When can the "thick eyebrows and big eyes" sector of securities companies be proud again?
As the wind vane of the stock market, the wind brokerage index has decreased by 4.48% in the past six years, significantly underperforming the Shanghai and Shenzhen index in the same period. In contrast, the continuous performance of individual stocks in this sector has been good in recent three years, so the valuation advantage has gradually become prominent. According to the data, the roe of securities companies has been close to the level of previous bull market (2015-2016), but its valuation is still at the bottom quarter of history. At the time of the gradual decline of high-priced stocks after the year, funds also began to bargain hunting in the brokerage sector. A brokerage ETF has achieved net subscription of funds for 10 consecutive trading days.
The reduction of reserve requirements in July last year drove the brokerage index to rise by nearly 20% within two months after the policy was announced. The recent favorable policies, such as the comprehensive registration system, the reduction of reserve requirements and interest rates, have increasingly awakened the market's attention to the securities companies with high "wealth ratio", and also improved the space for institutions to imagine the future market.
the valuation is at an all-time low, and the signal of fund bottom reading is obvious
In recent years, the A-share structural market is dizzying. The tide of the sector rises and falls, and the hot spots rotate alternately. However, the brokerage sector, which is expensive as the "flag bearer of the bull market", has rarely become the focus of investors.
With the beginning of the annual report season, the performance forecast of securities companies in 2021 has been released one after another. Up to now, the growth rate of net profit in this sector is the lowest, with 30%. The "first brother of securities companies" Citic Securities Company Limited(600030) is expected to realize a net profit of 22.979 billion yuan, a year-on-year increase of 54.2%; The Central China Securities Co.Ltd(601375) amazing market with a net profit growth rate of 400%.
According to the data, the net profit growth of the target company index of a securities firm ETF in 2019 and 2020 was 73% and 35% respectively. The net profit attributable to the parent company in the first three quarters of 2021 hit a record high of 160.4 billion yuan, maintaining a year-on-year profit growth of 23% under the high base.
When the stock price stagnated, the valuation of securities companies with good performance for three consecutive years became more prominent. As of January 17, the latest valuation of the securities sector was 1.7 times Pb, with a P / E ratio of 18.76 times.
Huabao Fund believes that the fundamentals, policies and sector valuation have formed a large contrast. The profit of securities companies continues to reach a new high, and the relative roe is close to the level of the previous bull market (2015-2016), but its valuation is still at the bottom quarter of the valuation, and the long-term and short-term allocation value of securities companies is continuously highlighting.
When the myth of high valuation sector is no longer in years, undervalued securities companies are attracting funds to bargain hunting, and the long signal is obvious. Taking Huabao fund ETF as an example, on January 14, the net value of the fund fell by 2.66% in a single day, but it received a net subscription of more than 660 million yuan, and achieved a net subscription of more than 2.48 billion yuan for 10 consecutive trading days.
what do institutions think of the frequent positive policies?
Recently, the CSRC issued the Interim Provisions on the supervision of important money market funds (Exposure Draft), which will strengthen the supervision of monetary fund products with a net asset scale of more than 200 billion yuan or more than 50 million investors, and clarify the regulatory requirements on investment varieties, concentration and term. Dongxing Securities Corporation Limited(601198) said that this move may lower the head cargo base yield, and then guide the transfer of funds to small and medium-sized cargo base, or some funds will flow into the asset management products of securities companies, which will be beneficial to the asset management business of securities companies.
Secondly, on January 17, the CSRC held the 2022 system work meeting. The meeting stressed that the capital market reform should be further promoted with the full implementation of the stock issuance registration system as the main line.
Gf Securities Co.Ltd(000776) it is estimated that the implementation of the comprehensive registration system will bring significant benefits to the securities sector in three aspects:
First, the investment banking business and the registration system have improved the IPO process and the efficiency of the whole direct market financing;
Second, securities brokerage business, referring to the registration system of the gem, the transaction volume of the whole gem has increased from 15% ~ 20% to 30% ~ 40% of the whole market, which will greatly improve the transaction volume of the whole market in the future;
Third, in credit business, the original interest proportion of 1.5% of the securities lending provider may gradually become a 4% ~ 5% interest margin, and the securities lending provider can earn the interest margin.
On the same day, the central bank carried out 700 billion yuan medium-term lending facility (MLF) operation and 100 billion yuan open market reverse repurchase operation. The bid winning interest rate (Omo) of medium-term lending facility (MLF) operation and open market reverse repurchase operation decreased by 10 basis points to 2.85% and 2.10% respectively.
China Merchants Securities Co.Ltd(600999) believes that the time and range of interest rate reduction are better than expected. The most important consideration of this interest rate cut is to strengthen the market's expectation of liquidity relaxation. With the change of China's economic situation, the connotation of steady growth has also been adjusted accordingly: steady growth has gradually become a means, and steady employment is the purpose. The modern monetary policy framework of the central bank has also clearly put forward that stabilizing employment is the new goal of monetary policy. Although fiscal and structural policy tools can alleviate the cost pressure of small and medium-sized enterprises, raising expectations still needs to be driven by interest rate cuts. Before the central bank cut MLF interest rate this time, the market had expected to cut interest rate.
"We believe that the interest rate cut may be more out of the consideration of 'strong expectation', and release the signal of loose policy through the interest rate cut to boost small and medium-sized enterprises (especially small and medium-sized enterprises in the service industry) Confidence and make a start to achieving the goal of "stabilizing employment". It is expected that this interest rate cut will drive the short-term interest rate to be lowered by 10 basis points simultaneously, and it is still in the channel of marginal liquidity easing. There will still be specific easing measures in the future. " China Merchants Securities Co.Ltd(600999) according to the research report.
Resumption of trading on July 9 last year, the central bank announced a comprehensive reduction in the reserve requirement. Since then, the securities companies Orient Securities Company Limited(600958) with high "wealth ratio" have doubled their share prices in two months since the limit was raised on the first day; Gf Securities Co.Ltd(000776) increased by nearly 80% in two months; China Greatwall Securities Co.Ltd(002939) the growth rate exceeded 50% in two months, and the brokerage index increased by nearly 20% driven by wealth management brokers. China Merchants Securities Co.Ltd(600999) believes that the macro liquidity continues to be loose, which is conducive to the valuation repair of securities companies. At present, due to the lack of hot spots in the market, the valuation of securities companies has dropped, the valuation is at a historically low level, and the correction of high "wealth ratio" securities companies has been obvious since the beginning of the year. As a typical liquidity sensitive sector, the interest rate cut will further enhance the action energy on the sector, and securities companies have the opportunity to perform continuously.
How should be laid out? This is how institutions recruit
The brokerage sector benefited from the improvement of residents' demand for wealth management. In the past, Chinese residents mainly relied on real estate and bank financial management for asset appreciation. With the suppression of the above two aspects by policies in recent years, including "bank financial management is not allowed to be just cashed" and "real estate is not fried".
for such phenomena, Celestica Fund believes that the channels for residents' wealth appreciation are gradually compressed, and finally flow to public offering, private placement, stock market, and finally to large, medium and small enterprises.
At this stage, some high-quality securities companies have excess alpha attributes. As for how to layout the brokerage sector, Tianhong Fund believes that:
I. securities companies with leading fund companies and significant scale growth. It mainly benefits from the transfer of residents' wealth to public offering, and the scale growth rate in the future is still very considerable.
II. Securities companies with strong consignment strength of fund products. Because fund companies need to rely on channel parties to sell fund shares and pay commissions, and the stronger the channel is, the stronger the bargaining power on commissions is. Therefore, while the scale of public and private funds continues to grow, channel securities companies will also benefit.
III. securities companies with strong derivatives business and strong institutional service ability. After years of development, derivatives business is now relatively mature; For large leading securities companies, the number of institutional customers determines the success of derivatives business. When customer demand can be relatively completely hedged, securities companies only need to charge handling fees on both sides without taking risks. At the same time, it can avoid self operated thunder and improve the rate of return on capital.
Zheshang Securities Co.Ltd(601878) the latest research report points out that the comprehensive registration system is conducive to improving the issuance efficiency, increasing the proportion of direct financing, and bringing performance increment to the investment banking business of securities companies. The reform of registration system puts forward higher requirements for the underwriting ability, pricing ability and sales ability of securities companies. The head securities companies with rich project experience and sufficient talent reserves benefit more. The income concentration of investment banking business has increased from 29% in 2019 to 31% in the first half of 2021. At the end of the third quarter of 2021, the top five IPO underwriting scale exceeded 50%, In the future, leading investment banks will continue to benefit from the dividends of the registration system reform.
