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Source: international Financial News
Original Zhu Lantern
Since the beginning of this year, the A-share market has continued to fluctuate, the pace of IPO has slowed down, and the investment banking and proprietary business of securities firms in the first quarter are "double declines" compared with the same period last year, with a dismal start.
According to Choice data, revenue of 51 brokerage concept listed institutions declined in the first quarter compared with the same period last year.ArcadealleyballThere were 42 companies, and 44 companies had a year-on-year decline in net profit. In addition, Jinlong shares, Guolian Securities, Tianfeng Securities and even losses.
"double kill" of self-management and investment bank
The performance reports of 51 securities concept listed institutions in the first quarter of this year were all released. Among them, revenue fell by 42, Tianfeng Securities and other 8 institutions by more than 40%, home net profit by 44, and Guolian Securities and other 20 institutions by more than 40%.
Some analysts pointed out to the International Finance News that the decline in investment banking and proprietary business is the main reason for the overall poor performance of securities firms in the first quarter of this year. Investment banking business, affected by the slowdown in the pace of IPO since the second half of last year, securities firms investment banking business significantly shrank, performance declined significantly, this trend has continued to this day. Compared with the first quarter of last year, investment bank net income generally fell.
Net income of 33 of the 43 listed brokerages fell year-on-year in the first quarter of this year, according to Choice. The head institutions were more obviously affected. The net income of investment banks in the first quarter of Citic Securities was 8%.Arcadealleyball.69 billion yuan, down 56% from 1.98 billion yuan in the same period last year; Huatai Securities and China International Capital Corporation's net investment bank income fell by more than 25% in the first quarter compared with the same period last year; and Citic Construction Investment and Haitong Securities dropped 59% and 54% respectively in the first quarter.
The net income of investment banks of small and medium-sized securities firms fluctuates greatly. In the first quarter of this year, the net income of Hualin Securities investment bank fell 74% to 3 million yuan compared with the same period last year, while the net income of Societe Generale Securities, Guohai Securities and Central Plains Securities all fell by more than 60%. Hongta Securities, which relies too much on its own business, has been talking about adjusting its business structure, and its net income rose 402% to 18 million yuan in the first quarter compared with the same period last year.
There are also some investment banking business as the facade of the performance of small and medium-sized securities firms, Guojin Securities, Soochow Securities, Zhongtai Securities and other investment banks' net income declined to varying degrees. Cheung Kong Securities performed well in the first quarter, with net income of investment banks rising 110 per cent year-on-year to 62 million yuan. Although Dongxing Securities was once mired in a storm of public opinion that the quality of sponsors was not high, the net income of investment banks in the first quarter was still considerable, boosting overall performance.
At the beginning of this year, A-shares continued their downward trend until they bottomed out in early February. The performance of securities firms was also affected, with 35 of the 43 listed brokerages having a year-on-year decline in net income from their own business. Citic Securities, Shenwan Hongyuan and other head institutions have all declined by no more than 20%, while Huatai Securities, China International Capital Corporation, CITIC Construction Investment and other head institutions have all experienced a decline of more than 40% in net income, which is a drag on overall performance.
The head brokerage fell generally.
Head brokerage revenue in the first quarter, net profit generally declined compared with the same period last year. Among them, the revenue of Citic Securities fell 10.38% to 13.755 billion yuan compared with the same period last year, and the net profit of Guotai Junan dropped 14.05% to 7.983 billion yuan, and the net profit of Guotai Junan dropped 18.13% to 2.489 billion yuan. China Galaxy's revenue fell 17.06 per cent year-on-year to 7.214 billion yuan, while net profit fell about 27.46 per cent year-on-year to 1.631 billion yuan.
Huatai Securities ranked fourth with revenue of 6.1 billion yuan in the first quarter, down 32%, and its net profit fell about 29% to 2.3 billion yuan compared with the same period last year. Shen Wanhongyuan and Guangfa Securities's first-quarter net profit fell by about 31 per cent and 29 per cent respectively compared with the same period last year. It is worth noting that the performance of Haitong Securities slumped last year and continued to decline in the first quarter of this year, mainly due to a decline in investment income and other business income. Its revenue fell by about 44% to 4.8 billion yuan compared with the same period last year, and its net profit fell by about 63% to 900 million yuan compared with the same period last year. In addition, Citic Construction's revenue and return net profit fell by 36% and 49% respectively compared with the same period last year.
China International Capital Corporation, known as the "nobleman of investment banking", also had a dismal performance in the first quarter, with declining investment banking performance as one of the main reasons. Its revenue fell about 38 per cent year-on-year to 3.9 billion yuan, ranking 11th in the industry; its net profit fell about 45 per cent year-on-year to 1.2 billion yuan, ranking ninth in the industry. Zheshang Securities ranked 10th in revenue in the first quarter, down 21.26% from the same period last year, while its net profit fell slightly to 400 million yuan, of which investment income turned into a loss compared with the same period last year.
Differentiation of small and medium-sized securities firms
The performance of small and medium-sized securities firms is divided, with some falling sharply compared with the same period last year and others rising against the market.
Jinlong shares, Tianfeng Securities and Guolian Securities ranked bottom in revenue, with a decline of more than 70%, and the net profit of returning to their mother fell sharply compared with the same period last year. Among them, the loss of Jinlong shares expanded compared with the same period last year, and the net profit of Guolian Securities and Tianfeng Securities changed from the profit of the same period last year to a loss. The decline in investment income is one of the main reasons for the decline in the performance of the three institutions. Tianfeng Securities also said that it is mainly due to the reduction of investment income and fee and commission net income in the current period.
The reporter learned that Jinlong shares hold 67.78% of Zhongshan Securities and 40% of Dongguan Securities, mainly relying on the two to carry out securities business. Affected by the downward market, Jinlong shares have experienced a decline in operating performance and a loss in recent years. For the decline in revenue this year, the agency explained that it was mainly due to the decline in fair value change income and investment income, and its investment income fell by nearly 39%, mainly due to the decrease in net profit of Dongguan Securities. In order to reduce the debt ratio and optimize the financial structure, Jinlong shares plan to transfer the shares held by Dongguan Securities.
Different from the path of Jinlong shares selling assets, Guolian Securities is absorbing Minsheng Securities, which has entered a substantive stage. With regard to the poor performance in the first quarter of this year, Guolian Securities explained that it was mainly due to the poor performance of the domestic securities market index and trading activity in the first quarter, the downward risk appetite of investors, and the decline in profits in the equity investment business affected by fluctuations in the securities market. Fluctuations in the securities market led to a decrease in income from the disposal of financial instruments, with a loss of 868 million yuan on investment income in the first quarter, a sharp drop of about 246% from the same period last year.
In the first quarter of this year, when the performance of securities firms was generally bleak, Dongxing Securities, Zhongyuan Securities, Nanjing Securities, Capital Securities, and Founder Securities ran into dark horses, with revenue and net profit attributable to the parent both rising year-on-year. In terms of business segments, Capital Securities 'net income from asset management business in the first quarter increased by 212% year-on-year, which also contributed to a year-on-year increase in its parent net profit by nearly 25%. Nanjing Securities, Founder Securities, and Zhongyuan Securities all recovered in net income from their self-operated businesses, supporting the increase in net profit attributable to the parent.
In addition, the performance of Dongxing Securities has attracted much attention. In recent years, under the reform of the registration system, the institution's investment banking business has developed rapidly, but the recommendation project was investigated for suspected fraud, and the regulatory authorities pointed out the need to improve the quality of practice. In 2023, affected by factors such as the slowdown in IPO pace, Dongxing Securities 'net income from investment banking business fell by 49% year-on-year. In the first quarter of this year, Dongxing Securities's revenue increased by 113% year-on-year to 1.98 billion yuan, and its parent's net profit increased by 64% year-on-year to 360 million yuan. Among them, investment bank net income increased by 32% year-on-year to 116 million yuan, and self-operated business net income increased by 136% year-on-year to 554 million yuan.
