With the completion of the 2021 fund annual report, the fund transaction sub-position income that has attracted much attention in the industry has also been released. As an important source of income for the research institute of securities companies, the commission sub-position income of fund companies also reflects the comprehensive strength of securities companies to a certain extent.
According to the data, from the total amount, public funds will continue to explode in 2021, and the total stock trading volume of public funds will exceed 28 trillion yuan, an increase of more than 10 trillion yuan year-on-year. The amount of commissions received by securities companies from public funds also surged from 13.9 billion yuan in the same period of 2020 to 22.2 billion yuan, an increase of nearly 60% year-on-year. Specifically, CITIC Securities, Changjiang Securities and GF Securities ranked in the top three, and the "big brother" CITIC Securities still maintained a steady position, with the annual sub-position commission reaching 1.667 billion yuan, a year-on-year growth rate of 60.81%.
According to the 2021 annual report released by CITIC Securities, the company achieved operating income of 76.524 billion yuan for the whole year, an increase of 40.71% year-on-year; net profit attributable to the mother of 23.100 billion yuan, an increase of 55.01% year-on-year; earnings per share of 1.77 yuan, an increase of 53% year-on-year. Continue to stabilize the position of the domestic "brother of the broker". The company also intends to pay a gold dividend of 5.4 yuan for every 10 shares, with a total cash dividend of 8.003 billion yuan (including tax).
Businesses continue to lead the industry
As the "leader" of the mainland securities industry, CITIC Securities has maintained a high-speed development trend in recent years. At present, CITIC Securities has become the only securities company in China with assets of more than one trillion yuan. The company's institutional business has a strong development trend in terms of two financing, income swap and derivatives business.
According to public information, CITIC Securities was founded in October 1995, listed on the Shanghai Stock Exchange in 2003, and listed on the Hong Kong Stock Exchange in 2011, making it the first securities company in China to be listed on "A+H" shares.
In 2021, thanks to the improvement of the capital market boom, CITIC Securities achieved steady growth in all businesses, and investment banking, wealth management, fixed income and other businesses continued to maintain industry leadership.
According to the annual report, CITIC Securities' operating income in 2021 was 76.524 billion yuan, an increase of 40.71% year-on-year; the net profit attributable to the mother reached 23.1 billion yuan, an increase of 55.01% year-on-year, both of which significantly exceeded the industry average; the net profit attributable to common shareholders increased by 55% year-on-year, a record high, and profitability was further improved. With the expansion of the mainland capital market, CITIC Securities, as the head securities company, has further strengthened its competitiveness.
From the perspective of business structure, the revenue contribution of CITIC Securities' various businesses is relatively even, and there are almost no shortcomings. The data shows that in 2021, the company's brokerage business, self-operated business, asset management business and investment banking business achieved revenue of 18.289 billion yuan, 18.386 billion yuan, 13.514 billion yuan and 7.753 billion yuan respectively, an increase of 27.03%, 37.14%, 41.35% and 19.5% respectively year-on-year, and still achieved high growth on the basis of a high base, and all businesses are in a leading position in the industry.
At the same time, the overall ownership scale of citic securities' public and private funds exceeded 380 billion yuan, an increase of 26% year-on-year, of which the "stock + hybrid" fund ownership scale was 104.8 billion yuan, ranking 14th among all distribution agencies and ranking first in the securities company system.
The allotment of shares has improved its ability to resist risks
Although the position of "a brother of a securities company" is very stable, in order to further enrich the company's capital and enhance its ability to resist risks, CITIC Securities recently completed a 27.3 billion yuan allotment plan.
In January 2022, CITIC Securities officially completed the allotment of shares, and its fundraising scale is the largest in the history of the securities industry. Among them, the total amount of funds raised by the A-share rights issue was 22.396 billion yuan, and the actual fundraising was 22.318 billion yuan; the total amount of funds raised by the H-share rights issue was about 4.93 billion yuan, and the actual fundraising was 4.88 billion yuan.
According to the announcement issued by CITIC Securities when disclosing its annual report, as of January 27, the actual investment amount of the company's self-raised funds in the investment project was 3.517 billion yuan, of which 1.517 billion yuan was invested to strengthen the construction of information systems and 2 billion yuan was invested to increase investment in subsidiaries.
From the perspective of the use of funds for the allotment of shares, the company intends to use about 13.318 billion yuan of funds for the development of capital intermediary business, which focuses on several business directions, one is the financing business represented by the two financing business, and the other is the QFI, FICC business, etc.
In this regard, the relevant person in charge of CITIC Securities has said that the raised funds need to go through a cyclical process from investment to production. In the short term, the rights issue may temporarily have a pull-down effect on the company's leverage level and ROE level. However, in the long run, the allotment of shares is for the company's long-term strategic layout, the different needs of capital, through the allotment, can further reduce the pressure of some of the company's business by health indicators, enhance the company's capital strength, and improve the company's ability to resist risks. Obviously, after the completion of the replenishment of the raised funds, the overall business scale and income level will be significantly improved.
Will benefit from the reform of the IPO registration system
Looking forward to the future, with its continuous core competitiveness, it is expected that CITIC Securities, as the head broker, still has a lot of room for development in the future, because the A-share full registration system has gradually approached.
According to industry analysts, CITIC Securities' investment banking business is competitive, and the scale of investment banking business shares, bonds and mergers and acquisitions ranks first. The implementation of the comprehensive registration system in 2022 will bring increments to the investment banking business of securities companies, as the head of the securities company, CITIC Securities, the current market share accounts for nearly 20%, the future after the landing of the comprehensive registration system, is expected to occupy a larger market share.
In addition, according to the requirements of the CSRC, the sci-tech innovation board plans to introduce a market maker system, and the new business pilot usually has higher requirements for the pricing and matching ability of institutions, and in this regard, the head securities company has undoubtedly taken the lead, and it is expected that CITIC Securities, as the "leader", will continue to benefit.
Credit Suisse's research report believes that with the upcoming reform of the IPO registration system in the mainland, it is believed that the institutional business of CITIC Securities will become a key catalyst, and it is estimated that the company's performance will outperform that of its peers, and it is expected that the market share of its brokerage and margin business will further increase from 7.2% to 7.8% this year.
Credit Suisse expects the market to remain moderate in the short term, but once the support policy is introduced, it may eventually turn around in the second half of the year, and CITIC Securities is expected to be more resilient based on its strong institutional business, limited targeted risk exposure and solid capital.
Maintain CITIC Securities' "outperform the broad market" rating.
Some insiders also believe that under the main tone of the comprehensive promotion of the registration system in 2022, CITIC Securities is expected to give full play to its leading and platform advantages to strengthen its equity underwriting capabilities and continuously enhance the business synergy effect of the industrial chain of large investment banks. With the steady advancement of the registration system and the continuous optimization of the reform of the superimposed capital market, CITIC Securities, as a leading securities company, is expected to seize the opportunity and achieve leapfrog development.