Zhongxin Jingwei, October 30 (Lin Jian, Yan Shuxin) It has been several years since the industry shouted out the "arrival of the era of wealth management", and every time the financial report disclosure period comes, how the performance of securities companies undergoing wealth management transformation will become one of the focus of market attention. As of the 29th, GF Securities, Industrial Securities and Orient Securities, known as the "Three Musketeers of Wealth Management", have announced this year's three quarterly reports, which have aroused the attention of the industry.
In terms of performance, the "Three Musketeers" have different sorrows and joys, GF Securities has achieved a small "bumper harvest", and Orient Securities and Industrial Securities have followed closely behind. However, all three have "planted a heel" in the self-operated business, with Industrial Securities being the most obvious.
At present, the market is pinning its hopes on the development of the three brokers on the benefits of wealth management transformation, but their performance in the secondary market is obviously different. In terms of stock price, according to iFinD data from Flush, GF Securities rose by 42.68% in the third quarter, Orient Securities rose by 55.34%, and Industrial Securities rose by only 3.80%.
Self-operated business drags down the Three Musketeers
Among the "Three Musketeers of Wealth Management", GF Securities' operating income and net profit in the first three quarters were ahead of the other two securities companies, with operating income of 26.871 billion yuan, an increase of 25.49% year-on-year, and net profit attributable to the mother of 8.641 billion yuan, an increase of 6.15% year-on-year. Orient Securities followed close behind, and surpassed GF Securities in terms of net profit growth, achieving operating income of 18.840 billion yuan and net profit attributable to shareholders of listed companies of 4.321 billion yuan, an increase of 17.37% and 41.62% respectively over the same period of the previous year. Industrial Securities temporarily lagged behind, and its total operating income in the first three quarters was 13.88 billion yuan, an increase of 2.9% year-on-year, and the net profit attributable to the mother was 3.52 billion yuan, an increase of 16.3% year-on-year.
From a single quarter, Industrial Securities has performed poorly. In the third quarter, the company achieved operating income of about 3.734 billion yuan, down 28.27% year-on-year, and net profit attributable to shareholders of listed companies of about 1.084 billion yuan, down 23.12% year-on-year. Orient Securities' operating income also declined in the third quarter, with its operating income of 5.563 billion yuan, down 13.43% year-on-year, but achieving a net profit attributable to the mother of 1.620 billion yuan, an increase of 6.27% year-on-year. In terms of GF Securities, the company's operating income and net profit in the third quarter achieved a double rise, achieving operating income of 8.863 billion yuan, an increase of 23.01% year-on-year, and net profit attributable to the mother of 2.752 billion yuan, an increase of 15.23% year-on-year.
Overall, GF Securities performed better than the other two in the third quarter, but Zhongxin Jingwei noted that all three were "planted" in their own business. According to the general rules of the securities industry, the income from the proprietary business of securities companies is calculated based on investment income plus fair value change income, and then excludes investment income from associated enterprises and joint ventures.
GF Securities' self-operated business in the first three quarters achieved a net income of 5.075 billion yuan, down 19.11% year-on-year. Among them, the company's fair value change income was only 76.36 million yuan, compared with 1.235 billion yuan in the same period last year, down more than 1.1 billion yuan year-on-year, a decline of 94%.
In the first three quarters, the income of Industrial Securities' self-operated investment business was 1.911 billion yuan, down 52.78% from the same period in 2020. Among them, the investment income was 2.627 billion yuan, down 34.11% year-on-year, mainly due to the year-on-year decrease in investment income in trading financial instruments and derivative financial instruments, and the fair value change profit and loss was -674 million yuan, down 987.51% from the floating profit of 0.76 billion yuan in the same period of 2020.
Orient Securities achieved revenue of RMB2.3 billion in proprietary business, which also declined by 41.09% year-on-year, mainly due to the narrowing of fair value change income.
Among the three, Industrial Securities is the most obviously dragged down by its proprietary business. For the decline in business income, securities industry insiders close to Industrial Securities told Zhongxin Jingwei, "The overall performance of Industrial Securities belongs to the decent type. As for the single-quarter decline in the self-operated business, it is understandable, because the self-operated business of the entire industry did not perform very well in the first three quarters. ”
Zhongxin Jingwei noted that the proprietary business has become one of the most important sources of income for securities companies in recent years. In the first three quarters of this year, the self-operated business of many securities companies such as CITIC Securities, CITIC Construction Investment, Caitong Securities, Dongxing Securities, and Everbright Securities declined. It is worth mentioning that there are also securities companies such as China Merchants Securities, Guosen Securities, Guolian Securities, Zhongyuan Securities and other securities companies whose self-operated business has performed well. Overall, among the 41 listed securities companies, most of them have experienced year-on-year growth in their proprietary business.
When the wealth management transformation is underway
For securities companies, with the gradual maturity of the market, their traditional brokerage business has begun to enter the situation of stock game, and problems such as the continuous decline in commission rates and the obvious homogenization of business have begun to appear. In this context, compared with the head of large securities companies, small and medium-sized securities companies with relatively weak resources and capital advantages are "more difficult to make a living".
Moving closer to wealth management has become an active choice for brokers. The non-bank financial team of Everbright Securities pointed out that with the continuous increase of residents' investable property and the continuous strengthening of wealth management awareness, the wealth management market of financial institutions is expected to grow between 15% and 18% in the next five years.
The agency pointed out in the research report that although the current wealth management market is still dominated by banks and fund companies, it has benefited from the acceleration of the development of the equity market and the importance of securities companies in the wealth management track.
Tianfeng's non-bank financial team defines the "big wealth management" business as "consignment sales of financial products + fund investment + brokerage asset management + brokerage public funds + securities companies private equity investment funds". At present, the era of wealth management has arrived, which can be seen from the perspective of the agency sales of financial products business.
According to Wind data, in 2020, the industry-wide brokerage agency sales of financial products business included in the statistics for the whole year achieved a net income of 13.438 billion yuan, an increase of 148.76% year-on-year, and in 2021, the data is still growing at a high speed. In the first half of this year, full-caliber securities companies achieved a total of 10.05 billion yuan in net income from agent sales of financial products, an increase of 117.56% year-on-year.
Thanks to the active efforts of wealth management, GF Securities, Orient Securities and Industrial Securities were awarded the title of "Three Musketeers of Wealth Management".
As of the first half of this year, the wealth management business revenue accounted for 37.38% of the revenue of GF Securities, which was the largest proportion of business. In the first three quarters of this year, GF Securities' asset management and fund management business contributed a net income of 7.351 billion yuan, a year-on-year increase of 56.25%, accounting for nearly 30% of revenue. In addition, the company achieved a net income of 6.009 billion yuan from the brokerage business, an increase of 19.85% year-on-year. GF Securities' two ace public funds, E Fangda and GF Fund, both have a management scale of more than one trillion yuan.
In terms of Orient Securities, in 2015, Orient Securities took the lead in renaming the brokerage business department to the wealth management business unit, and began the transformation of wealth management for nearly seven years. In the first half of 2021, the sales scale of Orient Securities equity products was 17.713 billion yuan, an increase of 139.2% year-on-year, and the product-related income reached 476 million yuan, of which the revenue from consignment financial products was 299 million yuan, an increase of 159% year-on-year, and the market share was 2.97%, ranking 11th in the industry. In the first three quarters of this year, the revenue of Orient Securities' asset management business and brokerage business increased by 56.94% and 40.07% year-on-year, respectively. In addition, Orient Securities also has two well-known asset management institutions, Oriental Red and Hui Tianfu Fund.
In terms of Industrial Securities, the company's wealth management business purchase revenue and financial product sales scale exceeded 100 billion yuan in 2020. Hu Pingsheng, vice president of Industrial Securities, once said that the wealth management business is the direction of the company's business transformation and the ballast stone for the stable operation of the group.
In an interview with Zhongxin Jingwei, a relevant person from Industrial Securities said that the company accelerated the transformation and development of wealth management business, effectively improved the scale and quality of its customer base, and continuously enhanced its trading services, investment advisory services and asset allocation capabilities.
In-depth investment advisory business "hinterland"
Zhongxin Jingwei noted that the non-bank financial team of Everbright Securities divided the wealth management track of securities companies into three in its research report, distribution, investment and investment advisory business. Guoyuan Securities pointed out that the transformation of wealth management has become a general trend, and an important starting point for wealth management is investment consultants.
In terms of investment advisory business, Orient Securities took the lead. It is understood that since the end of June, after 20 securities companies have obtained the qualification of fund investment pilot, Orient Securities is the first securities company to obtain the qualification for opening through on-site inspection.
Relevant people from GF Securities pointed out in an interview with Zhongxin Jingwei that cultivating and developing a group of professional and high-quality investment consultants is one of the important starting points for the transformation of the company's wealth management, and the number of investors currently ranks among the top in the industry. "In the future, we will continue to focus on the three main directions of products, investment advisories and platforms to promote the continuous deepening of the transformation of wealth management."
Industrial Securities is not inferior in terms of investment advisory, which told Zhongxin Jingwei that the company was officially approved as a pilot fund investment advisory business, and the wealth management business ushered in a new growth point.
It is understood that investment advisers are the most important group of securities companies to reach customers, and the number of investors of Industrial Securities reached 2025, an increase of 22% over the beginning of the year. In addition, as of the first half of the year, Industrial Securities has established a total of 97 branches, 149 offline business halls and a number of subsidiaries. Industry insiders told Zhongxin Jingwei that offline outlets are an important channel for securities companies to serve wealth management customers and improve customer experience, which is conducive to the improvement of the average asset scale of households.
Despite the reverie brought by the wealth management and investment advisory business, brokers still have to face the dilemma of low stock prices in the secondary market.
In the intraday on the 29th, the wealth management concept stocks of securities companies fell in unison, Orient Securities once fell to a halt, GF Securities fell more than 9% in the intraday, and Great Wall Securities, Zheshang Securities and Caitong Securities fell in the front. Perhaps because the quarterly report of Industrial Securities did not come out at the close, Industrial Securities closed slightly down 0.22% on the 29th. The non-bank team of Great Wall Securities suggested that the securities sector continues to focus on the transformation of wealth management, and it is expected that securities companies with outstanding wealth management business will continue to lead the industry in the future.
According to the observation of Zhongxin Jingwei, in addition to the "three musketeers", many securities companies are actively engaged in wealth management and investment advisory business, but their performance in the secondary market is not outstanding. In this regard, Chen Li, chief economist of Chuancai Securities and director of the research institute, told Zhongxin Jingwei, "Because the wealth management business is difficult, it requires the coordination of various business lines, and it is also highly related to the rise and fall of the securities market." (Zhongxin Jingwei APP)
(The views in this article are for reference only and do not constitute investment advice, investment is risky, and you need to be cautious when entering the market.) )
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