As expected by the market, 2021 will be a bumper year for securities companies.
As of January 25, at least 26 securities companies have predicted the performance of 2021, of which only 5 have a year-on-year decrease in net profit, that is, the performance of more than 80% of securities companies has increased year-on-year, and even the net profit of 4 securities companies has doubled. However, one brokerage also suffered a loss.
According to the statistics of the reporter of the securities times, at least three leading securities companies have predicted that the net profit has exceeded 10 billion yuan, and the year-on-year growth rate is considerable. Among them, Citic Securities Company Limited(600030) ranked first with 23 billion yuan, with an increase of 54.2%; The net profit of Guotai Junan Securities Co.Ltd(601211) securities was 15 billion yuan, an increase of 34.98%; China Merchants Securities Co.Ltd(600999) net profit increased by 22.35% to 11.613 billion yuan.
At the same time, some characteristic securities companies broke through the shackles of Matthew effect and achieved substantial growth in performance. For example, the net profit of Orient Securities Company Limited(600958) which is good at public fund-raising management and wealth management reached 5 billion yuan to 5.6 billion yuan, with an increase of 85% ~ 105%; The net profit of China stock market news securities, backed by the parent company’s one-stop wealth management platform, also increased by about 67% to 4.825 billion yuan.
3 head securities companies
profit exceeded 10 billion
The announcement shows that at present, a total of 12 listed securities companies have issued performance forecasts for 2021, and another 14 securities companies have disclosed the unaudited financial reports of 2021 (parent company) by major shareholders. From the existing samples, most securities companies have achieved varying degrees of performance growth, but the situation of internal volume in the industry is also intensifying.
On January 5, Citic Securities Company Limited(600030) announced the pre increase of performance early. According to the data, Citic Securities Company Limited(600030) in 2021, the revenue was 76.57 billion yuan, an increase of 40.8%, and the net profit increased by 54.2% to 22.979 billion yuan. This fully demonstrates the siphon effect of leading securities companies and continues to sit firmly on the champion.
Subsequently, Guotai Junan Securities Co.Ltd(601211) securities and China Merchants Securities Co.Ltd(600999) also successively announced that the net profit is expected to exceed 10 billion in 2021. Among them, the revenue of Guotai Junan Securities Co.Ltd(601211) securities in 2021 was 42.669 billion yuan, an increase of 21.22%, and the net profit was 15.013 billion yuan, an increase of 34.98%; The China Merchants Securities Co.Ltd(600999) revenue increased by 21.04% to 29.386 billion yuan, and the net profit increased by 22.35% to 11.613 billion yuan.
It is worth noting that in 2021, the net profits of the four listed securities companies Orient Securities Company Limited(600958) , Everbright Securities Company Limited(601788) , Caitong Securities Co.Ltd(601108) , Zheshang Securities Co.Ltd(601878) are expected to exceed 2 billion yuan, while the unaudited financial reports (parent company) of China stock market news securities and Anxin securities show that the net profits are 4.825 billion yuan and 3.363 billion yuan respectively, basically running into the top position in the industry.
From the perspective of performance growth, in addition to Central China Securities Co.Ltd(601375) , Guosheng securities and Jianghai securities, which are small-scale and have a performance growth rate of more than 100%, several securities companies such as Orient Securities Company Limited(600958) , China stock market news securities, Citic Securities Company Limited(600030) , Founder Securities Co.Ltd(601901) , Everbright Securities Company Limited(601788) are expected to have a net profit growth rate of more than 50%.
Among the five securities companies with a year-on-year decline in net profit, Guodu securities, YueKai securities and Minmetals securities had a relatively small decline in net profit, which were 2.6%, 4.1% and 11.87% respectively; However, the net profit of Donghai securities and Zhongshan securities decreased by 56.86% and 151.54% respectively, which obviously lagged behind in the new year of the industry.
pledge against financial management
the performance of many bond businesses increased significantly
By comparing the performance forecast of securities business, it is not difficult to find an obvious context – securities companies with good performance in 2021 generally have made great achievements in wealth management business, “wealth content” seems to have become an important indicator for mining high-performance securities companies.
For example, among the 26 securities companies with statistics, Orient Securities Company Limited(600958) net profit growth reached 85% ~ 105%, which is far ahead. Gao Gao, chief analyst of non bank financial industry of Kaiyuan securities, said that Orient Securities Company Limited(600958) wealth management and public fund-raising management business have obvious first mover advantages and fully benefit from the expansion of wealth management market space. It is expected that the net profit of large wealth management business line (consignment + its holding and participation in public funds) will reach 2.7 billion in 2021, an increase of 41% and a profit contribution of 50%.
Backed by the parent company China stock market news, the property of China stock market news securities wealth management business with the same significant increase in performance is more obvious, which is reflected in the increase of market share of related businesses. According to the data, the handling fee and commission income of China stock market news securities increased by 52% to 4.55 billion yuan in 2021, which continued to be faster than the market growth, and the market share further increased; The net interest income reached 1.75 billion yuan, an increase of 38.6%. The scale of financed funds was 42 billion yuan, an increase of 42%. The share of the two financial markets further rose to 2.3%.
Founder Securities Co.Ltd(601901) the net profit in 2021 is expected to be 1.645 billion yuan ~ 1.865 billion yuan, an increase of 50% ~ 70%, which may also be related to the accelerated layout of wealth management business. According to the relevant person in charge of Founder Securities Co.Ltd(601901) wealth management business, 14 new business departments will be established in Founder Securities Co.Ltd(601901) in 2021 to increase the coverage of economically developed and densely populated areas; At the same time, encourage all staff to obtain investment consulting qualification, strengthen the construction of product investment and research team, and realize the increase of product sales revenue by more than 50%.
“From the perspective of profit driving force, the main reason for the high growth of profit in 2021 is the high growth of wealth management business, and wealth management brings the high growth of institutional management scale, which will bring the rapid growth of institutional business of securities companies in the future.” Guotai Junan Securities Co.Ltd(601211) Liu Xinqi, chief analyst of non bank, believes that in the non bank sector, securities companies have more investment value, especially in 2022. He still recommends the investment logic of the main line of institutional business derived from wealth management.
risk drag
performance decline of some securities companies
It should be noted that although more than 80% of the securities companies said that their performance was expected to be happy in 2021, the net profits of five securities companies fell year-on-year, and even Zhongshan securities suffered losses.
From the data, the net profits of Guodu securities, YueKai securities and Minmetals securities decreased relatively slightly, 2.6%, 4.1% and 11.87% respectively, but the net profits of Donghai securities and Zhongshan securities decreased by 56.86% and 151.54% year-on-year respectively.
Looking behind the decline in performance, Donghai securities and Zhongshan securities have had frequent risks in the past two years.
As the controlling shareholder of Zhongshan securities, Guangdong Golden Dragon Development Inc(000712) once mentioned in the 2021 semi annual report that Zhongshan securities received the administrative supervision letter from the regulatory department in August 2020, and the new capital consuming business was suspended, resulting in a large decline in operating income. In addition, the valuation of some bonds held by Zhongshan securities fell, resulting in losses from changes in fair value.
At that time, Shenzhen Securities Regulatory Bureau required Zhongshan securities to suspend the filing of new capital management products within one year, suspend new capital consuming businesses, suspend counterparty transactions with related parties with its own funds or asset management funds, and order to restrict the chairman, President and compliance director of Zhongshan securities from receiving remuneration other than basic salary such as performance bonus in 2019.
China Securities Association information also shows that Zhongshan securities currently has 12 directors, supervisors and senior executives, including the chairman, President, board secretary, chief financial officer and four vice presidents, all of which are changes after the above punishment announcement. The management changed greatly, the businesses such as asset management, credit and self support were stopped by regulators, and the classified rating was reduced to CCC in 2021… Under the multiple influence, Zhongshan securities had a difficult time last year.
On the other hand, on January 11 not long ago, Donghai securities announced that it disclosed the bond trading dispute with Sichuan Languang Development Co.Ltd(600466) for the first time. In July 2019, Donghai securities purchased a total of 100 million yuan of “Blu ray bonds” through its four asset management plans and has held them so far. Now, due to the material breach of Blu ray bonds, Donghai securities filed a lawsuit to the court, requiring its issuer to pay the principal, interest and overdue fine of 118 million yuan. This is equivalent to nearly 80% of the company’s net profit of 151 million yuan in 2021.
Due to the impact of multiple risk events, the business of Donghai securities has been difficult in the past two years. According to the annual report, there were 10 investigations and 5 penalties in 2019 and 2020, respectively, involving investment banking, asset management and other business lines. According to the unaudited financial report in 2021, the net income from handling fees and commissions of Donghai securities was 953 million yuan, a decrease of 42 million yuan; Net interest income decreased by 114 million yuan to 18 million yuan; The income from changes in fair value is even -487 million yuan, while in the same period in 2020, this figure is still 472 million yuan, which has become the biggest constraint on performance growth. On April 29, 2020, due to the violation of asset management business exhibition, Donghai securities was also taken by Jiangsu securities regulatory bureau to suspend the addition of private asset management products for six months (which was resumed in February 2021).
