CFIC Introduction
As of April 27, nearly half of the A-share listed securities firms have disclosed their "report cards" for the first quarter of this year. Under the influence of factors such as secondary market shocks, the performance of most brokerages in the first quarter was under pressure, and the performance differentiation between different brokerages was very obvious, while some small and medium-sized brokerages achieved positive growth in performance with excellent investment returns.
Original title: The three major characteristics are obvious! The first quarterly report of the brokerage company was unveiled
On the evening of April 27, more than 10 listed securities companies intensively disclosed their quarterly reports. As of April 27, nearly half of the A-share listed securities firms have disclosed their "report cards" for the first quarter of this year. Under the influence of factors such as secondary market shocks, the performance of most brokerages in the first quarter was under pressure, and the performance differentiation between different brokerages was very obvious, while some small and medium-sized brokerages achieved positive growth in performance with excellent investment returns.
The positive impact of the policy has superimposed the new progress of the merger of Guolian Securities and Minsheng Securities, and the brokerage sector has recently risen significantly. From the perspective of allocation, the leading securities firms with competitive advantages on the investment side and the targets related to mergers and acquisitions are the main lines worth grasping in the eyes of institutions.
The differentiation was obvious under the overall pressure
Judging from the 19 listed brokerages that have disclosed their first quarter reports in 2024, the differentiation trend of A-shares in the first quarter of this year has brought a lot of challenges to the proprietary business of brokerages.
First, the overall pressure is obvious. Wind data shows that among the 19 listed brokerages, only 6 revenue increased over the same period last year, and only 6 brokerages saw a year-on-year increase in net profit attributable to the parent company; among the brokerages with declining performance, 12 revenue and net profit attributable to the parent both suffered a decline, and most brokerages revenue and net profit fell by more than 10%, and some brokerages also achieved double-digit growth in revenue year-on-year and double-digit decline in net profit year-on-year.
Second, there is a clear differentiation between brokerages with declining performance. Among the 19 listed brokerages, the year-on-year decline in revenue in the first quarter ranged from 2.66% to 44.11%, with a median decline of about 23%;
Third, the performance of some small and medium-sized brokerages has strengthened against the trend. Among the 19 brokerages mentioned above, 5 achieved a bumper harvest of revenue and net profit in the first quarter of this year, and the growth rate was more than double digits;
Specifically, in the first quarter, Dongxing Securities achieved revenue of 1.98 billion yuan, a year-on-year increase of 112.56%, and the net profit attributable to the parent company was 360 million yuan, a year-on-year increase of 64.28%; Zhongyuan Securities achieved revenue of 644 million yuan, a year-on-year increase of 38.93%, and a net profit attributable to the parent company of 131 million yuan, a year-on-year increase of 85.53%; Nanjing Securities achieved revenue of 882 million yuan, a year-on-year increase of 37.21%, and a net profit attributable to the parent company of 263 million yuan, a year-on-year increase of 21.21%; Capital Securities achieved revenue of 564 million yuan, a year-on-year increase of 29.85%, and a net profit attributable to the parent company of 220 million yuan, a year-on-year increase of 25.22%, while Founder Securities achieved revenue of 1.985 billion yuan, a year-on-year increase of 11.97%, and a net profit attributable to the parent company of 784 million yuan, a year-on-year increase of 41.06%.
It is worth noting that the main reason for the change in revenue and net profit of brokerages in the first quarter is closely related to investment income, affected by market conditions, some brokerages have experienced a decline in performance due to changes in the fair value of financial investment, and some brokerages have achieved growth in performance by virtue of the increase in investment business income, and the level of "stock speculation" between different brokerages has shown obvious differences.
19 brokerages reported results in the first quarter
Source: Wind
Pay attention to the top securities firms and M&A targets
From an investment point of view, the current fundamental pressure of the brokerage sector has been expected by institutions, and the investment value of the outlook comes more from the care of policies and the expected rise of the industry's own mergers and acquisitions, which has also become the main line of layout that institutions are more concerned about.
On April 26, the news of the new progress in the restructuring and integration of Guolian Securities and Minsheng Securities directly promoted the sharp rise of the brokerage sector. Wind data shows that as of the close of trading on April 26, the brokerage index rose 6.32% in a single day, setting a new high in the daily growth period. Guolian Securities' A-shares were suspended, but its Hong Kong stock price rose by more than 25%, and the intraday stock price hit a new high.
Based on the development of the securities industry itself, China Merchants Securities believes that it is not appropriate to fall into excessive pessimism about the development of the industry. Whether it is a comprehensive brokerage, a small and medium-sized brokerage with research business as the core, or a local brokerage that relies on local capital, deeply cultivates the region, and creates a differentiated local brokerage, it occupies a certain unique advantage in this round of industry clearance, and there is the possibility of outperforming the industry and opening the second growth curve. Looking to the future, with the restoration of investor confidence, sustained and high-quality economic development, reasonable and abundant liquidity, the securities sector will not be absent either.
Judging from the position of the public fund in the first quarter, Founder Securities said that due to the pessimistic expectations such as the previous business tightening, the current active equity fund has a significant underweight in the brokerage sector, while Guolian Securities' merger and acquisition of Minsheng Securities and the policy report proposed to concentrate on building a financial "national team".
For the specific allocation of targets, Guotai Junan Securities believes that with the recent introduction of the new "National Nine Articles", the head brokerage company has added an extension development model to enhance its professional service capabilities, accelerate the construction of a first-class investment bank, and recommend the head brokerage with competitive advantages on the investment side and the target related to mergers and acquisitions.
Source of this article: China Securities Journal
Author: Hu Yu
WeChat editor: Liu Sile
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