The First Month Performance Of The Securities Company Is Dancing Against The Trend: The Market Will Not Fall Or Rise.

Under the shadow of the new coronavirus pneumonia epidemic, the securities sector ushered in the first month of the year's annunciation.

According to the twenty-first Century Wind report, more than half of the 56 brokerages who have disclosed the data of January have achieved a year-on-year increase in operating income, with an average growth rate of over 6%.

According to the insiders, the performance of brokerages in January has increased year-on-year in the wake of factors such as Spring Festival holidays, postponed breaks and epidemic outbreaks. This means that the fundamentals of the securities sector are facing a strong recovery, and this achievement is related to the recent active market transactions.

The industry also believes that the registration system, mergers and acquisitions, refinancing and other policies continue to loosen, the plate is expected to usher in further valuation repair.

Why is "contrarian growth"?

In the first month of 2020, the performance of the securities sector showed a positive signal.

In twenty-first Century, according to Wind statistics, according to the statistics of Wind, 29 of the 56 brokerages who reported monthly business data achieved an increase in business income, while the profit growth rate was up to 33.

Among them, Dongfang, CITIC construction, Hualin, state yuan, Huachang, first venture, state sea seven brokerages business revenue grew by more than 50% over the same period. On the contrary, more than 50% of the revenue came from the same year, and almost all of the brokerages with year-on-year decline were information management or sponsor subsidiaries.

Statistics also showed that the average growth rate of 56 brokerages was 6.12% year-on-year, while net profit grew by an average of 33.45% over the same period last year.

In the industry's view, this growth was achieved in January, including the Spring Festival holiday, the impact of the epidemic and the delayed opening of the market. Therefore, it can be seen as an "inverse trend" in the industry.

"This year's Spring Festival is January, and the Spring Festival holiday in 2019 falls in February. Therefore, the monthly data in the same period compared with the previous year, this year January has less than a week's trading date, plus the rest arrangements for the epidemic, in fact, there are few trading dates in January, so this should have a greater impact on the business performance of the month's coupons." "A long term holiday affects more than brokerage business, and information management and investment banking can not be carried out, so it is not easy to get a year-on-year growth," said a non bank financial analyst at a medium-sized brokerage in Beijing.

From the number of trading days, the total trading days in January 2020 amounted to 16 days, compared with 22 days in January and 22 days in December 2019. This also meant that the average trading day in 2020 January was 27.27% lower than that in 2020.

From the link data, the impact of January long holidays and rest on brokerage stocks can be seen. Based on Wind data, the reporter found that the average operating income of 56 brokerages in January was -38.61%. Among them, Guotai Junan, founder, CAITONG, Tianfeng and other 11 brokerages fell by more than 60%.

Nevertheless, the revenue of small and medium-sized brokerages represented by Jianghai and Hongta has achieved positive growth, of which Jianghai securities's monthly revenue growth is more than 2 times, but the number of brokerages with positive growth is only 6.

"In the case of reduction in trading days and working days, the growth of annulus growth is an isolated phenomenon, which is related to various factors, such as revenue recognition regulation and last month's revenue base." The above non bank analysts pointed out.

"Under such a situation, the stock market of securities companies is still showing growth in performance. It can be said that the fundamentals of the industry are in a strong rebound cycle." The above non bank analysts pointed out.

Emotional recovery

In fact, the growth of the securities sector is not related to the improvement of the A share market activity.

An important signal comes from the further growth of the number of A share investors. According to the latest figures released by China's settlement in February 17th, 800 thousand and 700 investors were added in January this year, and by the end of January, the number of investors has reached 161 million. According to Wind data, the figure is only 82 million at the end of April 2015, which means that in less than 5 years, the number of investors in A shares has nearly doubled.

This trend was extended in February. On February 19th, the total volume of Shanghai and Shenzhen two cities exceeded 1 trillion yuan, reaching a new high in nearly 8 months.

In addition, the number of credit accounts is also rising. The Shanghai and Shenzhen stock exchange data show that as of January 2020, the number of credit account investors has reached 5 million 119 thousand and 900, and has resumed to the early stage of bull market at the end of 2014.

Accompanied by this, the scale of the two financial institutions is also increasing. By the end of January 2020, the balance of Shanghai and Shenzhen two has reached 1 trillion and 40 billion yuan, and as of February 18th, the water level has increased by more than 30 billion yuan.

In addition, the scale of the market's trading is also expanding. Wind statistics show that the turnover of A shares in Shanghai and Shenzhen two cities totaled 11 trillion and 120 billion yuan in January, while in January 2019, the total turnover of A shares was 6 trillion and 480 billion yuan, less than 60% in January this year.

It is worth mentioning that the uncertainty brought to the securities sector also comes from the impact of the epidemic. But in the view of analysts, due to the high penetration of online brokerage business, the current epidemic has limited impact on the brokerage sector.

"At present, based on the rational expectation of the subsequent evolution of the epidemic, as well as the relative optimism of liquidity and policy, the equity market is generally stable and the market sentiment is biased positively."

China Merchants Securities non bank team said, "at the same time, in the context of the current trading business 95% depends on the Internet rate, the securities companies' business progress is almost not affected by the quarantine requirements of the epidemic prevention. Therefore, it is relatively limited to determine that the fundamentals of the securities company are affected by the epidemic. On the contrary, the continuous increase of A share capital and the gradual advance of registration system, and the liberalization of mergers and acquisitions are further stimulating the valuation space of the securities market.

On the one hand, international capital is accelerating to enter the A share market. On the other hand, the deregulation of registration system, refinancing and merger and acquisition will also bring a lot of securities business opportunities. "Dividends at the institutional level are likely to continue to push up the valuation of the securities sector."

Coincidentally, Societe Generale Securities also commented in February 19th that securities firms can now rise to the leading sub sectors of the financial sector.

"Liquidity loosely overlay the long logic of benefit reform, and raise brokers to the financial sector. Under the background of counter cyclical adjustment, the policy continues to be loose, and the refinancing rules fall to further strengthen the long logic of the securities industry's continuous benefit from the reform of the capital market dividend. Societe Generale Securities said. (Editor: Wu Yan Ling)

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