Regulatory developments: (1) the CSRC solicited public opinions on the Interim Provisions on the supervision of important money market funds (Draft for comments). The Interim Provisions clarify the definition and evaluation methods of important money market funds and effectively identify important money market funds; Clarify the additional regulatory requirements for important money market funds and enhance their anti risk ability; Clarify the risk prevention, control, supervision and management mechanism of important money market funds. (2) China Securities Regulatory Commission launched the reform of dealing with goods and banks. China’s securities law clearly stipulates that when providing net settlement services for securities transactions, securities registration and settlement institutions shall require settlement participants to deliver securities and funds in full and provide settlement guarantee in accordance with the DVP principle. This reform establishes the relationship between securities delivery and capital delivery for self operated and custody businesses, defines the disposal arrangements for breach of contract, and ensures the full delivery of money and securities after securities transactions are concluded. China Clearing will simultaneously reduce the settlement provision, set the collection proportion of the minimum settlement provision differently, and reduce the minimum provision proportion of stock business from 18% to an average of about 15%, which will help to improve the efficiency of capital use.
Industry data: (1) Brokerage: it has broken trillion yuan for 9 consecutive trading days since 2022, with an average turnover of 1.08 trillion yuan last Sunday, a month on month increase of – 13%. (2) Proprietary trading: the main indexes closed down, with the CSI 300 index and the gem index – 4.32% and – 6.12% respectively. (3) Credit: as of January 13, the balance of the two financial institutions was 1.81 trillion yuan, down -0.95% from the beginning of the year. Among them, the balance of financing was 1.71 trillion yuan, up – 0.4% from the beginning of the year, and the balance of securities lending was 109.529 billion yuan, up – 8.83% from the beginning of the year. (4) Investment banking: according to the statistics of the listing date, the equity fund-raising last week totaled 78.079 billion yuan, a month on month increase of + 11%. Among them, IPO raised 17.627 billion yuan, additional issuance raised 10.452 billion yuan and convertible bond ( Industrial Bank Co.Ltd(601166) ) raised 50 billion yuan. The total amount of bonds underwritten by securities companies was 141.725 billion yuan, including 47.91 billion yuan of corporate bonds.
Investment suggestions:
The Pb multiple of industry valuation is 1.65 times, and the performance of securities companies is highly uncertain. As of January 14, the securities III index PB1 65 times, slightly lower than the median in recent five years, of which 27 listed securities companies are lower than the industry valuation. Listed securities companies have successively disclosed their performance in 2021 (advance notice or express report). The operating data are stable. The industry leader Citic Securities Company Limited(600030) is expected to return to the parent company’s net profit of 22.979 billion yuan in 2021, with a year-on-year increase of 54.20%; Guolian Securities Co.Ltd(601456) it is estimated that the net profit attributable to the parent company will be RMB 880 million in 2021, with a year-on-year increase of about 49.72%.
Focusing on the business layout of asset light advantage is our main suggested direction at the current time point. The deepening reform of the capital market supports macroeconomic transformation and serves the national strategic objectives. At the same time, the securities industry also fully benefits from the broad business opportunities contained in the real economy. Asset light business has relatively low risk and little capital restriction, which helps to smooth performance fluctuations and is more favored by the market in valuation. The ceiling of wealth management business and institutional business is high, and the business space is broader. First, based on the vision of common prosperity, reaffirm the blue ocean field of wealth management business and pay attention to the securities companies that first release the Bureau in the big wealth management industrial chain. Second, based on the deepening trend of investor institutionalization, select securities companies with strong institutional service capacity and high proportion of institutional business. Third, it is recommended to pay attention to the head securities companies, take the lead in compliance risk control, and the new business pilot occupies the first mover advantage. It is recommended to pay attention to Citic Securities Company Limited(600030) , China stock market news, China Industrial Securities Co.Ltd(601377) , China Merchants Securities Co.Ltd(600999) , etc.
Risk tips:
The secondary market fell sharply; The reform of capital market is not as expected; The impact of the epidemic exceeded expectations
