\u3000\u3000 Orient Securities Company Limited(600958) (600958)
Event: the company issued a performance express. In 2021, the revenue was 24.37 billion yuan, a year-on-year increase of + 5.36%, and the net profit attributable to the parent company was 5.37 billion yuan, a year-on-year increase of + 97.3%, which exceeded the expectation. Weighted average roe9 02%, year-on-year + 4.17pct. Q421’s net profit attributable to the parent company was 1.05 billion yuan, with a month on month ratio of – 35.2%.
Performance attribution: [active capital market and growth of major businesses] 1-3q21 brokerage / investment bank / asset management revenue + 69.3% / + 53.8% / + 28.6% year-on-year respectively. At the end of H121, the asset management scale was 352.59 billion yuan, a year-on-year increase of + 52.6%, ranking the fifth in the industry. If the year-on-year growth rate of 50% is maintained in 2021, the asset management scale of the company will be nearly 450 billion yuan by the end of 2021, which is expected to compete for the top four in the industry. [increase in investment income of huitianfu] as of February 11, huitianfu’s non monetary fund management scale was 614.47 billion yuan and the stock + hybrid fund management scale was 329.48 billion yuan, both ranking fifth in the industry. H121 huitianfu’s net profit was 1.57 billion yuan, a year-on-year increase of + 140.8%, ranking second in the industry. If the annual net profit growth of huitianfu in 2021 is consistent with that of H121, the annual net profit can reach 3.61 billion yuan, the company holds 35.412% and obtains an investment income of nearly 1.3 billion yuan. [decrease in provision for credit impairment] 1-3q21 made provision for credit impairment of 260 million yuan, a year-on-year decrease of – 75.6%, mainly due to the year-on-year decrease in the provision for impairment loss of stock pledge business.
Large asset management contribution has good performance flexibility: the estimated profit of H121 company’s asset management business (asset management division + its funds) accounts for more than 70%, far exceeding that of comparable securities companies. In the process of financialization of residents’ wealth and institutionalization of investors, asset management business will directly benefit. Dongzheng asset management and huitianfu fund are head asset management institutions with excellent investment ability. Their good performance may continue to increase the company’s profits.
Investment suggestion: according to the company’s performance express, we raised the company’s investment banking, asset management and other business income and reduced the company’s credit impairment provision. Based on this, we raised the profit forecast for 2022-2023 to 5.834 billion yuan and 6.262 billion yuan, with an increase of 19.5% and 15.5%. The current share price of the company corresponds to 2021epe16.00 91x, at a low level in the past five years, maintaining a “Buy-A” rating.
Risk tips: increased volatility in the capital market, less than expected business development, intensified industry competition, etc.
