The Net Profit Of Dongfang Fortune Doubled Last Year, And Its Market Value Caught Up With The First Brother Of The Securities Company, CITIC Securities. The Overall Performance Of CITIC Securities Industry Could Not Hide The Hidden Worries About The Withdrawal Risk

The market value gap between internet securities companies and traditional leading securities companies is constantly narrowing.

Recently, the radical rise of the Internet brokerage Oriental Fortune has made the market look sideways. In less than a month since the beginning of 2021, the company's share price has risen by nearly 25%.

As of January 25, the company's total market value has reached 340.7 billion yuan based on the closing price of Dongfang fortune 39.56 yuan per share, which is less than 50 billion yuan lower than the total market value of 387.4 billion yuan of CITIC Securities, commonly known as the "big brother" of the securities industry.

According to the performance of securities companies disclosed recently in 2020, the current non audited net profit attributable to shareholders of listed companies of Dongcai securities of Dongfang fortune was 2.893 billion yuan, up 104% year-on-year. By contrast, CITIC Securities, affected by the huge amount of withdrawal, is expected to return to the parent net profit of 14.897 billion in 2020, but the year-on-year performance growth slows down to 21.82%.

"The business model of Dongfang fortune is different from that of traditional securities companies, and the valuation cannot be simply compared. In addition, Dongfang fortune is listed on the gem, and the overall board valuation should be higher. But in any case, the competition around the wealth management business of the old and new securities companies has begun, and internet securities companies have become a force that can not be ignored. " There is a secondary market in Shanghai private fund practitioners said.

The year of Internet brokerage

Looking back on 2020, the A-share market seems to have been in a state of high sentiment. Wind data shows that in 2020, the daily average stock trading volume of the securities market is 851.1 billion yuan, with a year-on-year increase of 63%.

In this case, Dongcai securities, an Internet brokerage that focuses on securities trading, has also taken the lead. According to the company's unaudited financial report in 2020, the net income of handling charges and commission mainly from securities brokerage business of Dongfang fortune in the current period increased by 76% to 2.99 billion yuan on a year-on-year basis. According to the calculation of Huaxi Securities, the trading market share of Dongfang fortune in 2020 will reach 3.32%, 0.48% higher than that in 2019.

Benefiting from the development of the two financing businesses, the net interest income of Dongfang fortune in 2020 will also reach 1.260 billion yuan, with a year-on-year increase of 87.93%. The balance of the company's financing funds was 29.691 billion yuan, an increase of 86.53% over the beginning of the year, and the market share of the company's loans increased from 1.58% at the beginning of the year to 2.00%. According to the information previously announced by the company, as of September 2020, the market share of Dongcai securities financing business has reached 1.80%.

It is worth mentioning that in recent years, Dongfang fortune has invested quite a lot in the two financing businesses.

On the evening of October 21, 2020, the company announced that it plans to issue convertible bonds to raise no more than 15.8 billion yuan, of which no more than 14 billion yuan will be invested in credit trading business to expand the scale of margin trading business.

With the rapid growth of securities business performance, Dongfang fortune also benefited from the explosion of public funds, and the fund consignment business achieved good performance. According to the company's unaudited financial report data disclosed by the company, the non securities profit of Dongfang fortune is expected to reach 1.607 billion yuan-2.007 billion yuan in 2020, and the profit contribution will be greatly increased to 36% - 41%. In the view of the market, the fund sales business contributed most of the revenue.

According to the data of the first three quarters of 2020, the fund sales amount of the daily fund of the Internet Fund platform of Dongfang fortune was 995.068 billion yuan, with a year-on-year increase of 112.26%. The platform charged 955 million yuan of subscription, subscription and redemption fees from customers, with a year-on-year increase of 267.22%; the follow-up Commission and sales service fee collected from fund companies were 1.155 billion yuan, with a year-on-year increase of 84.09%.

Wei Tao, director of the West China Securities Research Institute, said that by the end of 2020, the number of funds and the number of funds sold on a daily basis had reached 148 and 5674 respectively, ranking first in the consignment market. In the future, the equity fund market is expected to continue to develop rapidly. At the same time, due to the gradual increase in the proportion of income based on the holding amount in the fund sales business, and the business income is delayed, the sales business income of Oriental Wealth Fund will continue to grow substantially.

Or based on the brilliant performance of the above-mentioned series of businesses, public funds also have a positive impact on Oriental wealth. According to the statistics of Societe Generale Securities, by the end of the fourth quarter of 2020, the top five securities dealers in the top ten positions of public funds were Dongfang fortune, CITIC Securities, Huatai Securities, Guotai Junan and China Merchants Securities. Among them, the total market value of Orient wealth is 13.046 billion yuan, which is 10.061 billion yuan higher than CITIC Securities, the second largest securities industry. In the fourth quarter, public funds added 7.627 billion yuan to Dongfang fortune, ranking first among securities companies.

"It should be said that the securities industry is in a period of great change, and the innovation of the new business model brought about by the digitalization and Internet of the core brokerage business of the securities industry is a major trend of the current industry. Internet brokerages with information portal, social function and other "traffic" as the core compete with the traditional financial function as the core of the old securities companies, which is also the reason why domestic funds are keen on Oriental Wealth in the short term. " Have Beijing area to have the experience of stockjobbers in charge of private funds said.

But he also said that from the perspective of wealth management, traditional securities companies with huge human resource reserves, good investor experience and larger scale also have their own advantages in the field of wealth management. "The business model of Internet securities companies and traditional securities companies are still in the early stage of competition in this field. The traditional securities companies accelerate the digitization and intellectualization, which strengthens the competitiveness. The wealth management business is the core of the value growth of securities companies in the future, and I think the competition pattern is still uncertain. "

Huge withdrawal dilutes the joy of the bond industry's bumper harvest

As said by the person in charge of the above-mentioned private equity funds, traditional securities companies have also made good profits by virtue of the relatively hot market in 2020.

At present, in addition to Dongcai securities, 13 securities companies have disclosed the unaudited financial reports in 2020. Only from the perspective of handling fees and commission income, wind data statistics show that the 13 securities companies achieved a total net income of 14.229 billion yuan, an increase of 29% year-on-year. Among them, Minmetals securities, Huaxin securities and Guosheng securities performed the best, with the growth rates of 85%, 64% and 55% respectively. Among the 13 securities companies, only Yingda securities related income achieved negative growth, down 18% year-on-year.

At present, the net profit of 22 securities companies that have disclosed their performance forecast or have not been audited has increased by 82.16%. Among them, the net profits of Donghai securities, Huaxin securities, CICC wealth, Yingda securities and Dongcai securities are expected to double, with year-on-year growth rates of 460.27%, 317.16%, 247.43%, 110.56% and 104.23%, respectively. The keynote of a bumper harvest year for the securities industry has been laid.

However, CITIC Securities, whose market value is being overtaken by Dongfang wealth, will slow down to 21.82% year-on-year in 2020, but it is estimated that the company's net profit attributable to its parent will still be close to 15 billion yuan, ranking first among the securities companies that have disclosed performance forecasts or have not audited financial reports.

However, CITIC Securities has become the focus of the market with a huge amount of impairment of 5 billion. The company has previously announced that as of the third quarter of 2020, the company has made a total of 5.027 billion yuan of various assets impairment reserves. This is also regarded by the market as the main reason for the slowdown of the company's performance growth in 2020.

According to CICC's analysis, the credit impairment of CITIC Securities in the third quarter of 2020 alone will reach 3 billion yuan, accounting for 59% of the pre tax profit, which will drag down the profit performance. Corporate credit impairment should mainly come from two aspects, one is equity pledge and financing business, on the other hand, corporate bond assets are also affected by the third quarter bond market fluctuations.

Coincidentally, according to the incomplete statistics of 21st century economic report, a total of 40 listed securities companies have made provision for credit impairment in the first three quarters of 2020, with a total withdrawal scale of more than 17 billion yuan and a year-on-year growth of more than 80%. Up to now, among the listed securities companies that have disclosed the withdrawal scale of the whole year in 2020, Guoyuan securities has made a total of 492 million yuan, and Changjiang Securities has withdrawn 470 million yuan, of which, the majority of the withdrawal is accounted for by the purchase of resale financial assets. This also cast a shadow on the performance of the securities industry in 2020.

"The overall increase in the impairment of securities companies in 2020 is significant, but the situation of each company is different. Some things are really stepping on the thunder, and some are the impact of the expansion of the two financing business and stock pledge business, which can not be generalized. For example, the huge withdrawal of CITIC Securities is mainly due to the increase of credit risk of stock pledge type repurchase project, which has the component of corporate prudence. The overall situation of the securities industry will not change in 2020. " A small and medium-sized domestic securities firm non bank analysts said.