback, and the valuation of Shenwan securities index is within the last 5% range since 2011, which is infinitely close to the historical bottom range in the third quarter of 2018. At present, the valuation of listed securities companies is lower than or close to one time Pb, which has reflected the pessimistic expectation of a sharp decline in the income end (self operated) in the early stage.
Wealth management business is expected to enhance the valuation center of securities companies. By resuming the trend of securities companies in 2021, we found that wealth management securities companies significantly outperformed the market and industry indexes; By reviewing the development of overseas investment banks (Morgan Stanley and UBS) in the past decade, it is found that the layout of wealth management business can support higher valuations. Therefore, we continue to be optimistic about: 1) the profit contribution of its public funds is high (the main business is under pressure in 2022, and the “base content” is expected to be further improved) or Gf Securities Co.Ltd(000776) , Orient Securities Company Limited(600958) ; 2) The leading securities companies in the transformation of wealth management, namely Citic Securities Company Limited(600030) , China International Capital Corporation Limited(601995) (H) and China stock market news (the share of brokerage / two financial markets increased, and the fund consignment remained stable).
Risk tips: market fluctuation risk, lower than expected capital market reform, operation and business risk
