Chinese brokerage stocks fell collectively. At press time, CITIC Securities (06030) fell 4.06% to HK$12.28; CITIC Construction Investment Securities (06066) fell 2.53% to HK$6.16; GF Securities (01776) fell 2.48% to HK$7.87; and Everbright Securities (06178) fell 2.3% to HK$5.51.
The Zhitong Finance App learned that Chinese brokerage stocks were collectively lower. As of press release, CITIC Securities (06030) fell 4.06% to HK$12.28; CITIC Construction Investment Securities (06066) fell 2.53% to HK$6.16; GF Securities (01776) fell 2.48% to HK$7.87; and Everbright Securities (06178) fell 2.3% to HK$5.51.
According to Open Source Securities, the net profit of the 2024Q1 listed brokerage firm was 28.8 billion yuan, -32% year-on-year, and +61% month-on-month, lower than our expectations. Core revenue was under year-on-year pressure, and management fee revenue declined year-on-year, showing “cost reduction and efficiency”. The performance of each brokerage firm is divided, mainly due to differences in the proprietary structure. Policy-side supervision will become stricter, and leading mergers, acquisitions and restructuring will be encouraged. Industry concentration will further increase, and the trend of differentiated development of small and medium-sized institutions will become more obvious.
Cinda Securities pointed out that there is a lot of controversy in the current market over whether the brokerage sector is in the market. Some voices believe that the industry is cold in winter and that fee cuts affect industry profits, but in our framework, economic stabilization, liquidity easing, and policy strength are the three core variables, all in 2009, 2012, and 2019. The bank believes that the current “political nature” of finance advancing Chinese-style modernization or indicates the nature of service technology after future market improvements; the “popular nature” of serving the real economy shows that there is no contradiction between the “release” of building a first-class investment bank and the “management” of “compacting responsibility,” and that business lines serving the capital market are expected to usher in ROE growth driven by leverage and profitability.