\u3000\u3000 China Stock Market News ( East Money Information Co.Ltd(300059) )
Key investment points
February 28 is the last stock conversion day of "Dongcai Zhuan 3": on January 24, the redemption conditions of "Dongcai Zhuan 3" were triggered, and the company decided to redeem in advance. Investors are faced with two options: 1) transfer the equity before the closing of the market on February 28; 2) Accept compulsory redemption, and the redemption price is 100.18 yuan / piece. The price of "Dongcai Zhuan 3" has been in a high premium state for a long time after entering the stock conversion period, but there has been a continuous stock conversion discount since January 25, and investors have significantly increased their stock conversion. As of February 25, the non convertible balance of "Dongcai Zhuan 3" was 1.067 billion yuan, accounting for 6.8% of the total issuance of convertible bonds. According to our calculation, if all the shares of "Dongcai Zhuan 3" are converted, the cumulative new share capital accounts for about 6.5% of the total share capital of the company before the conversion, of which the new share capital accounts for about 0.4% on February 28. We think this has little impact on the stock price. After the pressure of "Dongcai Zhuan 3" is released, the subsequent company's share price may pay more attention to fundamentals.
The flow advantage remains the same and the capital strength is enhanced: + the total monthly living number of Tiantian fund is nearly 20 million, ranking in the forefront of securities apps. The company has built an online community with strong user stickiness and high activity, and has reserved sufficient customer resources for the license business. H121 Dongcai securities has a net capital of 22.7 billion yuan, ranking 20th in the industry. The total issuance amount of "Dongcai Zhuan 3" is 15.8 billion yuan. After the completion of the share conversion, the company's capital strength will rise to a new level, and strongly support the current key layout of heavy capital businesses such as two financing and securities self operation.
The fund holding scale is expanded, and the shares of securities brokerage and financing are increased: the market is worried that the company's fund consignment business will face growth pressure after the fund issuance is cold. On the other hand, when the market was cold in 2018, the company's consignment revenue still increased by about 26% year-on-year. Moreover, the current fund holding scale and survival scale continue to expand. We believe that the market has been slightly overly worried about the company's fund consignment business. The company's active flow and abundant realization licenses are still the guarantee for the sustainability of performance growth. The improvement of the share of securities brokerage and financing is still worth looking forward to in the future.
Investment suggestion: network traffic + realization license + capital strength have gradually built a closed loop of the company's business ecology. We believe that the company's performance is flexible and sustainable, still has high growth potential and maintains the profit forecast unchanged. The current share price of the company corresponds to 2021e PE 32.23x, which is at the lowest level in recent five years. We believe that the high growth of the company's performance may drive the recovery of valuation and maintain the "buy-b" rating.
Risk tips: capital market volatility intensifies, fund issuance is lower than expected, license business competition intensifies, etc
