On the evening of March 27, Orient Securities (600958. SH) 2023 annual report debuted. Affected by the business cycle of brokerage, investment banking, and asset management, its revenue and net profit have continued to decline since 2022.
In 2023, Orient Securities will achieve revenue of 17.090 billion yuan, a year-on-year decrease of 8.75%, a net profit attributable to shareholders of the parent company of 2.754 billion yuan, a year-on-year decrease of 8.53%, and a net profit attributable to shareholders of the parent company of 2.628 billion yuan, a year-on-year decrease of 8.04%.
Orient Securities explained in the annual report that the main reasons for the decline in revenue were: net fee income decreased year-on-year during the reporting period, securities investment business income increased year-on-year, and the revenue and cost of commodity sales of subsidiaries decreased simultaneously.
According to the 2023 profit distribution plan released by Orient Securities on the same day, the basic earnings per share in 2023 will be 0.3 yuan, and it is planned to distribute a cash dividend of 1.5 yuan (including tax) to all shareholders for every 10 shares, with a total cash dividend of 1.269 billion yuan, accounting for 46.09% of the net profit attributable to the parent company in 2023.
Among the 8 brokerages that have released their 2023 annual reports and distribution plans, Orient Securities intends to distribute cash dividends to account for 46.08% of the net profit attributable to the parent company in 2023, which is at a high level, second only to Guohai Securities (000750. SZ) and Guolian Securities (601456. SH) of 59.91%.
Data source: Compiled according to the announcement of listed companies
In terms of business, in addition to the management headquarters and other businesses, the revenue of the four main businesses of Orient Securities (investment management, brokerage and securities finance, securities sales and trading, and investment banking) has declined to varying degrees. Among them, the management headquarters and other businesses mainly include headquarters capital business, overseas business and financial technology, with a total revenue of 2.908 billion yuan, a year-on-year increase of 38.87%, and a gross profit margin of 47.01%, an increase of 25.41 percentage points over the previous year.
Orient Securities' main business income in 2023
Data source: annual reports of listed companies
In 2023, the revenue of Orient Securities' brokerage and securities finance business will be 2.769 billion yuan, accounting for 48.46% of the total revenue, and in the same period of 2022, the revenue will be 11.392 billion yuan, accounting for 56.27% of the total revenue. While revenue fell sharply, this business also became the only business of Orient Securities to fall into a loss in 2023, with a gross profit margin of -0.87%.
Judging from the annual report data, in 2023, the market share of Orient Securities' brokerage business revenue will be 1.63%, which will remain the same as the previous two years, and both will rank 20th in the industry. As of the end of 2023, the total number of customer fund accounts of Orient Securities was 2.69 million, a year-on-year increase of 10.30%, and the total assets under custody were 737.8 billion yuan, a decrease of 28.693 billion yuan from the same period in 2022.
Affected by the slowdown in the overall listing process of the industry, in 2023, the investment banking business of Orient Securities will achieve revenue of 1.517 billion yuan, a year-on-year decrease of 19.35%, 15 equity financing projects will be completed throughout the year, a year-on-year decrease of 9, and the lead underwriting amount will be 12.930 billion yuan, a year-on-year decrease of 44.69%.
From the perspective of investment management business, in 2023, the investment management business of Orient Securities will achieve operating income of 2.769 billion yuan, a year-on-year decrease of 25.50%, which is the business with the largest decline in revenue, of which the net fee income of asset management business will be 2.028 billion yuan, a year-on-year decrease of 23.31%.
Zheshang Securities released a research report that the pressure on the asset management business of Orient Securities is mainly caused by factors such as stock market shocks and the reduction of the management fee rate of public fund equity products, but the third stage of the follow-up public offering rate reform is expected to reduce the trailing commission rate of consignment sales, which is partly to hedge the impact of the decline in management fees, which is conducive to the return of the asset management business to normal.