Recently, the China Securities Association conducted statistics on the operating data of 140 securities companies in the first half of 2022. Data shows that in the first half of 2022, 140 securities companies achieved operating income of 205.919 billion yuan, a decrease of 11.4%

Revenue and net profit both declined, and self-operated became the "win-loss" of performance growth

China Fund News reporter Molin Cao Wenjing

Recently, the China Securities Association conducted statistics on the operating data of 140 securities companies in the first half of 2022. Data shows that in the first half of 2022, 140 securities companies achieved operating income of 205.919 billion yuan, a decrease of 11.4% from the same period last year; net profit of 81.195 billion yuan, a decrease of about 10% from the same period last year.

Judging from the nearly 40 securities firms with interim performance, as of now, only 7 of them have positive year-on-year growth in net profit attributable to shareholders, while the rest have all experienced negative growth, and the net profits of many leading securities firms have declined by more than 40%.

More than 0 securities firms insiders said that the fluctuations in the A-share market in the first half of this year have intensified, and the sharp decline in the income of proprietary investment business is one of the main reasons for the sharp decline in performance of most securities firms.

The overall performance of securities companies in the first half of the year declined, and the net profits of many leading securities companies fell by more than 40%

According to incomplete statistics from reporters from China Fund News, as of the evening of August 26, 37 securities companies have disclosed interim results, with a cumulative operating income of 118.729 billion yuan, a year-on-year decrease of 20.49%; the cumulative net profit attributable to shareholders was 36.995 billion yuan, a year-on-year decrease of 25.98%. At present, there are many large and medium-sized securities companies such as Oriental, CITIC , Shenwan, Industrial , and CITIC .

According to the disclosed situation, there were only three listed securities companies with operating income of over 10 billion yuan in the first half of the year, namely Guotai Junan (19.554 billion yuan), Haitong Securities (12.104 billion yuan), and China Merchants Securities (10.621 billion yuan); in addition, Guosen Securities , Zhejiang Securities , Everbright Securities , and Zhongtai Securities' operating income in the first half of the year ranged from more than 5 billion to 8 billion yuan, while Anxin Securities and Oriental Fortune have a semi-annual revenue of more than 4.5 billion yuan.

In terms of net profit attributable to shareholders, Guotai Junan (6.373 billion yuan), Haitong Securities (4.758 billion yuan), Oriental Fortune (4.444 billion yuan), China Merchants Securities (4.288 billion yuan), Guosen Securities (3.210 billion yuan), Everbright Securities (2.108 billion yuan), Anxin Securities (1.648 billion yuan), Founder Securities (1.421 billion yuan), Zhongtai Securities (912 million yuan), and Dongwu Securities (818 million yuan) are temporarily ranked in the top 10.

It is worth noting that the overall performance of securities companies in the first half of the year showed a downward trend. Up to now, only seven brokerages including Oriental Fortune (19.23%), AVIC Securities (25.63%), Huaan Securities (17.87%), Guolian Securities (15.37%), Founder Securities (9.29%), Caixin Securities (1.46%), etc., have positive year-on-year growth rate, while the rest have all shown negative growth. Among them, the net profits of many leading brokerages have declined significantly. For example, Guosen Securities' net profit attributable to shareholders was 3.21 billion yuan, a year-on-year decrease of 33.05%; China Merchants Securities' net profit attributable to shareholders was 4.288 billion yuan, a year-on-year decrease of 25.36%; Haitong Securities' net profit attributable to shareholders was 4.758 billion yuan, a year-on-year decrease of 41.77%; Guotai Junan achieved a net profit attributable to shareholders of 6.373 billion yuan, a year-on-year decrease of 20.47%.

The A-share market fluctuations intensified in the first half of this year, and the sharp decline in the income of proprietary investment business is the reason for the decline in performance of most securities companies. For example, Tianfeng Securities , Dongxing Securities , West China Securities , Southwest Securities , and Hongta Securities all announced that the main reason for the market impact, the performance of investment business has declined. In addition, according to the information disclosed in the semi-annual report, the increase in the stock pledge business 's provision for , and the decline in revenue from 's investment banking business , asset management business, and brokerage business is also the reason for the year-on-year decrease in performance of some companies.

China Merchants Securities stated that the decline in brokerage business revenue was mainly due to the decline in revenue from agency sales of financial products, the decline in company commission rate, and the decline in trading volume of Hong Kong stocks ; the decrease in investment banking business revenue was mainly due to the decrease in IPO business revenue; the decrease in asset management business revenue was due to the market decline and the decrease in product performance rewards.

Oriental Securities stated that the company's revenue from equity proprietary operation and asset management in the first half of the year decreased year-on-year, and the impairment provision for stock pledge business increased year-on-year. Pacific Securities stated that the company suffered losses in this reporting period due to the provision of asset impairment.

It is worth noting that although the performance of securities companies in the first half of the year was not good compared with the same period last year, the month-on-month improvement was good, and most securities companies' net profit in the second quarter grew rapidly month-on-month. In the second quarter of this year, the average quarterly net profit growth rate of 27 comparable brokerages was 332.49%, and 25 brokerages had positive month-on-month growth rate, accounting for 92.59%. Among them, 17 brokerages had a quarterly net profit growth rate of more than doubled.

, such as Western Securities (2332.76%), Changjiang Securities (1502.63%), Guoyuan Securities (823.26%), Great Wall Securities (754.18%), Dongxing Securities (707.00%), Dongwu Securities (519.13%), Huaan Securities (480.22%), West China Securities (371.53%), Northeast Securities (279.76%), Guohai Securities (261.95%) and other net profits in the second quarter grew rapidly month-on-month. In addition, the net profit growth rate of some medium and large securities companies in the second quarter in the second quarter was also not low.

self-operated becomes the "win-loss move" of performance growth

In the first half of this year, the overall performance of securities companies was poor. As of now, only 7 securities companies have achieved positive growth in net profits. The reason is that in addition to the year-on-year decline in revenues of multiple businesses such as investment banking and wealth management, the revenue of proprietary business affected by stock market fluctuations has become the key factor in determining whether the performance of each securities company has grown.

According to the official website of the China Securities Association, in the first half of 2021, the investment income of securities of securities (including fair value changes ) of 139 securities companies was 69.788 billion yuan, while in the first half of 2022, it decreased to 42.979 billion yuan, an overall decrease of 38.41%. Specifically speaking, as of now, the proprietary investment income of 7 securities companies has been losses.

is based on the calculation of "investment income + changes in fair value - investment income for joint ventures/joint ventures = proprietary investment income". Among the securities companies that have disclosed interim reports, Changjiang Securities' proprietary investment income has suffered the largest losses (-520 million yuan), Anxin Securities follows closely (-230 million yuan), and Guoyuan Securities (-199 million yuan) and Dongxing Securities (-173 million yuan) also exceeded 100 million yuan. In addition, West China Securities (-39.92 million yuan), Zhongtai Securities (-32.85 million yuan), and Guangdong Securities (-2.79 million yuan).

Changjiang Securities stated that in the first half of the year, the equity investment market generally fell, and the market performance was weaker than the same period last year, resulting in a significant reduction in revenue from equity investment business; fixed income investment business seized market opportunities, increased investment scale, and adjusted risk exposure according to trend changes and improved portfolio credit qualifications. Combined with the interest income of other debt investments, the income from fixed income investment business has increased.

Anxin Securities also stated in its financial report that during the reporting period, Anxin Securities' net profit attributable to shareholders fell by 31.70% year-on-year, mainly due to the significant year-on-year impact of the market conditions. From the perspective of investment business types, Anxin maintains profitability in fixed income, and its main losses are concentrated in equity investment.

"Everyone knows what the entire equity sector performed in the first half of the year, and it is indeed quite dangerous." Cui Xiaoru, vice president of Founder Securities, commented on the impact of securities companies' proprietary business in the first half of the year.

In contrast, securities companies whose performance is currently growing against the market, their proprietary business has achieved positive growth year-on-year. According to the above calculations, Oriental Fortune achieved proprietary investment income of 639 million yuan in the first half of the year, a year-on-year increase of 60%; Founder Securities increased by 70% year-on-year, and Caixin Securities and AVIC Securities also increased by 98% and 80% respectively. Guolian Securities' proprietary investment income increased by 12.6%, but its revenue and net profit in the first half of the year both achieved double-digit counter-trend growth.

Founder Securities stated that outperforming the industry average in securities companies' traditional proprietary investment business is an important reason for the company's performance in the first half of the year to achieve counter-market growth.

However, with the overall recovery of the stock market in May, the proprietary losses of many securities companies have improved significantly. Taking Guoyuan Securities as an example, Guoyuan Securities' net investment income + fair value changes were a loss of 717 million yuan in the first quarter of 2022 and a profit of 517 million yuan in the second quarter of 2022.

Analysts in West China Securities believe that the improvement of Guoyuan Securities' proprietary investment comes from the recovery of the equity market since late April, and on the other hand, it is due to the timely reduction of positions, structural adjustments, hedging risks, and focusing on advantageous sectors such as photovoltaic new energy and food and beverages. Fixed income business seized the opportunity of loose capital markets to increase the leverage ratio of interbank , and seized the opportunity of downward interest rates in the first half of the year, achieving a certain price difference return. The interbank repurchase reasonably arranged the repurchase period, reducing the overall financing cost.

How to maintain positive growth in investment returns in a volatile market? He Yagang, Chairman of Founder Securities Executive Committee and Secretary of the Board of Directors, said at the company's 2022 semi-annual performance briefing that Founder Securities' proprietary equity investment achieved positive returns in the first half of the year, mainly due to insisting on non-directional risk-neutral equity investment.

According to him, Founder Securities is committed to vigorously developing neutral strategies and vigorously developing non-directional businesses, and has been persisting for many years.

Guolian Securities stated that the company's equity investment business has always adhered to the concept of value investment, focusing on industries and companies with low valuations and good growth, and the yield rate has significantly outperformed Shanghai and Shenzhen 300 Index ; the fixed income business has continuously strengthened FICC's quantitative investment and research capabilities, and created characteristic fixed income products capital intermediary business, while expanding its business scale, strictly control risks and achieve stable returns.

Ping An Securities stated that the company consolidated its advantages in bond trading and seized the opportunity of interest rate cuts in the first half of the year, with investment returns increasing year-on-year.

Credit business "midterm exam" released

Net interest income has declined steadily, achieving 29.7 billion yuan in the first half of the year

China Fund News reporter Yan Ying

How is the credit business development of securities companies under the market fluctuation in the first half of the year?

China Securities Association data shows that 140 securities companies achieved operating income of 205.919 billion yuan and net profit of 81.195 billion yuan in the first half of 2022, down 11.40% and 10.06% year-on-year respectively. In terms of credit business, the net interest income of 140 securities companies was 29.659 billion yuan, a year-on-year decrease of 3.87%; net interest income accounted for 14.40% of revenue, an increase of 1.1 percentage points from the same period last year.

Overall, the net interest income of the securities industry has steadily decreased in the first half of the year, and the proportion of revenue continued to increase. From the perspective of business development, in the first half of the year, many listed securities companies improved their ability to raise securities and expanded their source channels, empowered credit business through financial technology , and further strengthened their comprehensive service capabilities for high-net-worth customers and institutional customers.

net interest income has been stable and decreased

in the first half of the year

After the introduction of the new pledge regulations, coupled with the need to clear market risks, in recent years, "scaling reduction" has become the "main theme" of various securities companies carrying out stock pledge. Judging from the market conditions in the first half of the year, the overall operating environment of stock pledge business has become more standardized, and the market size has declined steadily.

From the perspective of the market environment, the market size of margin financing and securities lending business decreased in the first half of 2022. Wind data shows that as of the end of June 2022, the market margin financing and securities lending balance was 1.60 trillion yuan, a decrease of 12.5% ​​from the end of the previous year; among which the financing balance 1.51 trillion yuan, a decrease of 11.8% from the end of the previous year, and the margin financing balance was 93.562 billion yuan, a decrease of 22.1% from the end of the previous year.

In terms of stock pledge business, the number of on-market pledged shares and market value scale continued to decline this year. At the end of June 2022, the number of pledged shares in the market was 408.055 billion shares, accounting for 5.4% of the total share capital; the market pledged market value was 3.62 trillion yuan, a significant decrease from the 4 trillion scale at the beginning of the year.

China Securities Association data shows that in the first half of 2022, the net interest income of 140 securities companies was 29.659 billion yuan, a year-on-year decrease of 3.87%; net interest income accounted for 14.40% of revenue, an increase of 1.1 percentage points from the same period last year. At the end of June 2022, the securities industry's stock pledge repurchase financing amounted to 213.698 billion yuan, a decrease of 5.9% from the end of the previous year. The industry trend of

is also reflected in various listed brokerages. According to data from Oriental Wealth Choice, among the 31 listed brokerage or broker concept stocks that have released their profit statement for the first half of 2022, a total of 16 have lower net interest income compared with the same period last year, including large brokerage companies such as China Merchants Securities, Guosen Securities, Guotai Junan, and Haitong Securities.However, due to the "double decline" in revenue and net profits of many securities companies, the proportion of net interest income has increased.

For example, Haitong Securities' 2022 semi-annual report shows that the net interest income of 3.088 billion yuan in the current period was achieved. As of the end of June 2022, the scale of Haitong Securities' financing business was 94.567 billion yuan, a decrease of 10.807 billion yuan from the end of the previous year, of which the scale of margin financing and securities lending business was 65.708 billion yuan, a decrease of 8.218 billion yuan from the end of the previous year; the scale of stock pledge business was 28.709 billion yuan, a decrease of 2.515 billion yuan from the end of the previous year.

Similarly, Everbright Securities' net interest income in the first half of 2022 was 1.238 billion yuan, a year-on-year decrease of 3%, mainly due to margin financing and bond interest spread . As of the end of June 2022, the margin financing and securities lending balance of Everbright Securities was 36.567 billion yuan, a decrease of 18.81% from the end of 2021.

In addition, the net interest income indicator of some small and medium-sized securities companies has negative values. For example, Western Securities' net interest income in the first half of 2022 was -100 million yuan, Huajin Securities' was -14.5256 million yuan, and Caixin Securities was -13.8473 million yuan. However, this is related to the impact of the expansion of current financing scale of related companies and the increase in interest expenditures.

Credit business has been focused on

In recent years, under the fierce "commission war", the industry's commission rate has generally been lowered, and the commission rate of the entire industry has been as low as "2.5 million". Against this background, credit business represented by margin financing and stock pledge has become the core competitiveness of securities companies to improve their profitability and enhance their means of serving customers.

Original Securities analyst Ouyang Shirui pointed out that capital-heavy business has gradually become the largest source of income for securities companies. The total proportion of capital-heavy businesses such as investment business and net interest income increased from 22% in 2008 to 48% in 2021. The leading brokerage firms have obvious advantages in capital strength, licenses, investment capabilities and capital utilization efficiency, and have stronger risk resistance.

How to strengthen the service capabilities of credit business while the market is sluggish? Judging from the measures taken by various listed securities companies, on the one hand, it is to improve the ability to raise securities and expand the source channels; on the other hand, it is to implement precise marketing, launch more refined and customized business plans, and strengthen the comprehensive service capabilities for high-net-worth customers and institutional customers.

In addition, the empowerment of financial technology is also essential. For example, Guotai Junan introduced that it has promoted the construction of the 3.0 system of the 3.0 system and deepened the digital transformation of to , and its market share has steadily increased. China Merchants Securities has also launched the "e-financing" platform for margin trading and an intelligent stock pledge management platform to further optimize the business process.

is self-evident. If you want to focus on credit business, you will inevitably need strong financial support. Since the beginning of this year, many listed securities companies such as CITIC Securities , Oriental Securities, Caitong Securities , Industrial Securities , etc. have launched refinancing plans, mostly using credit business (capital intermediary business) as the key investment direction.

For example, in Industrial Securities' recent 10 billion share allotment plan, half of it invested in financing and financing businesses. Industrial Securities said that margin financing and securities lending business is a capital-consuming business. Due to the scale of net capital , its company's business continues to grow, and it is urgent to replenish net capital, open up business growth space, and ensure the continuous growth of business scale.

In addition, the subsequent launch of Science and Technology Innovation Board market-making will further enrich the content of capital intermediary business. Kaiyuan Securities’ metalworking team pointed out that the market-making business of the Science and Technology Innovation Board is a customer-demand capital intermediary business, which is essentially competing with brokerage product creation, transaction hedging, risk control, channel sales and fund management capabilities. The expansion of business scale will help brokers improve leverage ratio and stabilize net profit gap .

is not afraid of market fluctuations, and wealth management has become the highlight of securities companies' performance in the first half of the year

China Fund News reporter Liu Ming

suffered from the Russian-Ukrainian war, the epidemic, etc. The domestic stock market was also relatively turbulent in the first half of this year, and the overall performance of securities companies was also poor. However, judging from the financial reports of major securities companies that have been disclosed, wealth management business resisted the decline in the first half of the year, and many of the retail indicators rose against the trend.

Guotai Junan Securities wealth management business revenue in the first half of the year was 6.199 billion yuan, down only 1.81% compared with the same period last year, significantly lower than the company's overall revenue of 10.79%. At the end of the first half of the year, Junhong APP users reached 38.41 million, an increase of 1.3% from the end of the previous year, with an average monthly active users of 6.93 million, an increase of 24.5% year-on-year. The number of personal fund accounts was 15.07 million, an increase of 3.2% from the end of the previous year. Both fund investment advisory and financial product sales have increased significantly, with the scale of public fund investment advisory at the end of the period of the period of 3.418 billion yuan, an increase of 38.6% from the end of the previous year. In the first half of the year, sales of financial products were 355.2 billion yuan, an increase of 11.4% year-on-year. Haitong Securities' operating income in the first half of the year was 4.852 billion yuan, a year-on-year decrease of 6.51%, which is also significantly better than the company's overall revenue decline in half. In terms of financial product sales, the average daily ownership of Haitong Securities products in the first half of the year achieved a year-on-year increase of 9.7% against the trend; among which the average daily ownership of non-monetary fund products increased by 27.2% year-on-year; and the average daily ownership of public offering products increased by 12.1% year-on-year.

Although Guosen Securities' brokerage and wealth management business has also declined, it is better than the overall company's revenue, and indicators such as the number of brokerage business customers continue to grow. As of the end of June 2022, the company's brokerage business customers reached 13.53 million; the total number of Jinyang Mobile Securities users exceeded 19 million; and the number of WeChat public accounts exceeded 2.7 million. At the end of 2021, the company's brokerage business customers reached 12.54 million; the total number of Jinyang Mobile Securities users exceeded 17.63 million, and the number of WeChat public account users was nearly 2.4 million. The decline in wealth management revenue of China Merchants Securities is also better than the company's overall business situation, and the number of normal trading customers is still growing. In the first half of the year, the company opened 1.3514 million new accounts. As of the end of June 2022, the company's normal trading customers was about 15.59 million, an increase of 21.61% year-on-year, and the custodial customer assets were 4.1 trillion yuan.

Guohai Securities' wealth management business revenue grew against the trend as the company's overall revenue dropped sharply. Retail wealth management revenue in the first half of the year was 570 million yuan, an increase of 0.88% year-on-year. In the first half of the year, a total of 134,700 new customers were opened, an increase of 25.92% year-on-year; the existing contracted assets increased by 13.96% compared with the end of last year, and the number of existing contracted customers increased by 45.71% compared with the end of last year.

Guotai Junan Securities stated that the wealth management business focuses on customers' comprehensive service needs, strengthens retail customer group operations, strives to build a headquarters empowerment center, and comprehensively improves the competitiveness of retail brokerage, product sales and investment advisory businesses. Guosen Securities said that in the first half of 2022, the company continued to consolidate the development concept of "customer-centered", continuously expanded its customer scale with a professional, differentiated and high-quality comprehensive service system, continuously optimized the expansion and services of institutions and high-net-worth customers, and made every effort to accelerate the transformation to the full value chain wealth management.

A senior leading brokerage firm in Shenzhen said that wealth is constantly shifting from real estate to capital market, and the demand for wealth management of residents' assets is increasing day by day. Securities companies are ushering in the era of wealth management. Even if the capital market fluctuates in the first half of the year, the cyclical nature of wealth management business is significantly weaker than that of sectors such as proprietary operations, and has become an important means for many brokerages to transform and improve their comprehensive service capabilities.

Edit: Xiaomo