\u3000\u3000 Citic Securities Company Limited(600030) (600030)
Event: Citic Securities Company Limited(600030) disclosed the 2021 annual performance express of Huaxia Fund. As of December 31, 2021, the total assets of Huaxia Fund were RMB 16.295 billion and the total liabilities were RMB 5.007 billion; In 2021, the company achieved an operating revenue of 8.015 billion yuan, a net profit of 2.312 billion yuan and a total comprehensive income of 2.287 billion yuan. As of December 31, 2021, the assets under management of the parent company of Huaxia Fund was RMB 1661.607 billion.
Benefiting from the continuous improvement of the popularity of China’s public fund industry during the year, Huaxia Fund achieved rapid growth in operating revenue and net profit with its excellent asset management ability and platform advantages. According to the performance express, Huaxia Fund realized an operating revenue of 8.015 billion yuan in 2021, with a year-on-year increase of 44.70%; The net profit was 2.312 billion yuan, a year-on-year increase of 44.68%; During the year, the asset management scale of the parent company of Huaxia Fund was 1661.607 billion yuan. According to the annual report of Citic Securities Company Limited(600030) 2020, the data was 1461.142 billion yuan in the same period last year, a year-on-year increase of 13.72%. As of the mid-2021 report, Citic Securities Company Limited(600030) holds 62.20% of the equity of Huaxia Fund.
The fund management platform is an important support for the wealth management transformation of securities companies, and the synergy between Citic Securities Company Limited(600030) and Huaxia Fund is expected to continue to appear. The securities industry has fully started the transformation of wealth management since 2019. Although there are great differences in the transformation steps of various companies, they are in the primary stage in the general trend of wealth management. Under the current pattern, head securities companies have more prominent advantages in wealth management business model, personnel training, institutional norms and risk management. The probability of “long-distance champion” in the long-term trend will be determined in the head platform. As a public fund platform controlled by Citic Securities Company Limited(600030) , Huaxia Fund’s rapid development not only contributes consolidated income to Citic Securities Company Limited(600030) , but also plays an important role in the construction of wealth management platform and business coordination, delivering advanced experience and high-quality products for its own capital investment and asset management business. In January 2022, Citic Securities Company Limited(600030) relying on its own financial technology strength and resource integration ability, launched fortune number and supporting content open platform, built a content ecosystem based on public funds, and provided professional market interpretation, industry analysis, fund investment and education and other life-cycle services from the perspective of investors. Huaxia Fund is one of the first fund companies to settle in the content platform, The effect of coordinated development under the combination of strong and strong is expected to form a “positive feedback” effect of continuous mutual promotion. This “mutual achievement” model between holding fund companies and securities parent companies may become the best paradigm of securities companies’ wealth management system.
At present, it is suggested to continue to pay attention to the thematic opportunities of wealth management in the securities sector, and pay attention to the “growth” opportunities of the resonance between big wealth management and “Pan investment bank” in the medium and long term. On the whole, the current business homogenization of the securities industry is still strong. Under the background of the continuous enhancement of Matthew effect, only the leading moat is expected to continue to exist and broaden, and the resource agglomeration effect is the most significant, so it has the opportunity to obtain a higher valuation premium. Therefore, we continue to be the first industry leader Citic Securities Company Limited(600030) with both beta and high performance growth certainty. According to the 2021 performance express, Citic Securities Company Limited(600030) weighted average roe reached 12%. Under the condition of relatively low leverage ratio of more than 50%, roe has been close to overseas head investment banks. The certainty of profitability and performance growth is worthy of affirmation, and the leading position of Chinese securities companies is stable. At the same time, Huaxia Fund helps the company to continuously improve its wealth management system, and the business synergy is expected to accelerate. In addition, in recent years, the company’s business structure has been continuously optimized, aligned with overseas head platforms and has strong foresight. We are firmly optimistic about its development prospects. It is expected that its valuation will return to the range of 2.3-2.5x in the medium term and maintain the “recommended” rating.
Risk tips: macroeconomic downside risk, policy risk, market risk and liquidity risk.
