\u3000\u3000 China Stock Market News ( East Money Information Co.Ltd(300059) )
Event: on March 18, 2022, the company issued the annual report of 2021. During the reporting period, the total operating revenue was 13.094 billion yuan, a year-on-year increase of 58.94%; The net profit attributable to the shareholders of the listed company was 8.553 billion yuan, a year-on-year increase of 79.00%, which was in line with the scope of the early express.
The continuous high growth in 2021 proves that the core of the era of institutionalization has benefited. 1) During the reporting period, the company further gave play to the core competitive advantages and overall synergy of the Internet wealth management ecosystem and a large number of users, strengthened investment in R & D technology, improved the level of intelligent and personalized services, explored new models of wealth management, provided users with stable, efficient and high-quality services, and achieved a total operating revenue of 13.094 billion yuan, a year-on-year increase of 58.94%; The net profit attributable to the parent company was 8.553 billion yuan, a year-on-year increase of 79.00%, which was in line with the preliminary notice. At the same time, the profit growth rate far exceeds the income growth rate, which also reflects the cost advantage and scale effect of the company as the leader of Internet asset management. 2) In terms of securities business, China’s capital market developed healthily in 2021. According to wind data, by the end of 2021, the total transaction amount of stocks in Shanghai and Shenzhen was 257.97 trillion yuan, a year-on-year increase of 24.79%; The balance of margin trading was 1.73 trillion yuan, a year-on-year increase of 6.68%. During the reporting period, the company’s securities business developed rapidly, and the stock trading volume and the scale of margin trading and securities lending business increased significantly year-on-year. China stock market news securities has 186 branches in 31 provinces (autonomous regions and municipalities directly under the central government) across the country, realizing a revenue of 7.687 billion yuan, a year-on-year increase of 54.29%, far exceeding the growth rate of market trading volume, reflecting the dominant position of the company’s Internet core securities companies. 3) Among them, according to the unaudited non consolidated financial statements of China stock market news Securities Co., Ltd. in 2021, China stock market news securities achieved a total operating revenue of 7.3 billion yuan, a year-on-year increase of 58.76%; The net profit was 4.825 billion yuan, a year-on-year increase of 66.89%. Among them, the net income from handling fees and commissions was 4.55 billion yuan, a year-on-year increase of 51.9%; Net interest income was 1.75 billion yuan, a year-on-year increase of 38.6%; Investment income and profit and loss from changes in fair value were 930 million yuan, a year-on-year increase of 223.1%, both of which achieved rapid growth. We expect that the market share of the company’s brokerage business and two financing business will continue to increase, and self operated investment will also start to develop. 4) In terms of fund business, the general trend of institutionalization has been developing for a long time. According to the disclosure of China Securities Investment Fund Industry Association, by the end of 2021, the shares of public funds had totaled 21.75 trillion, a year-on-year increase of about 27.72%. During the reporting period, the company’s fund trading volume of third-party sales service business and the holding scale of consignment funds increased significantly year-on-year, and the financial e-commerce service business realized an income of 5.073 billion yuan, a year-on-year increase of 38.74%. Meanwhile, as of 2021q4, the holding scale of Tiantian fund stock + mixed public offering fund was 537.1 billion yuan, with a quarter on quarter increase of 10.95%; The holding scale of non money market public funds was 673.9 billion yuan, with a quarter on quarter increase of 16.53%, once again becoming the fastest-growing platform among the top 10 consignment agencies. As a third-party head consignment platform, Tiantian fund has many years of traffic accumulation, outstanding brand effect and professional advantages. The tail Commission share of fund sales helps the company’s fund consignment business to remain stable. With the increasing trend of long-term capital entering the market and institutionalization, the company, as the leader of Internet asset management, is expected to benefit for a long time.
The cost growth was stable, reflecting the scale effect, and the R & D investment continued to increase. 1) During the reporting period, the company’s sales expense was 652 million yuan, with a year-on-year increase of 24.70%, mainly due to the company’s further strengthening of brand publicity and promotion; The percentage of total operating revenue was 4.98%, down 1.37 percentage points from the same period last year. The management expense was 1.849 billion yuan, a year-on-year increase of 25.98%, accounting for 14.12% of the total operating revenue, a decrease of 3.7 percentage points over the same period of the previous year. The financial expense was 139 million yuan, with a year-on-year increase of 309.47%, mainly due to the increase of interest expense of convertible bonds; It accounted for 1.06% of the total operating revenue, an increase of 0.65 percentage points over the same period last year. 2) The current R & D expenditure was 724 million yuan, a year-on-year increase of 91.33%, accounting for 5.53% of the total operating revenue, an increase of 0.94 percentage points over the same period last year. Based on the concept of Internet technology, further improve the company’s strategic positioning and reporting, further enhance the user’s ability to make full use of the Internet technology, and further enhance the user’s ecological management, based on the concept of financial technology and reporting, so as to further improve the company’s strategic positioning and reporting, and further enhance the user’s ability to make full use of the Internet technology.
In the era of capital market, the Internet asset management leader of tens of millions of financial flows is still underestimated. 1) Over the years, the company has been deeply involved in the Internet financial information scene, accumulating about 10 million dau traffic on PC and 40 million Mau traffic on mobile. The biggest value of Internet companies is to form user time stickiness through scene value, while the company occupies the time of China’s high-end financial crowd. In particular, at the end of 2019, the capital market policy entered the stage of encouraging development, and the company has huge financial business space. 2) According to wind data, the company’s historical PE valuation range is 40-70x, and the adjusted profit forecast. The current market value (286.2 billion yuan on March 18, 2022) is still undervalued.
Maintain the “buy” rating. According to the key assumptions and recent announcements, the profit forecast is adjusted. It is estimated that the operating revenue of the company from 2022 to 2024 will be 16.384 billion yuan, 19.884 billion yuan and 24.585 billion yuan respectively, and the net profit attributable to the parent company will be 10.647 billion yuan, 13.136 billion yuan and 16.685 billion yuan respectively. Maintain the “buy” rating.
Risk warning: the proportion of financial business has not increased as expected; Internet giants intensify competition; Macroeconomic risks.
