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Since the first semi-annual report of brokerage stocks was disclosed by Eastmoney on August 9, 8 brokerage stocks have released their 2024 semi-annual reports. Combined with the brokerages that previously announced their performance reports, the performance of 15 brokerage stocks is now known. Among the 15 brokerages, 13 saw a decline in revenue, accounting for 86.67%; 10 saw a decline in net profit attributable to their parent companies, accounting for 66.67%.

Specifically from the perspective of each business line, among the 7 securities firms with comparable data:

In terms of brokerage business, there was a slowdown, with an average year-on-year decline of 9.1%;

In terms of investment banking business, there was a significant decline, with an average year-on-year decline of 44.45%;

In terms of asset management business, the overall business grew against the trend, with an average year-on-year increase of 29.77%;

In terms of net interest income, the average year-on-year decline was 21.97%;

In terms of proprietary business, there was a clear differentiation, with three companies experiencing positive growth and four experiencing negative growth. For example, First Capital's proprietary business revenue increased by 40.18% year-on-year in the first half of the year, while Zhejiang Securities saw a year-on-year decline of 35.12%. The average year-on-year decline for the seven companies was 3.19%.

13 out of 15 securities firms saw a decline in net profits

Among the 15 brokerage stocks, 13 saw a year-on-year decline in revenue in the first half of the year, accounting for 86.67%. Four of them saw a year-on-year decline in revenue growth of more than 10%, namely Everbright Securities (-32.03%), Western Securities (-15.39%), Xiangcai Securities (-15.19%), and Eastmoney (-14%).

The brokerages that saw year-on-year revenue growth were Huaan Securities and First Capital, with their revenue in the first half of the year increasing by 2.95% and 5.47% year-on-year respectively.

Among the securities firms that have disclosed their revenue performance, the top 10 are Orient Securities (8.571 billion yuan), Zheshang Securities (8 billion yuan), Guosen Securities (7.757 billion yuan), Soochow Securities (5.051 billion yuan), East Fortune (4.945 billion yuan), Everbright Securities (4.2 billion yuan), Founder Securities (3.722 billion yuan), Western Securities (3.329 billion yuan), Guoyuan Securities (3.084 billion yuan), and Huaan Securities (1.962 billion yuan).

In terms of net profit performance, among the 15 securities companies, 10 had negative growth in net profit attributable to their parent companies in the first half of the year, accounting for two-thirds, while the other 5 had positive growth.

The five securities firms whose net profit attributable to shareholders of the parent company declined significantly in the first half of the year were Guohai Securities (-63.45%), Guosheng Financial Holdings (-55.04%), Xiangcai Securities (-46.3%), Everbright Securities (-41.87%), and Soochow Securities (-16.12%).

The five securities firms with positive growth in net profit attributable to parent companies are First Capital (26.56%), Orient Securities (11.02%), Guoyuan Securities (9.44%), Huaan Securities (8.65%), and Harbin Investment Group (6.6%).

There were seven brokerage firms whose net profits attributable to parent companies exceeded 1 billion yuan in the first half of the year, namely East Fortune (4.056 billion yuan), Guosen Securities (3.139 billion yuan), Orient Securities (2.111 billion yuan), Everbright Securities (1.391 billion yuan), Founder Securities (1.351 billion yuan), Soochow Securities (1.165 billion yuan), and Guoyuan Securities (1 billion yuan).

Brokerage: All 7 brokerage firms with comparable data declined

Among the securities firms that have disclosed their information, most of their business lines performed poorly, but their asset management business showed a counter-trend growth.

In terms of brokerage business, the seven securities firms that have disclosed their net income from brokerage business all experienced a year-on-year decline, namely Guosen Securities (-4.65%), Founder Securities (-6.49%), Zheshang Securities (-18.36%), Soochow Securities (-9.54%), Western Securities (-11.08%), Sealand Securities (-10.71%), and First Capital (-14.35%).

The net income from brokerage business in the first half of the year were: Guosen Securities (2.236 billion yuan), Founder Securities (1.706 billion yuan), Zheshang Securities (1.251 billion yuan), Soochow Securities (830 million yuan), Western Securities (426 million yuan), Sealand Securities (413 million yuan), and First Capital (179 million yuan).

Investment banks: Average decline of more than 40%

In the first half of the year, the revenue of securities firms' investment banking business declined significantly. The seven securities firms that have disclosed their revenues saw the decline in investment banking revenues: Guosen Securities (-45.67%), Soochow Securities (-46.16%), Zheshang Securities (-39.92%), First Capital (-15.46%), Western Securities (-60.49%), Founder Securities (-38.33%), and Sealand Securities (-53.70%).

The net income of investment banking business in the first half of the year was specifically for Guosen Securities (394 million yuan), Soochow Securities (364 million yuan), Zheshang Securities (286 million yuan), First Capital (103 million yuan), Western Securities (85 million yuan), Founder Securities (79 million yuan), and Sealand Securities (49 million yuan).

Asset management: 30% growth against the trend

For the seven securities firms with comparable data, the average net income from asset management business increased by 29.77% year-on-year in the first half of the year.

Among the seven securities firms that have disclosed their asset management business data, six have grown against the trend, namely Guosen Securities (94.35%), Zheshang Securities (16.50%), Founder Securities (32.40%), Sealand Securities (15.08%), Soochow Securities (76.44%), and Western Securities (82.40%). The other one that saw a slight decline was First Capital (-0.83%).

The specific income from asset management business in the first half of the year was RMB 467 million for First Capital (RMB 467 million), Guosen Securities (RMB 395 million), Zheshang Securities (RMB 206 million), Founder Securities (RMB 122 million), Sealand Securities (RMB 99 million), Soochow Securities (RMB 89 million), and Western Securities (RMB 80 million).

Interest: Net income fell by more than 20% on average

Among the seven securities firms, three had positive year-on-year growth in net interest income in the first half of the year, namely Zheshang Securities (15.1%), Soochow Securities (8.34%), and Guohai Securities (1.67%), and Western Securities saw its losses narrow; four had negative growth rates, namely First Capital (-31.1%), Founder Securities (-33.34%), and Guosen Securities (-50.5%).

The net interest income in the first half of the year was specifically for Soochow Securities (650 million yuan), Founder Securities (534 million yuan), Guosen Securities (489 million yuan), Zheshang Securities (401 million yuan), Guohai Securities (204 million yuan), First Capital (47 million yuan), and Western Securities (-106 million yuan).

Self-operated: obvious differentiation, three increases and four decreases

The growth rates of proprietary businesses of seven securities firms in the first half of the year were severely differentiated. Three had positive growth rates, namely Guosen Securities (1.76%), Founder Securities (5.95%), and First Capital (40.18%); four had negative growth rates, namely Zheshang Securities (-35.12%), Guohai Securities (-15.68%), Soochow Securities (-11.70%), and Western Securities (-2.10%).

The specific income from proprietary businesses in the first half of the year were as follows: Guosen Securities (3.522 billion yuan), Western Securities (1.397 billion yuan), Soochow Securities (1.301 billion yuan), Founder Securities (1.202 billion yuan), Zheshang Securities (575 million yuan), First Capital (566 million yuan), and Sealand Securities (391 million yuan).

Asset allocation and risk control capabilities are the key to investment success

Huachuang Securities research report said that the total operating revenue (excluding other business revenue) of 43 listed securities companies in the second quarter of 2024 is expected to be 101.3 billion yuan (-9% year-on-year), and the net profit attributable to the parent is 37.5 billion yuan (-3.8% year-on-year); the total operating revenue in the first half of the year is 190.1 billion yuan (-16.5% year-on-year), and the net profit attributable to the parent is 66.8 billion yuan (-18.4% year-on-year).

According to the forecast of business segments, asset-light business declined, while the revenue of self-operated business increased by RMB 6.4 billion year-on-year, which may be the only main business to increase. Among them, the revenue of brokerage business was RMB 23.3 billion (-15% year-on-year/+2% month-on-month), the revenue of investment banking business was RMB 7.2 billion (-45.7% year-on-year/+6.6% month-on-month), the revenue of asset management business was RMB 11.7 billion (-2.2% year-on-year/+7.1% month-on-month), the revenue of self-operated business was RMB 38.9 billion (+19.5% year-on-year/+16.6% month-on-month under the low base last year), and the revenue of credit business was RMB 8 billion (-37.2% year-on-year/+13.1% month-on-month).

Dongxing Securities Research Report pointed out that the trend of strict supervision continues, and many businesses of securities companies such as investment banking and credit have been affected. Since the beginning of the year, the trading volume has shown a slow downward trend, which has put pressure on the wealth management business of securities companies. While the investment banking business is building its own hard power, it is waiting for the signal of regulatory relaxation. Market fluctuations may continue, and asset allocation capabilities and risk control capabilities will become the "decisive hand" of securities investment.

Ran Zhaobang, an analyst at China Cinda Securities, believes that brokerage business performance may be under pressure due to the downward trend of market beta; IPO supervision is becoming stricter, and investment industry performance is under pressure; the scale of margin trading in the market is declining, and the scale of credit business is shrinking; proprietary trading is still the deciding factor, and the downward trend in interest rates may still contribute positive returns to securities firms' proprietary bonds.