Policy: the capital market reform has entered an accelerated period, and the differentiation of “supporting the excellent and limiting the inferior” has intensified. The market-oriented reform of capital factors has entered an accelerated period. The expansion of equity market and the construction of multi-level capital market are important long-term reform themes. The policy dividend of capital market has three functions: one is to open up the development space of the industry and bring new business growth points to securities companies; Second, the policy is favorable and catalyzes the valuation and repair of the sector; Third, the comprehensive advantages of head securities companies will be more prominent during the reform period. From the perspective of specific policy direction, it is expected to achieve key breakthroughs in the following aspects: the stock issuance will realize the comprehensive registration system; The scientific innovation board will first implement the pilot of market maker and further promote the market maker system inside and outside the market; Realize the interconnection of asset side cross-border market through depositary receipts business. In addition, the CSRC supports the superior and limits the inferior to guide the compliant operation of the industry, and the industry differentiation may further intensify under the guidance of supervision.
Fundamentals: the volatility of industry performance has decreased, the differentiation has intensified, and the top securities companies are always strong. Thanks to the continuous rise of net profit margin, the roe of securities companies also showed an upward trend, rising from 3.56% in 2018 to about 8% in 2021. We believe that the roe of securities companies has undergone a new marginal change, that is, it fluctuates from a historical height and gradually stabilizes. The main reasons are as follows: 1. With the promotion of capital market reform and the improvement of the importance of the equity market, securities companies, as the most direct beneficiaries, show a trend of “compensating price by quantity”. 2. Diversified income structure and stable structure. The proportion of brokerage business, the traditional main source of income, has decreased from 40% in 15 years to 31% in 21 years, and the proportion of various businesses tends to be balanced. 3. Leverage ratio increased gradually. Affected by the rapid expansion of business, the leverage ratio of the securities industry has increased steadily, from 2.65 times in 16 years to about 3.4 times in 21 years. At present, the industry leverage ratio is still a certain distance from the upper limit of 6-7 times of supervision. In terms of performance, the head securities companies (the top five in the market) performed well, and the proportion of revenue and net profit increased. Cr5 has an upward trend in both overall indicators and business segments.
Assets and liabilities have entered a new round of expansion period, and the asset quality of the securities industry has been improved. Securities companies have entered a new round of expansion cycle, and two financial assets are the main asset allocation direction. Driven by capital intermediary business and institutional trading business, the expansion of the balance sheet of the securities industry is accelerated, and the improvement of leverage is conducive to the innovation of the industry’s business model and the improvement of performance. In the institutional trend of asset management business, in addition to the traditional brokerage trading, investment research services and other businesses, the diversification and customization of institutional demand put forward higher demand for the institutional trading and market making ability of securities companies, which is most directly reflected in the rapid development of off-site derivatives market. In addition, the license advantages, capital advantages and customer advantages of the head brokerage’s institutional business are expected to be further highlighted.
Valuation: the valuation of listed securities companies is at an all-time low, with configuration cost performance. According to the data of nearly ten years since 2012, the arithmetic average valuation of Pb (LF) is about 1.9x. As of May 20, the industry’s Pb (LF) valuation of 1.3x was in the lower central position. The securities sector has been continuously adjusted since the fourth quarter of 20. The valuation has reflected the pessimistic expectations of some markets, and there is a certain repair demand. From the perspective of listed companies, the Pb valuation of some head securities companies has dropped to about doubled, with more valuation repair space. In the context of deepening the reform of the capital market, we believe that the securities industry will play a more active role, and the securities business sector has a higher allocation and cost performance.
Investment advice: securities companies will also show strong performance in the period of accelerated capital market reform and industry transformation α Properties. “Differentiation” is the key word interpreted by the industry in the second half of the year. In the process of “differentiation”, the head securities companies and some securities companies with differentiated competitiveness are expected to obtain excess returns. It is suggested to pay attention to the main line: 1) the opportunity of making up for the rise of leading securities companies with outstanding comprehensive strength and gradually increasing market share in the securities sector, and Citic Securities Company Limited(600030) (a + H) is recommended; 2) In the era of wealth management, China stock market news, a unique internet wealth management leader, benefited from the development of asset management business and fund subsidiaries Gf Securities Co.Ltd(000776) .
Risk analysis: the steady growth policy is less than expected; The secondary market fell sharply.
