Brokerage AH stock premium rate narrowed five to below 100%
Our reporter Zhou Shangding
Although the A-share brokerage stocks ushered in a big rise yesterday, with an overall increase of over 6%, all 40 A-share listed brokerage stocks were still in decline during the year, with an average decline of more than 18% (Caida Securities is newly listed and not included. Same below).
Different from the general decline of A-share listed brokerage stocks, the share price performance of Chinese brokerage stocks in the Hong Kong stock market has been more divergent. The average drop of 14 stocks this year has been 1.6%, and the share price of leading CITIC Securities has risen more than 18%.
Due to the difference in the performance of the stock prices of the securities companies in the two places, the premium rate of the AH shares of the securities companies has also been narrowing.
3 brokerage AH shares
The premium rate exceeds 200%
According to Wind statistics, a reporter from the Securities Daily shows that currently, there are a total of 132 AH shares in the A-share and H-share markets (listed on both A-shares and H-shares at the same time). As of May 14, all of them have generated premiums.
Among brokerage stocks, Guolian Securities has a premium rate of 393.77%, ranking third among the 132 AH stocks mentioned above; the premium rate of AH shares of China Securities, China Securities is also ranked in the top ten of the 132 AH stocks, the premium rate Both exceed 200%.
In addition, the AH share premium rates of 6 brokers including Everbright Securities, CICC, Shenwan Hongyuan, China Galaxy, Orient Securities, and China Merchants Securities all exceeded 100%.
It is worth mentioning that, unlike many companies that first listed in A shares and then listed in H shares, the four securities firms, including China Securities, Zhongyuan Securities, Guolian Securities, and CICC, all listed on H shares first. Back to A shares.
From the perspective of Guolian Securities and China International Capital Corporation, which are listed on A shares in 2020, the increase of Guolian Securities in A shares last year was 406.51%. On December 31, 2020, its AH share premium rate was as high as 548.17%.
CICC's A-share growth rate was 161.54% last year. On December 2, 2020, its AH-share premium rate was as high as 340.34%.
Since the beginning of this year, due to the large differences in the performance of securities firms in the two places, the premium rate of their AH shares has also been narrowing.
For example, the share prices of H-shares of CITIC Securities and Haitong Securities rose 18.42% and 3.61% respectively during the year.
In the A-share market, all 40 brokerage stocks have fallen this year. The A-shares of CITIC Securities and Haitong Securities, which have performed well in H-shares, have fallen by 13.47% and 9.56% respectively.
Regarding the long-term spread of AH shares, Li Xing, chief overseas market analyst and head of non-bank finance at Yuekai Securities, said in an interview with a reporter from Securities Daily: "The long-term spread of AH shares is mainly due to the difference between the two places. The valuation level, the perceptions of participating institutions, and the price limit are different. Especially after 2014, the AH share premium has risen significantly, mainly because the 2015 A-share bull market has increased the A-share valuation. , The A-share index rose significantly higher than the H-share index during the same period, and the difference in the two markets’ gains has a certain correlation with the AH share premium."
The largest shareholder acting in concert
"Majority" Increases CITIC Securities H Shares
In recent years, the premium rate of AH brokerage stocks has remained high. Up to now, among the 14 AH brokerage companies, the top brokerage companies have relatively low premium rates. Among them, the premium rates of 5 brokerage companies including CITIC Securities, GF Securities, Huatai Securities, Guotai Junan, and Haitong Securities None of them exceed 100%, and CITIC Securities has the lowest premium rate for AH shares, at 48.56%.
As the leader of the domestic securities industry and the only securities firm with a total asset of more than one trillion yuan, the stock price performance of CITIC Securities has always attracted attention.
The "Securities Daily" reporter discovered that the H shares of CITIC Securities were continuously increased by the largest shareholder acting in concert.
During the period from March 22 to April 29, 2021, CITIC Holdings increased its holdings of 259 million H shares of CITIC Securities through centralized bidding transactions, and the cumulative number of increased holdings has reached 2% of the issued shares of CITIC Securities.
From the perspective of equity relations, CITIC Securities’ largest shareholder is CITIC Limited, which holds 100% equity of CITIC Limited, and CITIC Limited is the concerted action of CITIC Securities’ largest shareholder CITIC Limited.
After the increase in holdings, CITIC Limited (including CITIC Limited) holds a total of 1.999.7 billion A shares and 259 million H shares of CITIC Securities, which together account for 17.47% of the issued shares of CITIC Securities.
In this regard, CITIC Securities stated: “The relevant increase in CITIC’s holdings is based on the comprehensive decision-making of its own business conditions with reference to factors such as the policy environment, market conditions, and stock price performance.”
Regarding the recent continuous "massive" increase in holdings of CITIC Securities’ H shares by the largest shareholder of CITIC Securities, Li Xing told the Securities Daily reporter: “There are three main reasons: First, the price advantage. The rate is only 1.1 times, and the valuation is low. At the same time, the price of CITIC Securities’ H shares is only about 70% of that of A shares, which is relatively price advantage. Second, it is fully accrued. In 2020, CITIC Securities has accrued a large amount of impairment losses. When the market conditions are good, a large provision is expected to be carried lightly, and the follow-up performance will be more secure; the third is the valuation restoration. Since July last year, the brokerage stocks have been silent for a long time, and the adjustment rate is also close to 30%. The leading brokerage companies have increased. Support will increase industry attention and is expected to usher in opportunities for valuation restoration."
From the perspective of investment opportunities in securities stocks that investors are most concerned about, the non-bank financial team of China Securities Co., Ltd. recommends that investors focus on two types of securities companies.
The first is the leading brokerage firm. Under the policy guidance of cultivating aircraft carrier-level brokerage firms, the leading brokerage firms will gather market resources in the fields of wealth management, investment banking, derivatives trading, etc., and have an excellent long-term growth potential, corresponding to the target CICC (H) , CITIC Securities, Huatai Securities; second, high-quality securities firms with core competitiveness in sub-sectors. Such securities firms are expected to embark on a differentiated development path and achieve market share increase against the trend, corresponding to the target Oriental Wealth and Industrial Securities.
Regarding the trend of the future price spread of AH securities firms, Li Xing told the reporter of Securities Daily: "As the domestic capital market is fully opened up, the southbound and northbound funds are more actively participating in the two markets. The smooth flow will eventually narrow the premium of AH shares to a reasonable level, and appropriate attention can be paid to the investment opportunities of securities firms' H shares with high premiums and low valuations." (Securities Daily)