At the end of April, the first quarterly report of the brokerage entered an intensive disclosure period. On April 28, Guoyuan Securities released its first quarter report for 2024, with revenue and net profit declining year-on-year. Including Guoyuan Securities, public data shows that as of now, a total of 25 A-share directly listed brokerages and brokerage concept stocks have released reports for the first quarter of 2024, of which more than 60% of the operating income of institutions has declined year-on-year, and more than 70% of the net profit attributable to the parent company has declined year-on-year. Overall, 15 of the above 25 institutions saw a year-on-year decline in revenue and net profit, due to market fluctuations. Some industry insiders pointed out that in the context of the downturn in the market environment, the proprietary business and brokerage business of brokerages will also be affected to a certain extent. At the same time, the development of the brokerage industry has further caused the above situation.
10 brokerages have operating income of more than 1 billion yuan
On April 28, Guoyuan Securities released its report for the first quarter of 2024. According to the data, as of the end of the first quarter, Guoyuan Securities achieved operating income of 1.404 billion yuan, down 9.41% year-on-year, and net profit attributable to the parent company was 463 million yuan, down 10.98% year-on-year. Guoyuan Securities pointed out in a quarterly report that the year-on-year decline in revenue and net profit was mainly due to market fluctuations and the decline in the valuation of the company's equity investment and equity projects co-invested by subsidiaries.
At present, the first quarterly report of the brokerage has entered an intensive disclosure period. According to data from Oriental Wealth Choice, as of April 28, 25 of the 50 brokerages and brokerage concept stocks listed on the A-share market have released their reports for the first quarter of 2024.
On the whole, including Guoyuan Securities, a total of 10 brokerages currently have operating income of more than 1 billion yuan in the first quarter of 2024. Among them, CITIC Securities leads the rest of the institutions with an operating income of up to 13.755 billion yuan, and is also the only brokerage with an operating income of more than 10 billion yuan in the first quarter. Haitong Securities and China Merchants Securities temporarily ranked second and third with operating income of 4.762 billion yuan and 4.299 billion yuan respectively. During the same period, Industrial Securities, Founder Securities, Dongxing Securities, Western Securities, Guojin Securities, and Caitong Securities had operating income of more than 1 billion yuan in the first quarter.
From the perspective of growth rate, there are currently 9 institutions with a year-on-year increase in operating income, of which Dongxing Securities doubled, with an operating income of 1.98 billion yuan in the first quarter, a year-on-year increase of 112.56%. In addition, there are 8 brokerages and brokerage concept stocks such as Xiangcai Shares, Zhongyuan Securities, and Nanjing Securities to achieve year-on-year growth in operating income in the first quarter.
In other words, there are still more than sixty percent of institutions in the first quarter of the year-on-year decline in operating income, of which Haitong Securities, Industrial Securities, Huaxi Securities, Pacific Securities all fell by more than 40% year-on-year, down 44.11%, 42.99%, 42.55%, 40.47% respectively.
As for the reasons for the year-on-year decline in performance, Haitong Securities pointed out in the first quarterly report that it was mainly due to the decrease in operating income such as investment income and other business income. Huaxi Securities also mentioned that the year-on-year decline in operating income was mainly affected by market conditions, and investment-related income decreased. Pacific Securities said that the year-on-year decline in operating income was mainly caused by the decrease in income from securities investment business.
More than seventy percent of the net profit attributable to the parent company declined year-on-year
While the operating income of most brokerages and brokerage concept stocks declined year-on-year, the net profit attributable to the parent of relevant institutions was not optimistic. According to the data of Oriental Wealth Choice, among the 25 brokerages and brokerage concept stocks that currently disclose their quarterly reports, only CITIC Securities, China Merchants Securities, and Oriental Fortune have net profit attributable to the parent company of more than 1 billion yuan, which is 4.959 billion yuan, 2.157 billion yuan, and 1.954 billion yuan respectively.
In contrast, there are also Xiangcai shares, Huaxin shares, Hualin Securities, Pacific Securities, Guosheng Financial Holding's net profit attributable to the parent company in the first quarter is less than 100 million yuan, ranking low among the 25 institutions, respectively 90.6346 million yuan, 59.6089 million yuan, 54.8272 million yuan, 34.8317 million yuan, and 23.0067 million yuan.
In terms of growth rate, only Zhongyuan Securities, Dongxing Securities, Founder Securities, Capital Securities, Nanjing Securities, and First Capital Securities achieved year-on-year growth in net profit attributable to the parent company in the first quarter. In the same period, more than seventy percent of institutions experienced a year-on-year decline. Specifically, the net profit attributable to the parent company of Haitong Securities, Industrial Securities, Huaxi Securities and Pacific Securities all fell by more than 60% year-on-year, of which Pacific Securities fell by 76.61% year-on-year, temporarily at the bottom.
Pacific Securities pointed out in the first quarterly report that the year-on-year decline in net profit attributable to the parent company was mainly due to the decrease in operating income in the current period. Industrial Securities mentioned that since the beginning of this year, the domestic and foreign situation has become more complex and changeable, the pace of IPO issuance has slowed down, the performance of major indices in the A-share market has not been as good as the same period last year, and the trading activity has not performed well, resulting in a year-on-year decline in the company's single-quarter net operating income due to the decrease in net income from fees and commissions, and investment income.
Judging from the current disclosure of the quarterly report data, a total of 15 brokerages in the first quarter of the operating income and net profit attributable to the parent company declined year-on-year, however, in the same period, there were also Zhongyuan Securities, Dongxing Securities, Founder Securities, Capital Securities, Nanjing Securities 5 institutions to achieve two data year-on-year growth.
Financial commentator Guo Shiliang said that the decline in net profit of brokerage revenue in the first quarter was, on the one hand, affected by the downturn in the market environment, and the proprietary business and brokerage business of brokerages were affected to a certain extent. On the other hand, it is related to the intensification of differentiation in the development of the brokerage industry, especially since the beginning of this year, the IPO has slowed down, and the sponsorship business income of brokerages has also been affected. And as regulation intensifies, so does accountability.
"The above background will accelerate the pace of 'reshuffle' in the brokerage industry, and will also promote the formation of a situation of intensified differentiation and development in the industry. The performance of brokerage stocks in the future depends not only on the expectation that the market environment can improve, but also on the tightening of IPO policies. Guo Shiliang said.
Yang Delong, chief economist of Qianhai Open Source Fund, also mentioned that the current signs of foreign capital inflow into the market are more obvious, and the confidence of investment is gradually improving.
Beijing Business Daily reporter Li Haiyuan