\u3000\u3000 China Stock Market News (300059)
Event: on January 29, 2022, China stock market news released the performance forecast for 2021. It is expected that the net profit attributable to shareholders of Listed Companies in the whole year of 21 will increase by 71.6% – 86.3% year-on-year to RMB 8.2-8.9 billion, and the performance will continue to increase, which is in line with market expectations.
The net profit continues to increase, and the three core businesses are expected to reach a new high
1. According to the performance express, the annual net profit of Dongcai 21 is 8.2-8.9 billion yuan, corresponding to a year-on-year increase of 71.6% – 86.3%. The company has achieved four consecutive increases in net profit since 18-21, and the scale of net profit has increased from 960 million yuan to more than 8 billion yuan at present, with a compound growth rate of 89.4% – 93.3%, indicating the good prosperity of the company’s capital market and its strong market competitiveness;
2. Assuming that the net profit margin of the company in the whole year of 21 is 65% (the net profit margin in the first three quarters of 21 is 64.7%), we can deduce that the annual operating revenue of Dongcai in the whole year of 21 is 12.62 billion to 13.69 billion yuan. Combined with the financial statements of Dongcai securities subsidiary disclosed by the company on January 20, we can roughly predict that the fund consignment business revenue of Dongcai in the whole year of 21 is 4.76-5.77 billion yuan, with a year-on-year increase of 60.6% – 94.8%, Another record high;
3. The number of funds sold on commission increased quarter by quarter, ranking among the top three in the industry. At the end of 21 years, Tiantian Fund ranked the third in the industry with the scale of 673.9 billion yuan of non commodity basic guarantee and 537.1 billion yuan of equity and mixed fund, and surpassed the scale of ICBC and China Construction Bank in 21 years. The standardized net increase of 162.1 billion yuan of stock base and mixed basic guarantee in the whole year of 21 years also surpassed China Merchants Bank and ant, ranking the first in the industry. We are optimistic about the continuous growth and comparative advantages of Tiantian Fund:
A. compared with traditional financial institutions that prefer to reissue funds, there are more redemptions for new ones and the uneven sales ability of financial managers. The abundant investment and teaching activities of funds every day, complete fund evaluation system, convenient and fast fund net worth estimation and super conversion functions and first mover advantages make the retention of their customers more stable, And the complete range of products (stocks, bonds, gold, bulk, QDII, etc.) makes customers have more choices, and the damage in the downward period of the market is relatively small, so as to improve the retention rate;
B. compared with the pure online Internet platform, the institutional communication business combined with Tiantian fund Wuxi Online Offline Communication Information Technology Co.Ltd(300959) can carry out packaged cooperation with institutional customers, such as securities source cooperation, advertising space delivery and commission warehouse division, with the help of the group’s securities dealer license, so as to obtain a large market share in the conversion period of non-standard to standard of financial institutions;
4. The market share of brokerage business and two financial services has increased steadily: according to the financial statements of Dongcai securities, the brokerage service fee of the company has increased by 51.9% to 4.55 billion yuan year-on-year in 21 years, which is significantly higher than the growth rate of 25% of the stock based trading volume in the whole market. If calculated at the rate of 20000, we estimate that the market share of dongcaiji business in 21 years is about 4.2%, Compared with 20 years and the first half of the 21st century, the growth rate increased by 0.81 PCT and 0.14 PCT respectively. The slight slowdown in the growth rate in the second half of the year may be related to the significant increase in the proportion of quantitative funds in the market trading volume. The customers of Dongcai brokerage business are more inclined to individual investors; At the end of the 21st year, the balance of financing and financing of Dongcai securities was 42.03 billion yuan, and the market share increased by 0.45 PCT to 2.28% year-on-year;
The company will forcibly redeem the “Dongcai Zhuan 3” with a scale of 15.8 billion yuan on March 1
1. On January 25, 2022, the company announced that the board of directors considered and approved the proposal on redemption of all issued convertible corporate bonds. Since the closing price of the company for 15 consecutive trading days from January 4, 2022 to January 24, 2022 was not less than 130% (30.36 yuan / share) of the current conversion price, the agreed conditional redemption terms were triggered, The company decided to forcibly redeem the convertible bonds that have not been converted into shares at the price of 100.18 yuan after the closing of the market on February 28;
2. The convertible bonds triggered for conditional redemption this time are the third convertible bonds issued by Dongcai on April 7, 2021, with a total of 158 million shares issued with a face value of 100 yuan each. As of January 24, 22, the actual controller, controlling shareholder, chairman of Dongcai, Mr. de facto and his concerted actors have sold all the 38.41 million “Dongcai Zhuan 3” allocated during the issuance period;
3. As the date of forced redemption (March 1) approaches, we expect that most of the holders of “Dongcai Zhuan 3” have applied or are going to apply for share conversion in the near future, and the selling pressure caused by share conversion will be gradually released;
4. The changes in financial indicators brought about by the “Dongcai Zhuan 3” share conversion are as follows:
A. the owner’s equity increased by 15.8 billion, including 677 million share capital and 15.123 billion capital reserve. The increase of net assets will further increase the adequacy of a series of indicators including liquidity coverage, capital leverage and so on;
B. before convertible bonds are converted into shares, the company calculates the interest expense of corresponding liabilities according to the market interest rate. After the conversion, the interest expense will decrease and the net profit margin will further increase;
C. After convertible bonds are converted into shares, the increase rate of share capital is 6.5%, which is expected to have a limited impact on the dilution of indicators such as net profit per share;
To sum up, the performance of Dongcai performance express is in line with the high growth expected by the market, and the scale data of the company’s non commodity basic guarantee in the fourth quarter is ideal, and the annual ranking is promoted to the top three in the whole industry. With the approaching of the “Dongcai Zhuan 3” strong redemption date, the pressure on the supply of the company’s share capital will be gradually released. Based on the strong data of the net increase of 95.6 billion in the amount of non commodity basic guarantee of 21q4 fund every day, As well as the rise of the transaction volume center of A-Shares since the third quarter of 21 years, we estimate that the net profit of Dongcai in 21-22 years will increase by 77.2% and 36.2% to 8.47 billion yuan and 11.53 billion yuan respectively (originally predicted to be 8.44 billion yuan and 10.98 billion yuan). The current stock price corresponds to 30 times of PE in 22 years, maintaining the buy rating.
Risk warning: the market trading volume and the balance of two financial institutions have decreased significantly, and the fund ownership and sales scale have decreased significantly; The company’s senior executives greatly reduced their shares;
