On the evening of April 24, China Merchants Securities released its 2022 first quarter report, showing that China Merchants Securities achieved operating income of 3.696 billion yuan and net profit of 1.490 billion yuan in the first quarter of this year, down about 38% and 43% year-on-year respectively. China Merchants Securities said that in the first quarter of 2022, market volatility has intensified, the epidemic situation is still severe, the company’s business activities are facing challenges, and its performance is under pressure.
The “Daily Economic News” reporter found that in the first quarter of this year, except for the investment banking business income of China Merchants Securities, which achieved a year-on-year increase, the rest of the business income declined to varying degrees. In addition, the decline in credit business income is also very obvious, with net interest income falling by about 63% year-on-year. Meanwhile, credit impairment losses nearly doubled.
Only investment banking revenue increased year-on-year
This evening, the 2022 first quarter report released by China Merchants Securities showed that in the first quarter of this year, China Merchants Securities achieved operating income of 3.696 billion yuan, and net profit attributable to shareholders of listed companies was 1.490 billion yuan, down 38.01% and 42.99% year-on-year respectively; Earnings per share was 0.15 yuan, a year-on-year decrease of 46.43%; the weighted average return on equity was 1.36%, a year-on-year decrease of 1.27 percentage points.
China Merchants Securities said frankly that in the first quarter of 2022, market volatility has intensified, the epidemic situation is still severe, the company’s business activities are facing challenges, and its performance is under pressure.
The reporter further sorted out and found that in terms of business income, in the first quarter of this year, China Merchants Securities brokerage business income was 1.649 billion yuan, investment banking business income was 449 million yuan, asset management business income was 207 million yuan, and credit business income (net interest income) 188 million yuan , the income from self-operated business (caliber: investment income – investment income in associates and joint ventures + income from changes in fair value) 176 million yuan. In addition, other business income was 304 million yuan.
However, from the perspective of changes, except for investment banking business income, all other business income declined year-on-year. In the first quarter of this year, investment banking revenue increased by 8.66% year-on-year. According to Wind statistics, according to the issuance date, the total underwriting (equity + debt) amount of China Merchants Securities in the first quarter of this year reached 82.424 billion yuan, ranking 8th in the industry; among which the underwriting amount of equity projects was 18.536 billion yuan, ranking 6th in the industry .
In January this year, Yidong Electronics was successfully listed on the Growth Enterprise Market, raising a total of 2.174 billion yuan. China Merchants Securities acted as the sponsor and lead underwriter. Yidong Electronics has a total issuance fee of 203 million yuan, and the issuance rate is about 9.34%. China Merchants Securities can obtain about 179 million yuan in sponsorship and underwriting income. In addition, in March this year, Zhejiang Hengwei was successfully listed on the Growth Enterprise Market, raising a total of 861 million yuan. China Merchants Securities acted as the sponsor and lead underwriter. The total issuance cost of Zhejiang Hengwei is 105 million yuan, and the issuance rate is about 12.16%. China Merchants Securities can obtain 80.1036 million yuan in sponsorship and underwriting income.
The sharp decline in self-operated income has seriously dragged down performance
Compared with the growth of investment banking business income, China Merchants Securities’ brokerage business income fell by 11.57% in the first quarter of this year, asset management business income fell by 21.65%, and net interest income from credit business fell by 63.01%. China Merchants Securities explained that it was mainly due to the increase in interest expenses. In addition, self-operated income declined the most, down 90.97% year-on-year.
In terms of self-operated income, China Merchants Securities achieved investment income of 1.786 billion yuan in the first quarter, down 9.91% year-on-year; investment income from associates and joint ventures was 405 million yuan, up 10.83% year-on-year; fair value change income -1.206 billion yuan, It fell 465.49% year-on-year, China Merchants Securities said, mainly due to the impact of changes in the valuation of financial instruments. Therefore, on the whole, the company’s self-operated income was 176 million yuan, down 90.97% year-on-year, which also greatly dragged down the overall income in the first quarter of this year.
The Shanxi Securities research report shows: “Since the beginning of the year, due to geopolitical changes and the spread of the epidemic exceeding expectations, the secondary market has intensified volatility, and the average daily turnover has also shrunk, which has a certain impact on the performance of securities companies. At the same time, Shenwan Hongyuan Securities Research also believes that although the newly issued funds were obviously under pressure in the first quarter, the trading volume, two financings, IPOs, and public offerings all increased year-on-year. .
It is worth mentioning that in addition to the pressure on performance caused by the decline in most business income, China Merchants Securities also suffered a credit impairment loss of 130 million yuan in the first quarter, a year-on-year increase of 99.45%. China Merchants Securities said that the increase was mainly due to the increase in expected credit losses in the provision of financing business.
