In the first quarter of this year, the decline in performance has become a relatively common situation in the securities industry, and the growth rate of many business lines of various brokerages has declined. The first month of the second quarter has passed, as the market warms up, will the major businesses turn around?
As of April 29, the first quarterly reports of 50 listed brokerage stocks have all been disclosed, and among the 50 brokerage stocks, 43 have a negative growth rate, accounting for 86% of the year-on-year decline in brokerages. Three brokerage stocks lost money in the first quarter, namely Jinlong shares, Guolian Securities, and Tianfeng Securities. The year-on-year revenue growth rate of 41 brokerages was negative, and the year-on-year decline accounted for 82%.
In terms of performance attribution, most of the main businesses of brokerages in the first quarter showed varying degrees of decline in growth. Specifically:
First, in terms of brokerage business, affected by the market, the brokerage business of brokerages, which accounted for 90.91%, declined;
Second, in terms of investment banking business, affected by the tightening of IPO policies, the year-on-year growth rate of the investment banking business of securities firms, which accounted for 75%, declined, and the investment banking business of the leading brokerages CICC, Huatai Securities, Shenwan Hongyuan, China Merchants Securities, Haitong Securities, CITIC Securities, and China Securities Construction Investment Banking all suffered significant setbacks;
Third, the performance of the asset management business is different, with the number of positive brokerages with a positive year-on-year growth rate slightly more than that of negative brokerages;
Fourth, in terms of interest-related business, accounting for 79.55% of the brokerage's net interest income in the first quarter, the year-on-year growth rate of the brokerage's net interest income was negative, and the net interest income of a quarter of the brokerage was negative in the first quarter, mainly due to two aspects, the average daily balance of the securities lending market in the first quarter fell by 42.64% year-on-year, and the tightening of the refinancing system;
Fifth, in terms of proprietary business, the year-on-year growth rate of brokerage firms, which accounted for 84.09%, was negative.
Nearly ninety percent of brokerage net profit growth declined
The top 10 brokerages in the first quarter report of the net profit attributable to the parent company were determined by CITIC Securities (4.959 billion yuan), Guotai Junan (2.489 billion yuan), Huatai Securities (2.291 billion yuan), China Merchants Securities (2.157 billion yuan), Oriental Fortune (1.954 billion yuan), China Galaxy (1.631 billion yuan), GF Securities (1.538 billion yuan), Shenwan Hongyuan (1.388 billion yuan), CICC (1.239 billion yuan), Guosen Securities (1.229 billion yuan).
China Securities Construction Investment and Haitong Securities fell out of the top ten, ranking 11th and 12th respectively, and the net profit attributable to the parent company in the first quarter of this year was 1.228 billion yuan and 911 million yuan respectively.
The net profit attributable to the parent company in the first quarter of 11 brokerages was less than 100 million yuan, of which 3 brokerages lost money, namely Jinlong shares (-101 million yuan), Guolian Securities (-219 million yuan), and Tianfeng Securities (-376 million yuan).
Will the performance loss affect the current restructuring with Minsheng Securities? Guolian Securities said that the company's performance fluctuations in the short term will not affect the restructuring work. At present, there are periodic performance fluctuations, mainly due to short-term extreme market conditions, and the company's performance is expected to be repaired as market sentiment picks up.
In addition, Guolian Securities also said that the business of the company and Minsheng Securities has its own characteristics, and its resource advantages are highly complementary, and it is expected to integrate capital, talents, business, customers and other resources in the future to achieve optimal allocation, form a joint force for development and economies of scale, bring leapfrog growth to various businesses, and the operating performance will be more stable, so as to achieve "1+1>2", thereby promoting leapfrog development.
The net profit attributable to the parent company of five brokerages in the first quarter had a higher year-on-year growth rate, namely Founder Securities (41.06%), Dongxing Securities (64.28%), Nanjing Securities (21.21%), Capital Securities (25.22%), and Zhongyuan Securities (85.53%).
In addition to loss-making brokers, 10 brokerages in the first quarter of the net profit attributable to the parent fell by more than or close to 50% year-on-year, namely Northeast Securities (-94.35%), Huachuang Yunxin (-86.28%), Pacific (-76.61%), Zhongtai Securities (-71.25%), Huaxi Securities (-68.6%), Haitong Securities (-62.56%), Industrial Securities (-60.38%), Guohai Securities (-58.66%), China Securities Construction Investment (-49.39%), Guosheng Financial Holding (-49.07%).
In terms of revenue scale in the first quarter, the top ten brokerages are CITIC Securities (13.755 billion yuan), Guotai Junan (7.983 billion yuan), China Galaxy (7.214 billion yuan), Huatai Securities (6.105 billion yuan), Shenwan Hongyuan (5.68 billion yuan), GF Securities (4.949 billion yuan), Haitong Securities (4.762 billion yuan), China Merchants Securities (4.299 billion yuan), China Securities Construction Investment (4.294 billion yuan), and Zheshang Securities (3.882 billion yuan).
CICC failed to enter the top 10 in terms of revenue scale, ranking 11th, and the company's revenue in the first quarter was 3.874 billion yuan.
Among the 50 brokerages, 9 had a positive year-on-year growth rate in revenue in the first quarter, and 41 had a negative growth rate, accounting for 82%. The top brokerages with year-on-year growth rate are Dongxing Securities (112.56%), Zhongyuan Securities (38.93%), Nanjing Securities (37.21%), and Capital Securities (29.85%).
The five brokerage stocks with a large year-on-year decline in revenue in the first quarter were Haitong Securities (-44.11%), Shanxi Securities (-44.64%), Guolian Securities (-74.44%), Tianfeng Securities (-86.80%), and Jinlong (-87.75%).
More than ninety percent of brokerage firms declined
The performance of the A-share market in the first quarter directly affected the brokerage business of brokerages, and the overall performance was poor.
In the first quarter of this year, the top 10 brokerages in net income from brokerage business were CITIC Securities (2.442 billion yuan), Guotai Junan (1.499 billion yuan), Huatai Securities (1.358 billion yuan), GF Securities (1.358 billion yuan), China Merchants Securities (1.319 billion yuan), China Galaxy (1.256 billion yuan), China Securities Construction Investment (1.254 billion yuan), Guosen Securities (1.079 billion yuan), Shenwan Hongyuan (1.024 billion yuan), and Haitong Securities (851 million yuan).
In the first quarter, there were 5 brokerages with a net income of less than 100 million yuan, namely the first venture (84 million yuan), Pacific (79 million yuan), Capital Securities (48 million yuan), Jinlong shares (47 million yuan), and Hongta Securities (41 million yuan).
Among the 44 comparable brokerages, only 4 brokerages had a positive growth rate in brokerage business net income in the first quarter, and the other 40 had a negative growth rate, accounting for 90.91%.
The four brokerages with positive growth rates are Caida Securities (12.49%), Caitong Securities (8.24%), Hualin Securities (7.66%), and Nanjing Securities (0.39%)
In the first quarter, the five brokerages with a large year-on-year decline in brokerage net income were Capital Securities (-17.55%), Industrial Securities (-23.44%), Orient Securities (-30.10%), CICC (-32.77%), and Tianfeng Securities (-33.92%).
The tightening of IPOs has led to a general decline in investment banking revenue
Affected by the slowdown in IPO issuance and private placement, the performance of investment banking business has been sluggish since the beginning of this year.
In the first quarter, the net income of the top ten brokerage companies in the first quarter did not cross the threshold of one billion, and it should be known that in the same period last year, there were two brokerages whose income exceeded 1 billion yuan, namely CITIC Securities (1.98 billion yuan) and CITIC Construction Investment (1.099 billion yuan).
In the first quarter of this year, the top 10 brokerages in terms of revenue were CITIC Securities (869 million yuan), Guotai Junan (642 million yuan), Huatai Securities (576 million yuan), CICC (450 million yuan), China Securities Construction Investment (448 million yuan), Haitong Securities (413 million yuan), Orient Securities (273 million yuan), Zhongtai Securities (252 million yuan), Everbright Securities (249 million yuan), and Soochow Securities (231 million yuan).
Guojin Securities, which ranked 8th in the first quarter of last year, and Industrial Securities, which ranked 9th, ranked 11th and 18th respectively in the first quarter of this year.
As many as 25 brokerages had a net income of less than 100 million yuan in investment banking business in the first quarter, of which two brokerages had an income of less than 10 million yuan, namely Zhongyuan Securities (0.07 billion yuan) and Hualin Securities (0.03 billion yuan).
Among the 44 brokerages, 11 brokerages had a positive year-on-year growth rate in net income from investment banking business in the first quarter, and 33 were negative, accounting for 75%.
The base is small, so that where there are investment banking projects can be completed, considerable growth can be generated, but there are also 3 large securities companies The changes in the investment banking business are gratifying, and the scale of related income is relatively large, namely Galaxy Securities, GF Securities, and Everbright Securities, specifically:
China Galaxy's net income from investment banking in the first quarter was 95 million yuan, an increase of 65.15% year-on-year;
GF Securities' net income from investment banking in the first quarter was 148 million yuan, an increase of 47.25% year-on-year;
Everbright Securities' net investment banking income in the first quarter was RMB249 million, up 29.51% year-on-year.
Among the 33 brokerages with a year-on-year decline in net income from investment banking business in the first quarter, there are many large brokerages, namely CICC (-25.02%), Huatai Securities (-26.05%), Shenwan Hongyuan (-41.01%), China Merchants Securities (-43.32%), Haitong Securities (-54.37%), CITIC Securities (-56.11%), and China Securities Construction Investment (-59.25%).
The tightening of IPO and strict regulatory policies have led to a general decline in the income of brokerage investment banks.
Since the "phased tightening of IPOs" was proposed on August 27 last year, the regulators have always maintained high pressure on IPO control, and regulatory policies such as the "827 New Deal", "315 New Deal", and the new "National Nine Policies" have emerged one after another. Premier Li Qiang of the State Council stressed in an important meeting that it is necessary to improve key systems such as issuance, trading and delisting, promote a virtuous cycle of investment and financing and a dynamic balance of listing and delisting, and strive to improve the quality of listed companies and strictly control the entry of issuance and listing.
Statistics show that the total scale of stock financing in the first quarter was 77.6 billion yuan, down 77 percent year-on-year; of which the total amount of IPO funds raised was only 2.43 billion yuan, as high as more than 20 billion yuan in the same period last year; the total amount of funds raised by listed companies was 40.9 billion yuan, a year-on-year decrease of 78.71 percent; the convertible bonds raised 8.6 billion yuan, a year-on-year decrease of 79.45 percent; in the first quarter, no allotment and preferred stock projects were issued, and there was one allotment project in the same period last year.
In order to avoid the impact of the decline of investment banking business, securities companies have taken active actions, one is to reduce the number of investment banking personnel, and greatly reduce various expenses;
8 brokerages bucked the trend and achieved a high growth rate
In the first quarter of this year, the top 10 brokerages in terms of net income from asset management business were CITIC Securities (2.358 billion yuan), GF Securities (1.607 billion yuan), Huatai Securities (1.106 billion yuan), Guotai Junan (918 million yuan), Zhongtai Securities (480 million yuan), Haitong Securities (402 million yuan), Orient Securities (361 million yuan), Caitong Securities (319 million yuan), China Securities Construction Investment (278 million yuan), and CICC (268 million yuan).
Among the 44 brokerages, 21 brokerages had a net income of less than 100 million yuan in the first quarter of asset management business, of which 6 brokerages had related income of less than 10 million yuan, namely Hualin Securities (08 million yuan), Hongta Securities (07 million yuan), Great Wall Securities (07 million yuan), Zhongyuan Securities (07 million yuan), Southwest Securities (06 million yuan), and Jinlong shares (003 million yuan).
Among the 44 brokerages, 24 had a positive year-on-year growth rate in net income from asset management business in the first quarter, and the other 20 had a negative growth rate.
In the first quarter, the net income of asset management business exceeded 100 million yuan, and there were 8 securities firms with a high growth rate, namely Guolian Securities (350.47%), Capital Securities (211.69%), Northeast Securities (115.58%), China Securities Construction Investment (75.65%), Guosen Securities (68.93%), Zheshang Securities (59.67%), Zhongtai Securities (56.50%), and Huaan Securities (35.90%).
In the first quarter of this year, the stock market was up and down, the bond market was bullish, and the asset management scale of securities companies rose steadily. On April 26, data disclosed by the AMAC showed that as of the end of March, the scale of existing products of securities companies and their asset management subsidiaries was 5.35 trillion yuan, a slight increase from 5.3 trillion yuan at the end of last year.
The sharp decline in securities lending and the tightening of refinancing securities led to a decline in the net interest income of brokers
The top 10 brokerages in net interest income in the first quarter were China Galaxy (930 million yuan), Haitong Securities (872 million yuan), Everbright Securities (483 million yuan), GF Securities (438 million yuan), Changjiang Securities (428 million yuan), Zhongtai Securities (369 million yuan), Guotai Junan (350 million yuan), Guoyuan Securities (342 million yuan), CITIC Securities (325 million yuan), and Orient Securities (299 million yuan).
Among the 44 comparable brokerages, as many as 11 brokerages or listed parent companies lost net interest income in the first quarter, accounting for as much as 25%, namely Great Wall Securities (-03 million yuan), Northeast Securities (-22 million yuan), Capital Securities (-26 million yuan), Guolian Securities (-27 million yuan), Shanxi Securities (-44 million yuan), Western Securities (-66 million yuan), Shenwan Hongyuan (-85 million yuan), Jinlong shares (-92 million yuan), Tianfeng Securities (-452 million yuan) and CICC (-594 million yuan).
Among the 44 brokerages, 9 had a positive year-on-year growth rate in net interest income in the first quarter, and 35 had a negative growth rate, accounting for 79.55%.
The 9 brokerages with positive growth rates are Caida Securities (916.18%), Hongta Securities (26.51%), Western Securities (24.34%), Everbright Securities (14.49%), Southwest Securities (10.32%), Guohai Securities (9.98%), Pacific (5.11%), Caitong Securities (3.92%), and Zhongtai Securities (1.21%).
GF Securities said that the interest expense on selling and repo increased and the interest income from margin financing decreased in the current period. Guotai Junan said that interest expenses mainly increased on interest-paying liabilities, while interest income declined. Explaining the decline in net interest income, CITIC Securities said that interest expenses payable on short-term financing bonds and sales and repurchases increased year-on-year. China Merchants Securities said that interest expenses on repurchase business increased. Industrial Securities explained that it was mainly due to the year-on-year increase in interest expenses on bonds and on the sale and repurchase of financial assets.
In the first quarter of this year, the scale of the two financial balances of the three major exchanges in Shanghai, Shenzhen and North shrank, with an average daily balance of 1.55 trillion yuan, down 1.52% year-on-year, of which the daily financing balance was 1.49 trillion yuan, a slight increase of 1.12% year-on-year, and the average daily balance of securities lending was 54.295 billion yuan, down 42.64% year-on-year.
The tightening of the refinancing securities system has affected the net interest income of securities companies to a certain extent.
On 6 February, a spokesman for the China Securities Regulatory Commission (CSRC) said in response to a reporter's question on the "two financings" securities lending business that it proposed measures to further strengthen supervision over the securities lending business in three aspects: First, suspend the scale of refinancing securities of new securities companies in accordance with the law, and gradually close the stock; second, require securities companies to strictly prohibit the provision of securities lending to investors who use securities lending and borrowing to carry out intraday rotation transactions (disguised T+0 transactions); and third, crack down on illegal activities such as using securities lending and borrowing transactions to carry out improper arbitrage.
On January 28 this year, the China Securities Regulatory Commission (CSRC) further optimized the securities lending mechanism, one of which was to adjust the market-based declaration of refinancing securities from real-time to next-day availability, restricting the efficiency of securities lending and lending. Due to factors such as system adjustments, it will be implemented from March 18.
On October 14 last year, the Shanghai and Shenzhen North Stock Exchanges issued the Notice on Optimizing the Relevant Arrangements for Securities Lending and Lending Transactions and Refinancing Securities Lending Transactions, which clarified that "if an investor holds restricted shares of a listed company, a strategic placement share, or a major shareholder or a specific shareholder who has reduced his or her shareholding by way of block trading, the investor and its affiliates shall not sell the shares of the listed company by securities lending during the restriction period", further improving the requirement that "restricted shares shall not be allowed to be borrowed or lended".
More than eighty percent of brokerages have lost their proprietary growth rate
In the first quarter, the top 10 brokerages in proprietary business income were CITIC Securities (5.46 billion yuan), Shenwan Hongyuan (2.755 billion yuan), Guotai Junan (2.376 billion yuan), China Merchants Securities (2.049 billion yuan), Huatai Securities (1.881 billion yuan), CICC (1.853 billion yuan), China Galaxy (1.629 billion yuan), China Securities Construction Investment (1.507 billion yuan), Guosen Securities (1.464 billion yuan), Haitong Securities (1.219 billion yuan), GF Securities (1.13 billion yuan).
Corresponding to the above-mentioned self-operated income of large brokers, Guolian Securities' proprietary business income loss of 150 million, 6 brokerages in the first quarter of the self-operated income of less than 100 million yuan, specifically Bank of China Securities (90 million yuan), Pacific (69 million yuan), Hualin Securities (56 million yuan), Huaxi Securities (44 million yuan), Changjiang Securities (36 million yuan), Jinlong shares (07 million yuan).
In terms of the growth rate of proprietary business income in the first quarter of this year, 7 of the 44 comparable brokerages had a positive year-on-year growth rate, and 37 had a negative growth rate, accounting for 84.09%.
The 7 growth rates are Hualin Securities (312.64%), Dongxing Securities (136.33%), Nanjing Securities (113.60%), Founder Securities (86.55%), Zhongyuan Securities (77.40%), China Merchants Securities (18.75%), and First Capital (9.19%).
China Merchants Securities is the only brokerage firm with a relatively large net income of proprietary business and a large scale of revenue, with a self-operated income of 2.049 billion yuan in the first quarter. China Merchants Securities disclosed in its annual report last year that the company's investment business practices continue to implement the "large and stable" large-scale asset allocation strategy, coordinate asset allocation, investment decision-making and risk management from top to bottom, adjust and optimize the investment structure in a timely manner according to changes in the market situation, continue to improve business strategies, and effectively enhance the stability of investment returns.
Founder Securities' self-operating income in the first quarter was 744 million yuan, and the company said in its annual report last year that investment and trading business is the second driving force in the company's rapid development of business layout, including fixed income investment, equity investment, alternative equity investment, trading and derivatives business. During the reporting period, with the goal of "expanding scale, increasing income, and building new advantages", the company reallocated debts and lightly allotted shares, and focused on controlling business risks, so as to achieve a continuous increase in asset scale and a simultaneous increase in business income and profit.
(Reporter Gao Yanyun)
Editor-in-charge: Wang Shidan | Review: Li Zhen | Supervisor: Wan Junwei
(Source: Finance Associated Press)