On April 27, CITIC Securities closed down 1.3%, with a stock price of 22.75 yuan and a total market value of 294.1 billion yuan, which has fallen below the 300 billion mark. Its stock price fell to 22.69 yuan during the session, setting a new low this year, and fell back to the l

text | Yang Wanli

CITIC Securities stock price hit a new low this year.

From April 20 to 27, CITIC Securities has already experienced a 6-consecutive market.

It is worth noting that as early as late January to early February this year, CITIC Securities had a 12-continuous market, which once caused an uproar in the market.

CITIC Securities , as a leading brokerage firm, is regarded by investors as one of the market trends. In 2015, the share price of CITIC Securities rose from around 10 yuan to 36 yuan. At that time, A shares was at the peak of the bull market.

In 2020, CITIC Securities rose by 18% throughout the year, and the stock price reached a maximum of 33.8 yuan. Last year, many blue-chip stocks were continuously sought after by institutions, and they had a wave of doubling.

However, after entering 2021, CITIC Securities has repeatedly experienced a negative decline, which has attracted market attention.

Is there something wrong with the company's fundamentals?

2020 annual report data shows that CITIC Securities achieved revenue of 54.383 billion yuan, a year-on-year increase of 26.06%; and achieved attributable net profit of 14.902 billion yuan, a year-on-year increase of 21.86%. According to statistics from the Public Securities News, CITIC Securities revenue and net profit both rank first in the industry.

It is worth noting that CITIC Securities has now become the first securities company in China with an asset scale of over one trillion yuan.

From a fundamental perspective, CITIC Securities performed well, and there was no obvious problem. Further analysis shows that behind the sluggish share price of CITIC Securities may be related to other factors.

In the scale shareholder group, many investors analyzed the reasons for the sluggish share price of CITIC Securities , and there are 4 points in total.

The first reason is that the market liquidity is tightening, and the incremental funds are not enough to support brokerage stocks to emerge from a big market.

Brokerage stocks are more sensitive to market liquidity. When there is a lot of money in the stock market, brokerage stocks are prone to rise, and when the money in the stock market decreases, brokerage stocks will perform normally overall.

China's March financial data showed that M2 increased by 9.4% year-on-year, lower than expected 9.6%; the increase in social financing scale was 3.34 trillion yuan, lower than expected 3.6 trillion yuan; new RMB loans were 2.73 trillion yuan, higher than expected 2.5 trillion yuan.

M2 and social financing scale are important indicators for measuring macro liquidity. Since both indicators are inferior to market expectations, it indirectly confirms investors' views on the tightening of domestic market liquidity.

The second reason is that the market sentiment has been generally cautious since this year. Judging from the transaction amount, the transaction amount of A-shares has not exceeded one trillion for many consecutive days after the Spring Festival, which has a certain impact on the performance of securities stocks.

Data on December 31, 2020 showed that brokerage business accounts for 26.48% of the total revenue of CITIC Securities , which is higher than the revenue of other businesses.

Public information shows that brokerage business refers to the business of a securities company accepting customer entrustment through the securities business department established by it, and acting as a proxy for customers to buy and sell securities in accordance with customer requirements.

Generally speaking, securities companies' brokerage business income will increase only when investors trade actively. Once the market transaction amount drops, securities companies' brokerage business will also be affected.

The third reason is that rumors of brokerage mergers and acquisitions have been repeatedly failed, and some stocks have even staged a roller coaster market, which has affected some investors' enthusiasm for participating in brokerage stocks.

From the market rumors that CITIC Securities and CITIC Construction Investment are planned to merge, to the rumor that other securities companies have merged, there are no formal mergers cases so far.

. Some brokerage stocks rose after being stimulated by the news, causing many investors who chased highs to be trapped. For example, on April 22 this year, it was rumored that Ping An Securities and Founder Securities were planning to merge. On that day, Founder Securities hit the daily limit during the session. As the news was denied, Founder Securities closed with a stock price of rise fell back to 4.77%.

In addition, institutions' participation in the securities sector is weaker than the bank sector.A group of public fund managers have significantly increased their holdings in bank stocks, but have neglected securities stocks.

As of the first quarter of this year, 162 public funds held CITIC Securities shares, but most of them were index funds. Let’s look at China Merchants Bank . In the first quarter of this year, 1,022 public funds held their shares. star public fund managers such as Zhang Kun , Lao Jienan, and Tan Li increased their positions significantly.

Due to the lack of the driving effect of celebrity public funds, even if retail investors and hot money buy, it is difficult to have a continuous impact on securities stocks represented by CITIC Securities . Even if there is an increase or rebound, the stock price will soon be knocked back to its original shape.

We have also noticed that not only , CITIC Securities , the overall performance of the entire securities sector this year is sluggish.

A set of data we counted shows that from the beginning of the year to the present, only three securities concept stocks have achieved positive growth, namely State Grid Yingda, Industrial Securities , and Caida Securities.

Another set of data shows that from the beginning of 2021 to the present, 28 securities concept stocks have fallen by more than 20%, including companies with a market value of over 100 billion yuan, including CITIC Securities , CICC, CITIC Construction Investment , China Merchants Securities , etc.

brokerage stocks fell collectively, and the reason is that it has certain commonalities with CITIC Securities , that is, it includes factors such as tightening liquidity and weak institutional participation in the brokerage sector. Of course, the decline of a small number of securities stocks is also related to changes in their own fundamentals.

As securities stocks fell sharply, do you think the investment value has appeared? Everyone is welcome to leave a message below!