Wealth management business around brokerage valuation trend, two types of brokerage is expected to take the lead in breaking the situation


Reporter | wang Oriental wealth released on March 19, 2021 results show that Gao Yi Deng Xiaofeng, north capital assets in the fourth quarter of last year to add DongCai warehouse, among them, the north capital in consecutive quarters warehouse has become the wealth of the east after the first big shareholders of shares outstanding.The brokerage index is down 20.96 percent this year through March 25, about four times last year’s decline.The phenomenon comes as several leading brokerages, including Orient Wealth, Gf Securities, Orient Securities and Industrial Securities, continued to rise last year but have turned negative this year.For these leading brokerages, Red Weekly found that they are all ahead in the wealth management business, which is the focus of the market, but the “cold” fund sales have poured cold water on the wealth management industry this year.According to the insiders interviewed by Red Weekly, the current wealth management track is far from reaching the stage of competing for the Red Sea.The Internet brokerages with access to traffic and the traditional head brokerages that can share the profits from public offerings are likely to be the ultimate winners in the future.According to the financial report of Oriental Wealth in 2021, the company achieved total operating income and net profit of 13.094 billion yuan and 8.553 billion yuan respectively last year, with year-on-year growth of 58.94% and 79.00% respectively.By comparison, this is much higher than the brokerage industry as a whole.According to the official website of the Securities Association of China, the industry’s 140 brokerages achieved operating revenue and net profit of 502.41 billion yuan and 191.119 billion yuan respectively in 2021, up 12.03 percent and 21.32 percent year-on-year respectively.”Red Weekly” comparison found that although the performance of Oriental wealth growth rate than the year before a decline, but still maintain double-digit high-speed growth, from the “ten billion camp” only one foot.According to iFinD, in 2020, only citic Securities, Guotai Junan, Haitong Securities, Huatai Securities and Guangfa Securities will reach the threshold of 10 billion yuan in net profit.The current disclosure of 2021 financial data shows that mother net profit reached 10 billion also only five, respectively citic Securities, Guotai Junan, Haitong Securities, China Merchants Securities and China Galaxy.In terms of specific business, The wealth management business of Oriental Wealth (including consignment fund and holding public offering) has maintained high growth.Oriental Wealth’s financial statement shows that the company’s main businesses are securities business, financial e-commerce service (mainly through Tiantian Fund, to provide users with third-party fund sales services), and financial data service (mainly through financial data terminals to provide users with financial data services).Last year, the operating income was 7.687 billion yuan, 5.073 billion yuan and 253 million yuan, accounting for 58.70 percent, 38.74 percent and 1.93 percent of the total operating income respectively.Among them, the income scale of financial e-commerce service grew the fastest, with a year-on-year growth of 71.23%, securities business and financial data service business increased by 54.29% and 34.75% respectively.The same is true for 2020.Data show that the revenue of the three major businesses of Oriental Fortune in the previous year accounted for 60.47%, 35.96% and 2.28% respectively, with corresponding growth rates of 81.11%, 139.74% and 19.14% respectively.For the high growth of Oriental wealth, institutional funds to “increase” position.According to Red Weekly, “Gao Yi Xiaofeng Hongyuan”, a subsidiary of Deng Xiaofeng of Gao Yi Asset, increased its holdings again in the fourth quarter after it entered the list of top ten circulating shareholders of Oriental Fortune in the third quarter of last year.Up to now, “Gao Yi xiaofeng Hongyuan” holds 51 million shares of Oriental Wealth, accounting for 0.60% of the company’s outstanding share capital.”Smart money” northbound capital is even more so. From the mid-2020 report to the end of the fourth quarter of last year, northbound capital has increased its holdings of Oriental wealth for five consecutive quarters.Up to now, Beishang Capital has become the largest outstanding shareholder of Oriental Fortune, holding 901 million shares, accounting for 10.48% of the company’s outstanding share capital.It was also institutional buying that made Oriental Fortune one of the few brokerage stocks to rise last year.Data shows that among 48 listed brokerages, last year closed up only 9 brokerages (formerly reinstated rights), accounting for less than 20%.Caida Securities (a 2021 ipo) rose the most by 137.24 percent, followed by Guangfa Securities (55.34 percent), Oriental Wealth (43.93 percent), Oriental Securities (29.53 percent) and Industrial Securities (16.24 percent), which rose more than 10 percent.Among the brokerage stocks that performed well in the market last year, except for new shares, the wealth management business of other brokerages was relatively good.The most typical is Gf securities, its fund consignment and holding public offering are outstanding.First, in terms of commission sales, according to the official website of The Asset Management Association of China, gf Securities held 54.5 billion yuan, 107.9 billion yuan, 82.3 billion yuan and 70.2 billion yuan in the four quarters of last year, ranking 20th, 18th, 19th and 19th among all fund sales institutions respectively.In terms of holding public offering, GF Securities holds 22.65% of the equity of Efund and 54.53% of the equity of GF Fund. As of March 24, the net asset value of EFund and GF Fund was 1,674.634 billion yuan and 1,1117.049 billion yuan respectively, ranking 1st and 3rd among all fund companies.Tianhong Fund ranked second (see tables 1 and 2).But this year since the market is taking place new changes, such as fund issuance blocked.Among them, 322 new fund products and 207.528 billion yuan of net assets were added.In the first quarter of last year, 394 new fund products, more than 72 this year;The net value of new assets reached 1.666525 trillion yuan, about eight times that of this year.As a result, the stock prices of all of these fast-growing wealth-management brokerages have plummeted.Data show that so far this year, only hualin Securities closed up, among which, Oriental Wealth, Gf Securities, Great Wall Securities and Orient Securities, nine of the leading decline and more than 20 percent.Wealth management market in the early stages of development of two types of brokers may be the ultimate winner but brokers’ enthusiasm for wealth management business does not seem to be affected by the rise and fall of stock prices.For example, on March 15, Guotai Junan issued the “Notice on the Transfer of Part of The Shares of Hua ‘an Fund Management Co., Ltd. and the Progress of Related Party Transactions” shows that China Securities Regulatory Commission has approved the transfer of 15% of the shares of Hua ‘an Fund held by Shanghai Investment Management to the company.After the transfer, Guotai Junan will hold a stake in Hua ‘an fund from 28% to 43%, and become the first major shareholder of the latter.In this regard, Guotai Junan said in the announcement, to enhance the shareholding ratio of hua ‘an fund is conducive to make up the company’s public fund business layout shortcomings.Before this on February 11, Citic construction investment also announced the completion of the public offering fund business.The China Securities Regulatory Commission (CSRC) has approved the transfer of a 25% stake held by China Aerospace Science and Technology Finance Co to the citic Construction Investment Fund, according to the company’s announcement.Since then, CITIC has held 100 percent of the citic Construction Investment Fund.Not only that, there are many securities companies directly choose to apply for a public license or set up a capital pipe company to apply for a public license indirectly.According to recent research to comb, northeast securities is directly apply for public offering licences, shanxi securities brokerages have huarong securities, capital stock, large securities, Beijing gao hua securities and bank of China securities six, indirect application for public offering plates with a topix pipe, zheshang venture, bohai huijin, wealth through information technology, the Yangtze river tube, huatai pipe, zhongtai pipe, guotai junan venture tube eight.It is understood that this is because China’s wealth management market is still in the initial stage, China’s wealth management scale is more than 1 times of GDP, while the United States is more than 4 times, while China’s wealth management product category is still in a shortage.Guotai Junan shenzhen sales department manager in an interview with Red Weekly pointed out, “Now is only the initial stage.In recent years, the phenomenon of mass participation fund investment is much more common than in previous years, but it is not enough. It will continue to be a trend.On the other hand, although domestic real estate policies are somewhat relaxed, the red line will not be trodden, and the financial properties of real estate are being diluted (of course, normal housing demand will be met, but it does not mean that real estate speculation is allowed), so domestic investment channels with high returns are blocked.Stocks are low, undervalued and more objective relative returns, which will further expand the wealth management market.”As an insider, he further pointed out to Red Weekly that “in the future, there may be two types of brokerages to become the ultimate winners of wealth business. One is Internet brokerages (with traffic access);The second is the top brokers who have a controlling stake in the public offering funds [and can share in the dividends of public offering profits].”(This article was published in Red Weekly on March 26. The stock mentioned in this article is for example only. It is not a buy or sell recommendation.)

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