On July 24, the China Securities Association released statistical data. The total revenue of 134 securities companies in the first half of 2020 was 213.404 billion yuan, a year-on-year increase of 19.26%;

Author: Bi Xia

Source: Shouting Finance-Shoucai Research Institute

In the first half of 2020, the securities industry made a lot of money.

html On July 24, the China Securities Association released statistical data. The total revenue of 134 securities companies in the first half of 2020 was 213.404 billion yuan, a year-on-year increase of 19.26%; the net profit was 83.147 billion yuan, a year-on-year increase of 24.73%. 124 companies achieved profitability, accounting for 92.54%.

Although happy, he is also wary.

Looking only at June, Hongta Securities and Zhongyuan Securities suffered losses, while Pacific Securities , Caitong Securities , and Haitong Securities saw net profits decline year-on-year. There are a few negative signs.

combined with Goldman Sachs' forecast research report that "the valuation of some securities firms' individual stocks has been too high, and the upside space is limited." Investors should also be somewhat calm and not be fooled by short-term profits. After all, in the turbulent capital circle, faces change faster than the sky changes. The ups and downs of the

industry ultimately boil down to the fact that core competitiveness needs to be improved. Especially when competing with top international investment banks.

The financial supply-side reform has entered the deep water zone. Facing the fierce incoming foreign investment, it is the general trend to build a high-quality "aircraft carrier-level securities firm" and upgrade the industry competition pattern.

This is also the logic behind the heated discussion about the "double-China merger" between CITIC Securities and CITIC Construction Investment.

Strong semi-annual report

Recently, many media reported that CITIC Group, the largest shareholder of CITIC Securities CITIC Co., Ltd. parent company CITIC Group, will purchase its stake in CITIC Construction Investment from Central Huijin to promote the merger. This plan has been approved by two Approved by the National Party Committee.

html On the evening of July 5, CITIC Securities and CITIC Construction Investment responded to the Shanghai Stock Exchange at the same time, denying the merger rumors.

What is surprising is that in the early trading on July 6, CITIC Securities and CITIC Construction Investment continued their daily limit status. It is reasonable that

is popular in the market. After all, once the two are combined, a 600 billion aircraft carrier-level securities firm will be ready to emerge. Which investor would give up this scarce "ticket".

There are various signs that policies, business, and capital are all tilting towards the leading securities firms. The strong ones are "combined", and the value expectations are self-evident.

Especially CITIC Construction Investment, the growth in recent years is very interesting.

Back to the 2020 semi-annual report, CITIC Construction Investment is in the spotlight, and it feels like a popular fried chicken.

html On the evening of July 23, CITIC Construction Investment's performance report showed that revenue was 9.9 billion yuan, an increase of 67.63% over the same period last year; net profit attributable to shareholders of the parent company was 4.578 billion yuan, an increase of 96.54%. Both revenue and net profit rank third in the industry.

CITIC Construction Investment said that the high performance growth was mainly due to the large growth in the company's proprietary investment, brokerage business fee net income and investment banking business fee net income.

sorting out the business sector is not a lie.

Let’s first look at the cornerstone business---investment banking.

From 2013 to 2019, investment banking business income accounted for 13.8%, 17.1%, 13.9%, 26.6%, 22.8%, 20.1% and 19.9% ​​of CITIC Construction Investment's operating income respectively.

Wind data shows that in the first half of 2020, the total underwriting business income of 50 domestic securities firms was 7.866 billion yuan, and the industry average was 157 million yuan. CITIC Construction Investment ranked first: reaching 981 million yuan, accounting for 12.47%, surpassing the second place. Gold company 3 percentage points.

It is worth mentioning that the underwriting business of CITIC Construction Investment is also the biggest challenger of Morgan Stanley Huaxin Securities .

Currently, Morgan Stanley Huaxin Securities ranks first in the underwriting business of China's equity capital market, occupying 10.8% of the market share with an underwriting amount of US$7.98 billion.

CITIC Construction Investment’s market share is 9.5%, with underwriting volume of US$6.99 billion.

Looking at the IPO issuance volume, in the first half of this year, the securities industry provided IPO services to 131 companies. The number of CITIC Construction Investments is 11, only two less than the oldest CICC.

Then there is the amount of funds raised. CITIC Construction Investment’s 21 IPO projects have raised a total of 30.127 billion yuan. Among them, the largest project is Yihai Kerry, which plans to raise 13.87 billion yuan and has the largest amount of funds raised since the new GEM was accepted.

In addition, it also participates in sponsored projects, such as Zhongxing Technology Co., Ltd., Shenzhen Boshuo Technology Co., Ltd. , Beijing Hongli Industry Technology Co., Ltd., etc.

's investment banking business is booming, which is seen as a continuation of "energy" in the eyes of Coutiao Finance.

In 2019, the Beijing-Shanghai High-speed Railway IPO, which it exclusively sponsored, was the fastest-reviewed A-share IPO project in China in the past ten years, successfully raising over 30 billion yuan.

It is also the biggest beneficiary of the hot science and technology innovation board field. Among the first batch of 25 companies listed on the Science and Technology Innovation Board, CITIC Construction Investment serves as the sole sponsor and lead underwriter for 5 companies, 1 joint sponsor and lead underwriter, and 1 joint lead underwriter. The number of projects ranks first in the industry. first place. Throughout the year, it sponsored and underwrote 10 companies listed on the Science and Technology Innovation Board, ranking first in the industry.

Also in the dominant position is the segmented financial sponsorship business.

In 2019, CITIC Construction Investment sponsored as many as 6 bank projects, namely Zhejiang Shaoxing Ruifeng Rural Commercial Bank, Xiamen Bank , Xiamen Rural Commercial Bank, Qilu Bank , Lanzhou Bank , and Jiangsu Kunshan Rural Commercial Bank. Even "peer" Caida Securities is also a customer.

Strengths and Weaknesses

Here comes the question, why is CITIC Construction Investment’s investment banking business so powerful?

First of all, it is positioned as a boutique investment bank. Combined with its glorious resume and rich experience, CITIC Construction Investment has obvious brand advantages. Especially under the background of accelerated registration system reform and loosening of refinancing, the advantages of professional brands continue to accumulate like a "snowball".

Oriental Securities research report holds the same view: CITIC Construction is established as a boutique investment bank and relies on shareholder resources and long-term cultivation to continuously consolidate and expand its advantages as an investment bank. The company's equity underwriting, bond underwriting, mergers and acquisitions and restructuring, New Third Board and Science and Technology Innovation Board businesses are among the top three in the industry. In Q1, the company's equity and bond underwriting market shares were as high as 29% and 11% respectively, with obvious advantages. Driven by the registration system reform, the company is expected to better leverage its advantages as an investment bank and promote the transformation and integration of large investment banking businesses.

Secondly, from the investment banking business itself, professional team strength is the decisive factor. As of December 2019, CITIC Construction Investment has actively promoted the construction of investment research talents and has successfully recruited six star analysts to join.

Of course, this is also directly related to the salary level.

In the early years, CITIC Construction Investment was called the "75th Company" because it stated in the offer letter: "The company will provide you with a market-competitive salary, and the overall level is above the 75th percentile of the market level." ".

until 2015, it paid 103 monthly bonuses to its employees, and news that the year-end bonus was as high as 5 million spread like wildfire, and "99 Company" became a hot search again.

has a strong salary, and the talent advantage will naturally become more and more prominent.

Let’s look at self-operated business.

Ma Tingting, chief analyst of the financial industry at Guosheng Securities, said that in recent years, the proportion of securities companies’ self-operated business income has continued to increase, basically at around 30%, which has a greater impact on the operating performance of securities companies. In the second quarter, as the stock market improved, it was obvious Boost self-operated performance.

focuses on CITIC Construction Investment, and its performance growth is mainly due to self-operation.

In the first quarter of 2020, its self-operated business increased by 68% year-on-year. Where does

stand in the industry?

Data from the China Securities Association shows that during the same period, the industry’s average self-operated business revenue fell by 43%. Between the rise and fall of

, CITIC Construction Investment’s status as king is clearly revealed.

In recent years, the development of CITIC Construction Investment’s self-operated business has been described as “rapid”.

Taking 2019 as an example, the brokerage business income was 2.847 billion yuan, a year-on-year increase of 24.24%; the investment banking business income was 3.685 billion yuan, a year-on-year increase of 17.55%; the asset management business income was 793 million yuan, a year-on-year increase of 14.74%; and the self-operated business income was 43.99 billion, a year-on-year increase of 81.42%.

It can be seen that regardless of scale or growth rate, self-operation is the first business of CITIC Construction Investment.

Regarding the strong performance, CITIC Construction Investment said that in 2019, the company increased its blue-chip product layout, accurately grasped sector opportunities in the structural market, and achieved better absolute returns.

At the same time, it also has a certain relationship with its investment style.

For example, in terms of financial technology, CITIC Construction Investment continues to optimize systems such as Dragonfly Dianjin and Youwen, and promote centralized operations. It also strengthened the digital construction of core business departments, supported the expansion of new businesses such as the Science and Technology Innovation Board, and added 8 new software copyrights such as "Investment Banking Customer Relationship Management System".

has benefited from previous accumulation and its quality control and risk control capabilities have been continuously improved.This epidemic is proof of this. In terms of

research and consulting services, since January 31, CITIC Construction Investment has held a total of 226 online meetings, an increase of 10 times compared with the same period last year. In terms of content, 34 research teams of CITIC Construction Investment participated in in-depth research and special conferences on the impact of the epidemic prevention and control industry, and held online training sessions on industry research methods.

However, this does not mean that there are no problems, especially in terms of compliance in wealth management businesses.

In April 2020, the Beijing Securities Regulatory Bureau of the China Securities Regulatory Commission issued a warning letter: After investigation, the funds invested in the same asset among the 8 private equity asset management plans managed by CITIC Securities exceeded the net asset value of the asset management plan. 25%.

The Beijing Securities Regulatory Bureau believes that the above-mentioned violations reflect the weaknesses in the internal control of CITIC Securities and insufficient risk management and control of the private equity asset management business. It is required to further strengthen compliance management and risk control.

It is worth noting that in March 2020, the China Asset Management Association disclosed the ranking of the average monthly scale of securities firms' private equity asset management in the fourth quarter of 2019. CITIC Construction Investment's average monthly scale was 523.676 billion yuan, ranking 6th. Compared with the third quarter of 2019 The ranking fell by 2 places.

Brokerage No. 1 Brother Changxiang

It seems that CITIC Construction Investment still has a lot of work to make up for its shortcomings. In addition to high growth, stability needs to be strengthened. This is very important for a large brokerage. Especially when carrying the expectations of the new broker.

html In early July, the value of CITIC Construction Investment's A-share market once exceeded that of CITIC Securities, the "biggest brokerage", which is the best example.

Judging from the current attitudes of the two, a short-term "marriage" is unlikely.

However, judging from the performance of CITIC Construction Investment in the first half of the year, this does not affect its momentum to become the "new brother of securities companies".

Of course, Guotai Junan, Huatai Securities, Shenwan Hongyuan , etc. are also strong competitors.

htmlOn July 17, the China Securities Regulatory Commission issued a notice to all local offices to encourage securities companies and fund management companies to do a good job in organizational management innovation. Solve the problem of horizontal competition and encourage qualified industry organizations to implement market-oriented mergers and acquisitions and reorganizations.

’s encouragement to become bigger and stronger is beyond words.

Industry revitalization, finance takes the lead. The quantity is changing and the quality is changing, and "aircraft carrier-level securities companies" may be on the way. First Finance will continue to pay attention.

This article is the first financial article