In the third week of 2022, Shanghai and Shenzhen stock markets are still experiencing oscillatory market. As the standard bearer of the bull market, brokerage stocks have ushered in a long lost warming, which is undoubtedly the result of the joint action of the central mother’s interest rate cut and the strong performance disclosed by brokerage companies.
However, in the view of market analysts, after nearly a month’s adjustment, high-quality securities companies, especially leading securities companies in wealth management, did fall out of opportunities.
According to statistics, in the past week (from January 17 to January 21), among the 43 A-share securities companies, only 8 shares fell, Shanxi Securities Co.Ltd(002500) fell by 5.4%, ranking first in the decline list; Boc International (China) Co.Ltd(601696) fell 3.47%, and Zhongtai Securities Co.Ltd(600918) fell 3.37%.
On the increase list, Chinalin Securities Co.Ltd(002945) once again took the lead, up 12.9%, ranking first; Guolian Securities Co.Ltd(601456) rose 8.64%, ranking second; Central China Securities Co.Ltd(601375) rose 7.86%, ranking third.
performance exceeded expectations
Since Chinalin Securities Co.Ltd(002945) December opened the trading mode, it has become the leader of securities companies in the eyes of investors. Every time the market warms up as a whole, it is always the fastest and very determined to raise the limit. It took the lead in harvesting the limit board on January 20, directly stimulating the popularity of the sector.
On January 17, the company issued the suggestive announcement on the listing and circulation of shares issued before the initial public offering. On January 18, 2022, the number of shares whose sales restrictions were lifted was 1945210911, accounting for 72.0448% of the total share capital of the company. The shareholders of the release of restricted shares are Shenzhen Liye Group Co., Ltd. (hereinafter referred to as “Liye group”) and Shenzhen xigma Computer Technology Co., Ltd. (hereinafter referred to as “xigma company”).
It is worth noting that, in addition to Chinalin Securities Co.Ltd(002945) , most of the top gainers have been small and medium-sized securities companies in the past week, and the rise of Central China Securities Co.Ltd(601375) for several consecutive weeks has become a dark horse in 2022.
According to statistics, since 2022, Central China Securities Co.Ltd(601375) share price has increased by 8.96% and 11.92% in the past month, ranking first in the sector, followed by Guolian Securities Co.Ltd(601456) .
In an interview with Huaxia times, many market participants said that the excellent performance in 2022, combined with the adjusted opportunities and the easing of overall liquidity, has become the biggest reason for the recent recovery of securities companies.
Recently, Central China Securities Co.Ltd(601375) released a performance forecast. It is expected that the net profit attributable to shareholders of listed companies will increase by 376 million yuan to 456 million yuan in 2021, a year-on-year increase of 360.20% to 436.90%, becoming the securities company with the highest profit growth at present.
According to the announcement of Central China Securities Co.Ltd(601375) , the main reason for the pre increase of its performance is the continuous improvement of multi-level capital market in 2021, actively grasping market opportunities, continuously improving core competitiveness, and the steady development of investment banking, primary and secondary market investment business, wealth management and other main businesses.
According to the data, since last year, Central China Securities Co.Ltd(601375) has helped 16 enterprises such as Shanghai Geoharbour Construction Group Co.Ltd(605598) , Baichuan Huanneng, Kaiwang technology and Shanshui technology to list or pass the meeting, with a passing rate of 100%. The comprehensive ranking of IPO sponsors and passing rate ranks ninth among securities companies in China.
At the same time, Central China Securities Co.Ltd(601375) Shanghai Branch’s bond proprietary investment and equity proprietary investment income increased steadily, and bond investment continued to be at the leading level in the industry. Many projects invested in the investment sector of wealth management business have achieved good returns.
In May 2021, Central China Securities Co.Ltd(601375) was included in the “white list” of the first batch of securities companies in China by the CSRC; More than 4 billion yuan was raised by issuing bonds on the open market, and the company’s working capital was further enhanced.
In addition, Guolian Securities Co.Ltd(601456) , Founder Securities Co.Ltd(601901) , Guotai Junan Securities Co.Ltd(601211) , China Merchants Securities Co.Ltd(600999) and other listed securities companies have released performance forecasts and performance express, and their revenue and profits have exceeded expectations.
Guolian Securities Co.Ltd(601456) it is estimated that the net profit attributable to the shareholders of the parent company will be RMB 880 million in 2021, with a year-on-year increase of 49.72%; Founder Securities Co.Ltd(601901) it is expected to achieve a net profit of RMB 1.645 billion to RMB 1.865 billion in 2021, with a year-on-year increase of 50% to 70%.
On the evening of January 21, China Merchants Securities Co.Ltd(600999) announced the performance forecast for 2021, realizing an annual operating revenue of 29.386 billion yuan, a year-on-year increase of 21.04%; The net profit attributable to shareholders of listed companies was 11.613 billion yuan, a year-on-year increase of 22.35%.
Guotai Junan Securities Co.Ltd(601211) also released the performance express. In 2021, the company realized a net profit attributable to the owners of listed companies of RMB 15.013 billion, a year-on-year increase of 34.98%.
spring sowing investment at the right time?
It can be seen that the spring market of A-Shares in 2022 is later than in previous years, which has a lot of impact on the epidemic and overseas markets. However, the recent awesome action of the central Mama has encouraged the market again, making the “bull market” securities companies take the lead in restlessness.
Recently, the central bank launched 700 billion medium-term lending facility (MLF) and 100 billion open market seven-day reverse repurchase operations. The bid winning interest rates of MLF and reverse repurchase decreased by 10bp, 2.85% and 2.10% respectively.
Gao Gao, an analyst at open source securities, believes that the timing and extent of the two policy interest rate cuts slightly exceeded market expectations, and the implementation of the interest rate cuts released a clear signal of steady growth, which was conducive to the improvement of risk appetite in the equity market. In the stage from wide liquidity to wide credit, brokerage stocks benefited significantly.
Meanwhile, since the new year, the new development fund has been slightly lower than expected, and the market is worried that the cold of new development will affect the wealth management track. In Gaogao’s view, Xinfa has little impact on the retention scale and the profitability of the leading target. Under the rolling stock, replacement of fixed income products and improvement of market share, the retention scale and profit growth of the leading companies are strongly supported, and the performance stability and growth are expected to be gradually verified.
Gaogao believes that since December 2021, the difference in the yield of the internal subject matter of the brokerage sector has more come from the transaction level, switching from partial growth to partial value. At present, the valuation of the subject matter of the brokerage big wealth management track has returned to a safe position, and the wide credit has taken effect, which is expected to boost the profit expectation and valuation revision.
The previous week, although the performance express of Citic Securities Company Limited(600030) exceeded expectations and boosted the market’s expectations for the growth of bond business performance, the subsequent issuance announcement triggered extensive discussion and put significant pressure on the whole sector.
However, professionals believe that the policy dividend period of securities companies is still in progress, including a series of guidelines issued by various regulators to promote the reform of the capital market, such as the CSRC’s launch of the goods and bank deal reform, and the CSRC’s plan to strictly supervise important money market funds.
Huaxi Securities Co.Ltd(002926) Wei Tao, a non banking analyst, believes that the right layout of securities companies focuses on three indicators. After two weeks of adjustment, the overall price to book ratio of securities companies is 1.61 times, lower than the average level in 2020 and 2021. At the same time, the roe level of securities companies has increased steadily. The mismatch of one belt, one road to another, and the other side of the growth of the stock market will bring the opportunity of left side allocation. We can expect the full registration system of stock issuance, the stock exchange and the whole area of the Shanghai Stock Exchange under the international stock exchange plan, and the reform of the trading system of the high-quality assets along the way, the mature sector, and the optimization of the securities company’s comprehensive account to support the underlying structure of asset allocation.
The brokerage sector has a strong beta attribute, so A-share liquidity, transaction activity and market sentiment will be magnified on the market of the sector.
Wei Tao expects that the next 2-3 quarters may be in the stage of wide liquidity to wide credit. For investors who pay attention to the layout signal on the right side of the securities sector, they can pay attention to several aspects, that is, the transaction volume of Shanghai and Shenzhen stock markets has been enlarged to more than 1.4 trillion yuan, the daily transaction volume of the securities sector has been enlarged to 100 billion yuan, and the securities lending scale of listed securities companies has shrunk rapidly.
According to the latest report released by China Securities Co.Ltd(601066) securities, the economy is set to grow steadily, the liquidity is expected to remain loose under the background of weak recovery, and there is high certainty that the business environment of securities companies will improve. In the fourth quarter of 2021, the year-on-year growth rate of GDP dropped to 4%. Under the triple pressure of demand contraction, supply shock and weakening expectation, “steady growth” has become the theme of economic development in 2022. Under the background of repeated epidemic and weak economic recovery, monetary policy may be easy to relax but difficult to tighten, Compared with the statement of “maintaining reasonable and sufficient liquidity” added last year and the statement of the vice governor of the central bank on “making sufficient efforts to open the monetary policy toolbox a little bigger” in January 2022, it also strengthens the market’s expectation of a loose liquidity environment. Listed securities companies will continue to benefit from the active trading brought by Panasonic, and sector layout opportunities are brewing.
At the same time, the continuous entry of residents’ wealth into the market and the comprehensive registration system reform will further open the space for the long-term growth of the industry. In 2022, wealth management and head undervalued securities companies will still be the most deterministic investment targets.
According to the report, the weakness of new development funds in early 2022 is not the weakening of demand, but the adjustment brought by short-term fluctuations, but the opportunity to buy. Since the fourth quarter of 2021, the market has continued to fluctuate, the valuation of popular track stocks has fallen, the profit-making effect has decreased, and the wait-and-see mood of investors has increased, which is the main reason for the cold issuance of funds. With the stabilization of the market, it is expected that investors’ financial demand will continue to release.
Meanwhile, the fundamentals of listed securities companies are excellent, and the performance of 2021 annual report may exceed expectations, but the overall valuation is still at a historical low.
