(Original title: 10 securities firms announced the details of the fraud, involving at least 14 stocks, with a provision of 1.6 billion and reduced net profit of 1.2 billion. Stock pledge is still a high-risk area)

It is now the intensive disclosure period for semi-annual reports. Along with the first-half results, various securities firms have also made provisions for asset impairment. More than 80% of the provisions are concentrated on stock pledge business.

So far, 10 securities firms have announced the scale of asset impairment provisions for the first half of this year, with a total amount of 1.632 billion yuan, reducing the net profit of the securities firms by 1.240 billion yuan in total.

Data show that the stock pledged repurchase business is still the hardest hit area for asset impairment provisions by securities companies. Brokerage China reporters estimated based on the announcement that 10 brokerages were hit by the stock pledge repurchase business, with a total withdrawal of approximately 1.368 billion yuan, accounting for as high as 83.82%.

10 securities firms raised a total of 1.632 billion

On August 24, First Capital Securities and Southwest Securities issued announcements on the provision of asset impairment provisions. Prior to this, eight other listed securities firms had announced their asset impairment provisions for the first half of this year (Jianghai Securities released it through its parent company Harbin Investment Co., Ltd.). According to statistics, 10 listed securities firms have currently withdrawn a total of 1.632 billion yuan, affecting a total of 1.240 billion yuan in net profit for the current period.

Specifically, Orient Securities made the largest provision of 445 million yuan this time; followed by Western Securities, Guoyuan Securities and First Venture Securities, which made provisions of 282 million yuan, 256 million yuan and 208 million yuan respectively; Guohai Securities and Northeast Securities also made provisions of more than 100 million yuan, 126 million yuan and 118 million yuan respectively.

Judging from the impact on the performance of the half-year report, Orient Securities's provision for asset impairment this time reduced the net profit of the current period by 333 million yuan, followed by Western Securities's 212 million yuan and Guoyuan Securities' 192 million yuan. First Capital Securities' current net profit also decreased by approximately 156 million yuan due to asset impairment provision.

It is worth mentioning that Orient Securities, Guoyuan Securities, and Shanxi Securities all mentioned in the announcement that the amount of this provision "exceeded the company's audited net profit in the most recent fiscal year by more than 10%."

Provision for stock pledge business is 1.368 billion

As expected by the market, the stock pledged repurchase business is still a frequent area for securities firms to make asset impairment provisions.

According to the announcements of listed securities companies, among the 10 securities companies with data statistics, the collective asset impairment amount due to the stock pledge repurchase business is as high as 1.368 billion yuan, compared with the total scale of 1.632 billion yuan, accounting for 83.82%. In other words, more than 80% of the asset impairment provisions currently made by securities companies in the first half of the year are concentrated in stock pledge business..

Note: Western Securities did not disclose the amount of impairment provision for stock pledged repurchase business in the current period. This value was estimated by the reporter based on the bad debt provision for individual stock pledges and the amount of impairment reversal.

Among the aforementioned 10 securities firms, except for Shanxi Securities, which reversed the provision for impairment of stock pledged repurchase business of 5.4233 million yuan due to the reduction in the scale of its stock pledged repurchase business and agreed repurchase business, Pacific Securities only accrued assets for other debt investments. In addition to impairment, the remaining eight securities firms all made new provision for impairment of stock pledge repurchase business in the first half of the year. Among them, the collective amount of six securities firms, namely Orient Securities, Western Securities, Guoyuan Securities, First Capital Securities, Northeast Securities, and Guohai Securities, exceeded the 100 million yuan mark.

Many securities firms stepped on the project Lianliankan

In the first half of 2019, Orient Securities made an impairment provision of 389 million yuan for its stock pledged repurchase business, which involved three major projects, and the underlying stocks involved have all been "starred and wearing hats": *ST Southeast Project made a provision of 177 million yuan, *ST Gangtai Project made a provision of 180 million yuan, and *ST Large Control Project made a provision of 69.8158 million yuan.

The impairment provision made by Western Securities for the stock pledge repurchase business also involves three major projects: including a provision of 250 million yuan for the LeTV project, a provision of 62.592 million yuan for the Xinwei Group project, and a provision of 4.704 million yuan for the Zhongnan Cultural project.

Guoyuan Securities stated that it has made an impairment provision of 224 million yuan for the stock pledged repurchase business in this period, mainly because the stock prices of the underlying securities to be repurchased, "ST Huaye" and "ST Zhongfu", have continued to fall and are below the 100% maintenance guarantee ratio (including some over-the-counter frozen assets).

First Capital Securities disclosed four projects involving stock pledge repurchase business, namely the Oupu Intelligent Network project with a provision of 118 million yuan, the Tianguang Zhongmao project with a provision of 13.6677 million yuan, the Tianguang Zhongmao project with a provision of 7.8756 million yuan, and the Pegasus International project with a collective provision of 32.3164 million yuan.

Northeast Securities revealed that the company has made a total of 118 million yuan in asset impairment provisions for the stock pledged repurchase transaction business, mainly involving pledged stocks such as Liyuan Refining and Hengkang Medical.

It should be noted that in addition to stock pledged repurchase business, bond repurchase, debt investment, financing business (including margin financing), etc. also have securities companies making provision for asset impairment, but overall, the number and amount of projects involved are relatively small.

Risks in stock pledge business still exist

The "Stock Pledged Repurchase Risk Analysis Report for the Second Quarter of 2019" recently released by the Shenzhen Stock Exchange pointed out that in the second quarter, the scale of the stock pledged repurchase business of the Shenzhen and Shanghai Stock Exchanges continued to decline, the bailout coverage was further expanded, and the liquidation risk was controllable, but the credit risk of the controlling shareholders of some listed companies needs to be further mitigated.

Specifically, in the second quarter, stocksThe ticket pledge repurchase is mainly reflected in the following three aspects: business scale continues to decline, and the proportion of liquidation amounts is low; the risks of controlling shareholders of some listed companies are concentrated and need to be stepped up to resolve; the coverage of bailouts has been further expanded, but the depth needs to be expanded.

"Securities companies should give full play to their comprehensive advantages and combine shareholder relief with improving the quality of listed companies." The Shenzhen Stock Exchange pointed out that securities companies are important intermediaries in the capital market and can play a greater role in serving the real economy, preventing and defusing risks, and improving the quality of listed companies.

The Shenzhen Stock Exchange also suggested that when the controlling shareholder of a listed company defaults on its pledge and the listed company also falls into operating difficulties, securities companies can provide the listed company with a package of services such as mergers, acquisitions, restructuring, and asset injection while rescuing the controlling shareholder, and resolve the risks of the controlling shareholder and the listed company through resource integration and industrial upgrading.