中國(guó)經(jīng)紀(jì)人行業(yè)：A股有些過(guò)界更看好H股

1、Equity Research Asia Pacific | ChinaChina BrokersChina BrokersSectorAappearstohaveovershot,preferHDiversified Financials | Assuming CoverageFigure1:SectoraverageP/BAvsHsharesA share P/B3.2xA share P/B2.8xPricePricebookratio(X)2.0 x1.6x1.2x0.8xResearch AnalystsYiran Zhong852 2101 6125 HYPERLINK mailt

2、o:yiran.zhong yiran.zhongCharles Zhou, CFA852 2101 6177 HYPERLINK mailto:charles.zhou charles.zhou0.4xH share P/BRichie JiangJan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 Jul-19Source: Company data, Credit Suisse estimatesWe assume coverage on the China B

3、rokers Sector.Capitalmarketreformusheringthreestructuraldrivers.Headinginto2H2019,the pace of regulatory loosening and capital market reform has notably accelerated. We see recent reform initiatives materialising in three major areas for Chinas Securities industry going forward: (1) Investment banki

4、ng business: Promoting the role of securities companiesinfacilitatingdirectfinancing;(2)Derivativeproducts:Enhancingtheavailability of risk management tools to attract long-term/institutional investors and generating estimated revenue contributions of Rmb6.0 bn/Rmb7.3 bn/Rmb3.0 bn from theexpansion

5、of exchange-traded options/OTC equity options/index futures in FY20E; (3) A differentiatedapproachtoregulatingChinesebrokersaimedatcultivatingindustryleaders.Market outlook and key assumptions. Looking ahead to 2020, our strategist Vincent Chan expects a lacklustre market performance for A-shares, w

6、ith 12-month forward index target for CSI 300 at 28,000 by end-2020E, implying a flat return (-1.6%). This is on the back of 10% YoY earnings growth and P/E multiple contraction to 10.4x. Against this backdrop, we expect average A-share average daily turnover (ADT) to grow by 10% YoY to Rmb570 bn in

7、 2020E (vs Rmb518 bn for 2019E), given (1) 30% increase in total stock market cap, while (2) velocity declines to 224% in 2020E vs 262%in 2019E.Investment calls. Our FY20E aggregate earnings is 5% lower than consensus, given a relatively conservative house view on A-shares. We suggest taking profits

8、 in A-listed brokersgiventheirrelativelyexpensivevaluations.ForH-shares,weexpectleadingbrokers with strong capital base, investment banking franchise, and institutional client base to disproportionatelybenefitfromthedifferentiated-approachtoregulationsoveramulti-year horizon. For our preferred picks

9、 of HTSC, CITICS, and CICC, we expect ROE expansions by 2.0/0.1/0.4 pp to 7.3%/8.2%/10.3% in FY20E vs FY19. Valuations. The H-listed China brokers are trading at a depressed P/B multiple of 0.77x on rolling 12-month forward basismore than 1SD below their three-year average. By contrast, A-listed bro

10、kers are trading at 1.36 P/B, near the three-year average of 1.43x, after a 30% expansion YTD. Key risks include liquidity tightening and lower-than-expected ADT.852 2101 6198 HYPERLINK mailto:richie.jiang richie.jiangDISCLOSURE APPENDIX AT THE BACK OF THIS REPORT CONTAINS IMPORTANT DISCLOSURES, ANA

11、LYST CERTIFICATIONS,LEGAL ENTITY DISCLOSURE AND THE STATUS OF NON-US ANALYSTS. US Disclosure: Credit Suisse does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the Firm may have a conflict of interest that couldFocus chartsFigure2

12、:Netcapitalposition1H19vsFY18Figure3:Proportionofinstitutionsincustomerbrokerage deposits10050%Total business 46%43%40%8040% Rmb bn6030%Rmb bn4020%2010%CITICSGTJAGalaxyGFSCMSDFZQCICCCITICS00%CITICSGTJAGalaxyGFSCMSDFZQCICCCITICS40%39%2223% % 2119%18%19%CICCDFZQCMSGalaxyGTJAGFSSource: Company data, Cr

13、edit Suisse estimatesSource: Company data, Credit Suisse estimatesCICCDFZQCMSGalaxyGTJAGFSFigure 4: ChinaOTC equity-linked options notional amount outstandingvstotalstockmarketcapNotional amounts: OTC equity-linked options (Rmb bn)Figure5:TheUSOTCequity-linkedoptionsnotionalamount outstandingvstotal

14、stockmarketcapNotional amounts: OTC equity-linked options (USD bn)20142015201620172018-20142015201620172018 % of market 0.8%0.6%0.4%0.2%0.0%-% of market cap (rhs)8%6%4%2%19981999199819992000200120022003200420052006200720082009201020112012201320142015201620172018Source:Wind,CreditSuisseestimatesSourc

15、e: BIS, Credit Suisse estimatesFigure6:MarketturnovervalueYoYchangevsaggregatenetFigure 7: China brokersFY19E P/B (H) vsROEincome growth 2019E2020E2021E2019E2020E2021EYoYTotal ROE ROE ICCCCMSCITICSGFStongGTJAHTSCCCMSCITICSGFStongGTJAHTSCGalax yP/B (2019E)Source: CEIC, Company data, Credit Suisse est

16、imatesSource: Company data, Credit Suisse estimatesA appears to have overshot, preferHCapital market reform ushering three structural driversHeadinginto2H2019,thepaceofregulatorylooseningandcapitalmarketreformhasnotably accelerated. We see recent reform initiatives materialising in three major areas

17、:Investment banking business: Promoting the role of securities companies in facilitating direct financing. With the successful launch of STAR Market in July, we expectSTARMarketsreforminitiativestoberolledoutonChiNext,andperhapsfurtheron the Main Board. Meanwhile, a reversal of tightened refinancing

18、 rules should encourage follow-on offering going forward. We expect total equity fundraising amount of Rmb1,077 bn/Rmb1,274 bn for FY2019E/20E, representing YoY growth of 3%/18%.Derivativeproducts:Enhancingtheavailabilityofriskmanagementtoolstoattract institutional investors. We expect more launches

19、 of derivative products and continued normalisation of index futures trading rules. While China brokers derivatives business remainssmallwithlimitedfinancialdisclosure,weexpectleadingbrokerswithstrongcapital positionandestablishedinstitutionalfranchisetobebetterpositioned.Weestimaterevenue contribut

20、ions of Rmb6.0 bn/Rmb7.3 bn/Rmb3.0 bn from the expansion of exchange- traded options/OTC equity options/index futures in FY20E, with HTSC benefiting the most (5.8% contribution to FY19 gross income).A to Chinese brokers: Intheofongoingopeningupofmarkettoisainregulating qualityto(1)businessinemerging

21、areasand (2) allowing to for Thisshouldhelpimproveforleadingvspeers,via working in high-ROE and operating with higher Counter-cyclical policy: Targeted easingWhatweobserveinthecurrenteasingcycleistherelativelytargetednatureofmonetaryeasing given elevated CPI as well as a differentiated regulatory ap

22、proach. Historical patterns suggest that regulatory loosening and liquidity easing cycles are both key drivers for brokers ROE expansion and share-price outperformance.Market outlook and key assumptionsLooking ahead to 2020, our strategist Vincent Chan expects a lacklustre market performance for A-s

23、hares, with 12-month forward index target for CSI 300 at 28,000 by end-2020E, implying a flat return (-1.6%). This is on the back of 10% YoY earnings growth and P/E multiplecontractionto10.4x.Againstthisbackdrop,weexpectaverageA-shareaveragedaily turnover (ADT) to grow by 10% YoY to Rmb570 bn in 202

24、0E (vs Rmb518 bn for 2019E).Investment recommendations: Prefer selective H- share listed leaders to A-share on valuationWhiletheimmediateearningsimpactofthenewreforminitiativesisstilllimitedonastand-alone basis, we expect leading brokers with strong capital base, investment banking franchise, and in

25、stitutionalclientbasetodisproportionatelybenefitfromthedifferentiatedregulatoryapproach over a multi-year horizon. For our preferred picks among the China brokersHTSC, CITICS, and CICC, we expect ROE expansions by 2.0/0.1/0.4 pp to 7.3%/8.2%/10.3% in FY20E vs FY19E. Meanwhile, the H-listed China bro

26、kers are trading at a depressed P/B multiple of 0.77xmorethanonestandarddeviationsbelowtheirthree-yearaverage.Bycontrast,A-listed brokers under our coverage are trading at 1.36x P/B, near the three-year average of 1.43x, after a 30% expansion YTD. Hence, we think they are relatively more vulnerable

27、to a conservative market outlook. Hence, we suggest taking profits of A-listed brokers and selectively position in the better-valued H-listed leaders.Table of ContentsAappearstohaveovershot,preferH3marketusheringthree3Counter-cyclical policy: Targeted easing3Market outlook andkeyassumptions3Investme

28、nt recommendations: Prefer selective H-share listed leaders to A-share on valuationCapitalmarketreformusheringthreestructuraldrivers7Investment banking business: Promoting the role of securities companies in facilitating directfinancingDerivative products: Enhancing the availability of risk manageme

29、nt tools to attract institutionalinvestorsAdifferentiatedapproachtoregulatingChinesebrokers:Cultivatingindustryleaders12 HYPERLINK l _TOC_250018 Counter-cyclical policy:Targetedeasing16 HYPERLINK l _TOC_250017 History lessons: Regulatory loosening are precursors to rising broker ROE16 HYPERLINK l _T

30、OC_250016 CiticSecurities26 HYPERLINK l _TOC_250015 Guotai Junan SecuritiesCoLtd28 HYPERLINK l _TOC_250014 HaitongSecurities30 HYPERLINK l _TOC_250013 HuataiSecurities32 HYPERLINK l _TOC_250012 GalaxySecurities34 HYPERLINK l _TOC_250011 GuangfaSecurities36 HYPERLINK l _TOC_250010 ChinaMerchantsSecur

31、ities38 HYPERLINK l _TOC_250009 Orient SecuritiesCoLtd40 HYPERLINK l _TOC_250008 CICC42 HYPERLINK l _TOC_250007 CiticSecurities44 HYPERLINK l _TOC_250006 Guotai Junan SecuritiesCoLtd46 HYPERLINK l _TOC_250005 HaitongSecurities48 HYPERLINK l _TOC_250004 HuataiSecurities50 HYPERLINK l _TOC_250003 Gala

32、xySecurities52 HYPERLINK l _TOC_250002 GuangfaSecurities54 HYPERLINK l _TOC_250001 ChinaMerchantsSecurities56 HYPERLINK l _TOC_250000 Orient SecuritiesCoLtd586612 December 2019China Brokers SectorTickerCompanyPriceMarketCapCredit Suisse ResearchLast closing Last closing 1 year12 December 2019China B

33、rokers SectorTickerCompanyPriceMarketCapCredit Suisse ResearchLast closing Last closing 1 yearRatings Target price UpsidePE (x)PB (x)ROE (%)600958.SSDFZQ (A)9.958,43455U3.7-63%56.532.330.21.341.301.252.4%4.1%4.2%Weighted-average30.021.451.375.3%7.6%7.7%BrokersPrice curr.USD mnUSD mn2018a2019e2020e20

34、18a2019e2020e2018a2019e2020e6030.HKCITICS (H)15.044,37946O17.818%17.412.912.01.071.010.966.2%8.1%8.2%2611.HKGTJA (H)12.262,1803O14.720%15.750.800.755.5%7.5%7.8%6886.HKHTSC (H)12.342,71118O15.526%16.812.311.10.880.920.875.3%8.0%8.3%6837.HKHaitong (H)8.083,52019N8.910%16.010.660.624.4%7.9%7.5%1776.HKG

35、FS (H)8.611,87210N8.93%0.690.640.605.1%7.1%7.8%6099.HKCMS (H)9.001,1281N9.11%0.820.770.726.8%8.9%8.7%6881.HKGalaxy (H)4.121,94314N4.47%13.070.540.514.4%6.6%6.4%3958.HKDFZQ (H)4.515922U3.9-14%23.050.530.512.4%4.1%4.2%3908.HKCICC (H)13.763,34721O17.225%14.961.161.068.9%9.9%10.3%Weighted-average15.710.

36、810.10.890.840.795.8%8.0%8.1%600030.SSCITICS (A)22.2131,044472U16.0-28%28.761.661.586.2%8.1%8.2%601211.SSGJTA (A)17.5418,72995U12.9-26%25.017.715.81.361.281.205.5%7.5%7.8%601688.SSHTSC (A)17.8918,700213U14.0-22%27.119.917.91.431.481.405.3%8.0%8.3%000776.SZGFS (A)13.9511,73187U8.0-43%24.715.451.095.1

37、%7.1%7.8%600837.SSHaitong (A)14.1616,279179U7.8-45%31.316.816.61.381.281.214.4%7.9%7.5%600999.SSCMS (A)17.1413,92647U8.7-49%25.918.918.01.751.631.536.8%8.9%8.7%601881.SSGalaxy (A)10.579,68085U4.2-60%37.123.823.41.621.541.474.4%6.6%6.4%Note: Priced as at 10 Dec 2019; O = OUTPERFORM, N = NEUTRAL, U =

38、UNDERPERFORM. Source: Company data, Credit Suisse estimatesCapital market reform ushering three structural driversHeading into 2H 2019, the pace of regulatory loosening and capital market reform has notably accelerated,especiallyfollowingthereleaseof12prioritiesofcapitalmarketliberalisationbythe Sta

39、teCouncilon10September2019,withregulatoryannouncementsswiftlyfollowing-through (Figure 22). We see recent reform initiatives materialising in three major areas for Chinas securities industry going forward: (1) Investment banking business: Promoting the role of securities companies in facilitating di

40、rect financing, (2) Derivative products: Enhancing the availability of risk management tools to attract long-term/institutional investors, and (3) A differentiated approach to regulating Chinese brokers: Cultivating industry leadersregulation biased towards cultivating industry leaders.Investment ba

41、nking business: Promoting the role of securities companies in facilitating direct financingWith the successful launch of STAR Market in July, we expect STAR Markets reform initiatives toberolledoutonChiNext,andperhapsfurtherontheMainBoard.Furthermore,areversalof tightenedrefinancingrulesshouldencour

42、agefollow-onoffering,whichpeakedatRmb1.7tnin 2016, compared to merely Rmb774/564 bn in 2018/YTD 2019. Overall, we expect total equity fundraising amount of Rmb1,077 bn/1,274 bn for FY2019E/20E, representing YoY growth of 3%/18%. Our scenario analysis below shows that CICCs net profit is most sensiti

43、ve to changes in equity fundraising amount; China Galaxy ranks last. STAR Market launch and reform implications for ChiNext: This years launch of STAR Market has been a remarkable event, given a short implementation period (eight months from announcement to launch) and the market-oriented practices

44、(especially registration-basedlisting,market-basedpricing,andco-investingmechanism),makingitan important pilot trial for potential wider adoption. On 8 2019, Yi Huiman indicated during his trip to that the IPO for will speed up. This follows the State to push ahead in the cityincluding to further im

45、prove the toenhanceChiNextinfor in new economy sectors. We expect STARtoberolledoutonandperhapsfurtherontheMain withbaseandfranchiseareforthenewregime:TheadoptedbySTARMarketandtobe forwideradoptionsbarforandthus,moreleading brokers with (1) strong that supports IPO pricing and risk (especially CITIC

46、S and (2) institutional client for strategic and CITICS and strong to co-invest by of with a two-year period. Among IPOs and under the Top 5 account for 40% of STAR IPO as of of rules: On 8 Nov 2019, CSRC a of for which the scope of eligible for investors, and the approval (1)scrappingtheofdebt-asse

47、tof45%toissuepublicon This brings in 244 additional as of (2) scrapping the of two for private placement (3) listed firms to find strategic investors; shortening the lock-up period for to months (from months); (5) period to 12 months 6 This is a of since 2016, when the follow-on offering at to merel

48、y bn in 2019.Weseerecentreforminitiativesmaterialising in three major areas for Chinas securities industry going forward: (1) Investment banking business, (2) Derivative products (3) A differentiatedapproachtoregulatingChinese brokers.Figure 9: No. of STAR Market IPOs by brokers under coverage, as o

49、f end-Nov 2019IssuedApprovedReviewingTotalHTSC51612CSC72312CITICS60511CICC5049GTJA4127CMS2057GFS4026Haitong2125Galaxy0022DFZQ0000Source: Wind, Credit Suisse estimatesFigure 10: No. of IPOs under review for brokers under coverage, as of end-Nov 2019Main BoardChiNextSME BoardSTARTotalCSC20135341CITICS

50、1475531CMS4711527GFS1373225Haitong993223CICC576422HTSC461617GTJA932216Galaxy11125DFZQ00000Source: Wind, Credit Suisse estimatesFigure11:Netcapitalposition1H19vsFY18Figure12:Proportionofinstitutionsincustomerbrokerage deposits10050%Total business 46%43%40%8040% Rmb bn6030%Rmb bn4020%2010%CITICSGTJAGa

51、laxyGFSCMSDFZQCICCCITICS00%CITICSGTJAGalaxyGFSCMSDFZQCICCCITICS40%39%2223% % 2119%18%19%CICCDFZQCMSGalaxyGTJAGFSSource: Company data, Credit Suisse estimatesSource: Company data, Credit Suisse estimatesCICCDFZQCMSGalaxyGTJAGFSFigure 13: Net profit sensitivity to equity fundraising amountScenario ASc

52、enario BBase caseScenario DScenario E2020E assumption (Rmb bn)6379551,2741,5921,911Chg from base case-50%-25%NA25%50.0%ChangeinnetprofitofmajorcoveredCICC 2020E net profit4,7064,7694,8324,8954,958Chg from base case-2.6%-1.3%NA1.3%2.6%GTJA 2020E net profit9,8009,8489,8979,9459,994Chg from base case-1

53、.0%-0.5%NA0.5%1.0%CITICS 2020E net profit13,53913,59413,64913,70313,758Chg from base case-0.8%-0.4%NA0.4%0.8%HTSC 2020E net profit9,0149,0459,0769,1079,138Chg from base case-0.7%-0.3%NA0.3%0.7%DFZQ 2020E net profit2,2902,2962,3022,3092,315Chg from base case-0.6%-0.3%NA0.3%0.6%CMS 2020E net profit6,3

54、376,3536,3696,3866,402Chg from base case-0.5%-0.3%NA0.3%0.5%Haitong 2020E net profit9,7819,8019,8229,8429,863Chg from base case-0.4%-0.2%NA0.2%0.4%GFS 2020E net profit7,1287,1387,1487,1597,169Chg from base case-0.3%-0.1%NA0.1%0.3%Galaxy 2020E net profit4,5644,5694,5734,5774,581Chg from base case-0.2

55、%-0.1%NA0.1%0.2%Source: Company data, Credit Suisse estimatesDerivativeproducts:Enhancingtheavailabilityofrisk managementtoolstoattractinstitutionalinvestorsInitiatives to improve derivative product offering appear to have accelerated in 2019, aimed at enhancing the access to more diversified tools

56、for managing risk. We believe the rise of the derivativesmarketisinevitableasthecapitalmarketshavebecomeincreasinglyimportantin providingdirectfinancingvsbankfunding,itshouldalsoassumemoreresponsibilityinproviding riskmanagement.ThisshouldimprovetheattractivenessofA-sharesforlong-term/institutional

57、investors as well as global investors. At the heels of lifting A-shares inclusion factor to 20% from 15%, MSCI pointed at four necessary pre-conditions for further increasing the A-share inclusion factor beyond the current 20%, the top amongst which is the availability of hedging tools to global ins

58、titutional investors.Lookingforward,weexpectmorelaunchesofderivativeproductsandcontinuednormalisation of index futures trading rules. While China brokers derivatives business remains small with limited financial disclosure, we expect leading brokers with strong capital position and established insti

59、tutional franchise to be better positioned. OTC The OTC equity has enjoyed strong momentum withmonthlyinnotionaltrackingbn,avsmonthly of Rmb56 bn in 2018. Still, the China OTC equity is nascent to developed markets: In the the total notional amount outstanding for OTC account for in to 0.6% in China

60、.A tiered-approach to regulating OTC derivative dealers: In May 2018, the CSRC published the “Notice on Further Strengthening the Supervision of OTC Options Business of Securities Companies”, setting out detailed rules on dealer management, target management, investor suitability, data submission, a