Gf Securities Co.Ltd(000776) (000776)
The market-oriented mechanism is flexible, the management team is stable, and fresh blood is supplemented. The company has no controlling shareholder and actual controller, and is the only non-state-owned securities company among the head securities companies. Over the past 22 years, Jilin Aodong Pharmaceutical Group Co.Ltd(000623) , Liaoning Chengda Co.Ltd(600739) and Zhongshan Public Utilities Group Co.Ltd(000685) have always been among the top three shareholders of the company. The ownership structure is stable and balanced. The good governance structure gives the company’s management sufficient decision-making freedom, ensures that the company pays equal attention to both incentive and restraint, maintains a long-term market-oriented operation mechanism, healthy and sustainable development. The new management team promoted internally in July 2021 is young and highly professional, which is an important engine for the company’s future growth.
The company has outstanding advantages in big wealth business, with a profit contribution of more than 50%. In terms of public fund management, it benefited from the continuous entry of residents’ wealth into the market through institutions, the continuous high growth of non commodity base scale and the concentration of market share to the head. The company’s participation in e fund and holding of GF fund are leading in the industry in terms of scale and performance. At the same time, the company and holding of public offering realize the linkage between talents and business, and develop and grow together. With the rapid growth of management scale, the total profit contribution of GF fund and e fund has increased from 8.75% in 2015 to 26.04% in 1h21. In terms of asset management of securities companies, the company’s asset management scale remained the top ten in the industry from 2016 to 2020. After the new asset management regulations, the company’s active management ability continued to improve. The active scale of 3q21 accounted for more than 90%, second only to China International Capital Corporation Limited(601995) , ranking second in the industry. The asset management revenue stabilized and rebounded with the improvement of active ability. In terms of wealth management, 67% of the company’s business departments are concentrated in economically developed areas, with strong channel advantages. The number of public funds remains the top five in the industry, and the channel advantages determine the asset side advantages; The company attaches importance to product research, with strict product selection process, rich product system, good customer holding experience and professional ability trusted by investors, which has been fully reflected in the significant increase of product sales and ownership.
Investment banks have brand advantages and performance increment elasticity can be expected. Gf Securities Co.Ltd(000776) has been deeply engaged in small and medium-sized enterprises for many years, and the financing service ability of small and medium-sized enterprises has been recognized by the industry. In the wave of listing of small and medium-sized enterprises since 2010, the scale of stock underwriting has increased significantly. It once ranked first in the industry in 2014 and maintained the top ten level in the industry in most subsequent years. Affected by the Kangmei risk event, in July 2020, the company was suspended from equity commitment qualification for half a year and debt commitment qualification for one year. The performance of investment banks declined. The company responded positively, adjusted the management structure, added an investment bank quality control department to strictly control, and the compliance and growth of investment banking business were more stable. In July this year, the qualification of the company’s investment banking business was fully restored, the insurance agents returned one after another, and the performance increment elasticity can be expected.
Profit forecast and investment rating: we use sotp valuation method to value the company, give 18 times PE valuation to brokerage business, wealth management business, investment banking business and asset management business dominated by commission income, and give 1.3 times Pb valuation to heavy asset business (credit, investment and other businesses). According to sotp valuation results, the target market value of the company in 2022 is RMB 216.741 billion. As of January 4, 2022, the total market value of the company is RMB 165.479 billion, which is rated as “buy”.
Risk factors: the capital market fluctuates greatly, resulting in the interference and impact on the company’s brokerage business and proprietary investment business; The review progress of the registration system on the science and innovation board and the gem was lower than expected, resulting in the performance of investment banking + investment business lower than expected; The progress of market-oriented reform of the company is lower than expected; The progress of wealth management transformation is less than expected.
