Chinese Securities Brokerage H Shares Rising Space Is Limited

In the A stock brokerage stocks usher in a period of shock, at the same time, the mainland brokerage listed in Hongkong has also become the focus of brokerage Research Report.

In recent days, JP Morgan spent the average daily turnover in 2015 on the basis of a downward trend, loose or expected monetary easing and rising financial risks. But at the same time, there are many securities companies in Hong Kong continue to bullish brokerage H shares.

A share market brokerage stocks after "1. 19 crash", from the previous high-profile explosive general inflation, to the current collapse after the gradual differentiation, stock prices have recently stabilized signs of stabilization. At that time, however, JP Morgan lowered the rating of China Galaxy in a low profile, from "overweight" to "neutral", and Haitong Securities and CITIC Securities ratings were "neutral".

JP Morgan released a report that the mainland brokerage H shares have increased by 39% since the central bank announced interest rate cuts in November 2014. It is believed that further upward space is limited and investors are advised to make profits in the first place, mainly because the valuation now reflects the average return of shareholders (ROE), which is about 24%. In addition, the increase in ROE this year is limited by capital. If ROE is raised, it will be diluted. In 2015, the average daily turnover was down or showing a downward trend, due to the expected or subsided monetary easing in the second half of the year. Because of worries about liquidity, capital and credit risks, the growth of financing loans may decline. In addition, the bond underwriting fees of securities companies may be affected by the new rules.

JP Morgan has upgraded China Galaxy rating from "overweight" to "neutral". At the same time, the latest information of HKEx shows that Morgan chase, the main shareholder of China Galaxy, held 1 million 499 thousand and 500 shares in January 6, 2015 and cash 1501.14945 Hong Kong dollars. The average transaction price was HK $10.011, and the highest transaction price was HK $10.14. After the change, 84 million 73 thousand and 989 shares were held and the shareholding ratio was 4.97%. JP Morgan's rating on Haitong Securities and CITIC Securities is still "neutral".

UBS Securities also holds similar views. For CITIC Securities H shares issuance, UBS Securities believes that CITIC Securities innovation business development is relatively fast, net capital has restricted the development of the company. After H-share raising, the net capital of the company is expected to reach 79 billion yuan, an increase of 89% over the mid 2014. Based on the division valuation method, the target price was raised to 36.45%, but the company's current stock price corresponds to 2015E P/E, P/B is higher than the average of the comparable company, and the valuation is not cheap. Grade From "buy" to "neutral".

At the same time, for brokerage stocks H shares There are different voices in valuations.

Yuan Da securities (Hongkong) believes that CITIC Securities's earnings in 2014 basically meet expectations, and it is expected that the company will benefit from the Shanghai 50ETF option pilot. As of January 9th, the CITIC Securities H-share price was 49% higher than the A share price. Taking into account the increasing risk of A shares soaring, it is believed that CITIC H shares are good. arbitrage opportunity 。 Maintain rating "hold".

Shenyin Wanguo (Hongkong) also said that innovation business driven Haitong Securities revenue growth. Management expects innovation business to grow to 30% of total revenue in 2014. It is expected that H-share issuance will support the development of Haitong Securities medium term capital intermediary business. But in the long run, it is expected that management will expand its financing capacity through borrowing and raise its leverage ratio to about 3 times -5 times in the next two years. In the long run, the target price was raised from HK $22.1 to HK $22.7, maintaining a "buy" rating.

According to the insiders, although Morgan Chase's reason for seeing the securities brokerage H shares is justified, this year there are indeed various risk factors mentioned by the foreign investment bank in its research report, but investors need not pay too much attention to foreign capital's singing. Take Haitong Securities as an example, according to its three quarterly report in 2014, the dynamic PE is 31 times, and the annual performance express is calculated. The real PE in 2014 is 27 times. In 2014, the average volume of Shanghai Stock Exchange was 3 trillion and 100 billion yuan in January. Trading volume of 7 trillion yuan in January of this year has been confirmed. The two financial industry has maintained a high balance, and then consider the contribution of options trading, IPO and self employment income.