A number of brokerages have made asset impairment provisions, and these businesses are the most hur

Mondo Finance Updated on 2024-02-06

The 2023 "report card" forecast of brokerages has all ended, and the performance of 34 brokerages has picked up in the super seventy. However, there are also securities companies that are affected by the provision for asset impairment, and their performance is very "injured".

At present, a total of 5 brokerages have simultaneously disclosed the provision for asset impairment, and some brokerages have made provisions of more than 1 billion yuan. On the whole, in 2023, the asset impairment provisions of securities companies will mainly be concentrated in the two financial institutions, ** pledge, and debt investment.

5 securities firms made asset impairment provisions.

According to the latest data, a total of 34 brokerages have disclosed their performance profiles in 2023 through performance reports, forecasts, and unaudited financial reports. Among them, the net profit of 8 brokerages declined year-on-year, namely CITIC**, Haitong**, Dongfang**, SDIC**, Dongguan**, Minmetals**, McGao**, and AVIC**. 1 company continues to lose money, which is Zhongshan **, with a loss of 0$8.4 billion.

The year-on-year growth rate of net profit of 25 brokerages was positive. There are 7 companies whose net profit growth is expected to be more than 100%, namely Zhongtai**, Western**, Southwest**, Caida**, Hongta**, Guosheng**, and Northeast**. In addition, the Pacific Ocean, rivers and seas, and Tianfeng have turned losses into profits.

In addition to disclosing the performance overview, Pacific**, Everbright**, Zhongyuan**, Haitong**, and Tianfeng** also issued announcements on asset impairment provisions. According to the Chinese reporter of the brokerage, the total asset impairment provision of the five brokerages is 310.9 billion yuan (Haitong ** is the caliber of accrual in the second half of the year).

Among them, Haitong** has the largest asset impairment scale. According to the announcement, Haitong's consolidated statements in the second half of the year (July to December) made a total of 19 asset impairment provisions2.2 billion yuan, a decrease of 16$8.1 billion. In the semi-annual report, Haitong ** disclosed that the consolidated statement from January to June made an asset impairment provision of 121.4 billion yuan, a decrease of 100.9 billion yuan.

The scale of asset impairment provisions provided by Everbright** and Tianfeng** (proposed) also reached hundreds of millions of yuan. Among them, Everbright** made an asset impairment provision of 6 in 20236.9 billion yuan, a decrease of about 64 billion yuan. Compared with the disclosed performance express data, 64 billion yuan accounted for about 42 percent of Everbright's net profit1.9 billion of 1517%。

Tianfeng** is expected to make a total of 3 asset impairment provisions in 20239.7 billion yuan, a decrease of 30.5 billion yuan. However, compared with the previous year, it has been nearly halved. Tianfeng** is expected to turn losses into profits in 2023 and achieve a net profit of 27.6 billion to 33.1 billion yuan.

Zhongyuan** and Pacific** have both issued earnings pre-increase announcements. The former is expected to have a net profit attributable to the parent company of 19.4 billion yuan, a year-on-year increase of 8248%, and the latter is expected to have a net profit attributable to the parent of 18 billion to 27 billion yuan, turning losses into profits. When talking about the change in performance, both mentioned that the scale of the provision for impairment of credit assets decreased compared with the previous year.

Specifically, the 2023 consolidated statement of Zhongyuan ** made a total of 6733 asset impairment provisions390,000 yuan, a decrease of 6,733 yuan in total profit in 2023390,000 yuan. In 2023, the Pacific ** will make an asset impairment provision of 5480860,000 yuan, a decrease in net profit of 4110640,000 yuan. In 2022, Pacific ** made an asset impairment provision of about 31.5 billion yuan, 33.6 billion yuan.

The two financial and equity pledge businesses are still risk points.

The provision for asset impairment will directly affect the performance of brokers, which provision items have dragged down the "hindrance" of these five brokerages?

According to the announcement, in the second half of the year, Haitong ** made an asset impairment provision of 19200 million yuan, of which two financing funds are provided for impairment of 96.4 billion yuan, accounting for exactly 50%. Then there is the provision of long-term revenue 48.4 billion yuan, accounting for 25%. The cumulative proportion of the two items exceeded 75%.

Haitong ** said that for the financing business, according to the characteristics of the financing entity and the expected disposal and realization of the guarantee, the expected cash flow of the financing entity is comprehensively evaluated, and the expected credit loss is calculated by using the default probability default loss rate method or a single test, and the impairment provision is made. For the sale-leaseback business, the expected credit loss is assessed according to the credit risk change of the long-term receivable and the corresponding credit loss provision is determined, and the expected credit loss is calculated by using the default probability default loss ratio method or a single test, and the impairment provision is made.

Tianfeng ** has made a provision for 39.7 billion yuan, of which 26.3 billion yuan is the most important part of the provision. For other assets, Tianfeng** said that in accordance with the "Accounting Standards for Business Enterprises" and the company's relevant accounting policies, the company is expected to make impairment provisions for other assets in 2023 according to the expected credit loss model26.3 billion yuan, mainly including other receivables formed after the disposal of the company's ** pledged repurchase business assets, the estimated impairment provision of 2938600,000 yuan and the debt assets held are expected to make an impairment provision of 20.8 billion yuan.

The asset impairment provision accrued by Pacific ** in 2023 is also mainly related to the pledge business. According to the announcement, the Pacific will make an impairment provision for the resale of financial assets in 2023 of 4265020,000 yuan, accounting for 77 of the total amount of asset impairment provisions82%。

Zhongyuan**'s 2023 consolidated statements made a provision for credit impairment of RMB5428980,000 yuan, of which 4,279 were accrued for debt investment950,000 yuan.

The large provision of Everbright ** is mainly related to the goodwill impairment of its wholly-owned subsidiary, Everbright International Holdings*** (hereinafter referred to as CES Holdings). According to the announcement, Everbright ** has raised a total of 6Provision for asset impairment of RMB6.9 billion. Among them, CES Holdings' provision for goodwill impairment losses accounted for 31.5 billion yuan.

According to Everbright**, CES's book goodwill was mainly formed by the acquisitions of China Everbright International*** and Everbright International (Hong Kong)**, which were allocated to the wealth management business. In 2023, CES calculated the recoverable amount of the asset group of the wealth management business based on the discounted future cash flow method, and made an impairment provision for the difference between its net book value and the carrying amount of goodwill of the asset group.

Editor-in-charge: Tactical Heng.

Proofreading: Zhao Yan.

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