Top 10 landlords in the brokerage circle: owning cinemas, collecting rent and building houses

The semi-annual reports of listed securities firms have been fully disclosed!

The reports are dense with numerous numbers, containing many stories worth exploring.

Among them, the scale of "investment properties" reveals the "unique strength" of securities firms - their ability to hold land.

For instance, some securities firms "operate" cinemas, some provide office space for their public fund institutions, some turn to mortgage land use rights, and some institutions even act as "landlords" directly...

Investment Properties

ZiShiTang has compiled the latest scale of investment properties of listed companies (consolidated financial statements) through the WIND terminal.

According to the financial reports of listed securities firms, investment properties refer to real estate held to earn rental income or for capital appreciation, or both.

Specifically, it includes: leased land use rights, held land use rights prepared for value appreciation and transfer, leased buildings (including buildings constructed or developed for rental purposes, as well as buildings under construction or development intended for future rental).

Top Ten "Emerging"

As of the end of June 2024, Haitong Securities, Founder Securities, Guotai Junan, Jinlong Stock, and CITIC Securities ranked in the top five in terms of the scale of investment properties.

Among these institutions, except for CITIC Securities, the scale of investment properties of the other four institutions exceeds 1 billion RMB.

Haitong Securities ranks first with 2.503 billion RMB, significantly ahead of other peers in the securities industry.

The securities firms ranked from fifth to tenth in scale are: Zhongtai Securities, TF Securities, Guohai Securities, First Capital, and Guosen Securities.

Founder Securities "Owns" Cinemas

As of the end of June 2024, Founder Securities' scale of investment properties was 1.777 billion RMB, ranking second among listed securities firms.

Founder Securities' latest semi-annual report disclosed: at the end of the reporting period, the firm had three investment properties that had not yet completed the property rights certificate (as shown in the figure below).

These include the Yuda Guomao Building, Jinquan Port Cinema, and a branch located in Tianjin. The property rights certificates for the first two properties are "still being processed," and the latter has "not yet been transferred to the name of Founder Securities."

The cinema assets mentioned above are particularly noteworthy, with a book value of 341 million RMB.

Why is a securities firm associated with cinemas?

This is related to an old case.

Back then, the predecessor of Founder Securities' wholly-owned subsidiary, Founder Securities Sponsorship Company (formerly China National Securities), had misappropriated 2.05 billion RMB from September to December 2014.

Subsequently, it was announced that on December 28, 2023, the court ruled to deliver a certain commercial property in Chaoyang District, Beijing to Founder Sponsorship to offset approximately 332 million RMB of misappropriated and unrecovered funds

Guotai Junan Securities: "Strong Rental Income"

Guotai Junan Securities, a veteran brokerage firm with the third largest scale of investment properties, had a scale of 1.054 billion yuan as of the end of the first half of the year, with minimal changes in this scale over the past three years.

The latest semi-annual report includes records of accounts receivable related to rental properties.

As of June 30, 2024, and December 31, 2023, the top five units with significant amounts in the net amount of other receivables, along with the nature of the amounts, all involve "rent and other deposits," with the highest amount reaching over 80 million yuan.

Haitong Securities: "Abundance of Hard Assets"

In the top ten list of investment property scales, corresponding data from 2020 to 2023 for various brokerage firms are provided.

Leading the list is Haitong Securities, with this scale increasing from less than 100 million yuan in 2021 to 2.642 billion yuan in 2022.

"Fixed assets, right-of-use assets, construction in progress, and investment properties account for 3% of the group's total assets, with most assets having strong liquidity." The 2022 annual report of Haitong made the above statement regarding the company's balance sheet.

Additionally, Haitong has two wholly-owned institutions engaged in real estate development, operation, and property management, namely Haitong Weitai Property Management Co., Ltd. and Shanghai Zechun Investment Development Co., Ltd.

However, from publicly disclosed information, external parties have not been able to find relevant details to explain the changes in the scale figures mentioned above.

Firm Belief in Real Estate Investment

Another interesting situation is that First Venture Securities, which is usually not very vocal, ranks among the top ten in terms of investment property scale.

This brokerage firm, which was restructured from Foshan Securities, is quite dedicated to real estate investment.

(As shown in the image above) The latest semi-annual report states: there is an intangible asset with a book value of 566 million yuan that is restricted, as it is used as collateral for land use rights for borrowing.

In fact, this involves a long-term loan, with the semi-annual report disclosing that "due to the development and construction of the Chuangjin Hesin Qianhai Headquarters Building project, the company's indirectly controlled subsidiary, Shenzhen Chuangji Industrial Investment Co., Ltd., applied for a loan with land as collateral."

First Venture Securities is one of the founding shareholders of Shenzhen public fund Chuangjin Hesin Fund. Could it be that the company's investment properties are "indirectly" used to build properties together with its affiliated public fund institution?!