\u3000\u3000 China Stock Market News ( East Money Information Co.Ltd(300059) )
Event: China stock market news released its annual report for 2021, achieving an operating revenue of 13.09 billion yuan, a year-on-year increase of + 58.97%, and a net profit attributable to the parent company of 8.55 billion yuan, yoy + 79%. Earnings per share was 0.83 yuan / share, a year-on-year increase of + 72.92%. The weighted average roe was 22.11%, with a year-on-year increase of + 4.22pct.
Comments:
The fund consignment and brokerage business boosted the performance. In 2021, the operating revenue reached 13.09 billion yuan, a year-on-year increase of + 58.97%, and the net profit attributable to the parent company was 8.55 billion yuan, yoy + 79%, slightly higher than expected, mainly due to the significant growth of fund consignment transaction volume and holding scale, and the significant increase of e-commerce business income. At the same time, the stock trading volume and two financing scale of brokerage business increased significantly year-on-year, and the income related to securities business increased significantly year-on-year. In addition, under the scale effect, the company's sales expenses and management expenses decreased significantly. In 2021, the sales expense ratio was - 1.37pct to 4.98% year-on-year, and the management expense ratio was - 3.7pct to 14.12% year-on-year.
The market share of securities brokerage business and two financial services further increased. In 2021, the securities business achieved a revenue of 7.687 billion yuan, a year-on-year increase of 54.3%. Brokerage business: thanks to the active trading in the market, relying on its strong flow advantage and transformation ability, the net income from brokerage fees and commissions of Dongcai in 2021 was 4.597 billion yuan, a year-on-year increase of + 51.6%, far exceeding the year-on-year growth of yoy + 24.8% of the average daily stock based trading volume in the market (1058374 billion yuan). We calculate that the market share of brokerage business is 4.03%, an increase of 8bp month on month and 71bp year-on-year. Margin trading and securities lending: in 2021, the net interest income of Dongcai securities was 2.32 billion yuan, a year-on-year increase of + 51.1%, higher than the year-on-year increase of yoy + 13.2% of the market balance of dual financing (1832.2 billion yuan). It is estimated that the market share of dual financing business is 2.29%, with a month on month increase of 7bp and a year-on-year increase of 44bp, mainly benefiting from the increase in the market share of brokerage business and the continuous supplement of working capital by the company issuing corporate bonds and convertible bonds. The redemption of the top 3 Dongcai transfer is implemented, and the convertible bonds are expected to be converted into shares to further supplement the capital and reduce the debt cost. The share of the two financial markets is expected to be further increased.
The growth of non commodity basic guarantee volume promoted the high growth of consignment business in the whole year. Dongcai consignment fund performed well. In 2021, the fund consignment income was 5.07 billion yuan, a year-on-year increase of + 71.23%, mainly benefiting from the increase of ownership. In 2021, there were 203156 billion new equity funds in the whole market, a year-on-year increase of + 1.5%, accounting for 69.4% of the new equity funds. In addition, according to the ownership data of industry associations, the ownership of funds continued to increase every day in the fourth quarter. As of the fourth quarter of 2021, the stock + hybrid and non commodity basic guarantee volume of Tiantian fund increased by + 10.9%, + 16.5% to 537.1 billion yuan and 673.9 billion yuan month on month respectively, and the market share increased by 0.3pct, 0.2pct to 6.3% and 4.2% month on month respectively, and surpassed ICBC for the first time, ranking third after ants. Given that Tiantian fund continues to lead the industry in terms of its coverage of fund products and fund companies, its scale far exceeds that of its competitors, and has the absolute advantage of user traffic and stickiness, the market share of consignment business is expected to be further consolidated. Although the issuance of new equity funds has been cold since the beginning of 2022, as of March 18, 2022, there were only 102.23 billion new equity funds in the whole market (vs 901.64 billion new equity funds from January to March 2021). The market's concerns about the growth of fund scale have evolved into concerns about the fundamentals of the company. We believe that considering that the back-end income of Dongcai accounts for more than 60%, the current heat of the new energy fund will not change the general trend of increasing residents' demand for wealth management and capital entering the market in the future, and the increase of the amount of non commodity basic guarantee will drive the steady growth of fund sales revenue.
Profit forecast and investment rating: the company is the leader of Internet securities companies, with outstanding advantages in traffic and scale effect. With the advantages of online traffic, low commission rate and low financing cost, the securities business is expected to further increase its market share, α Prominent advantages. The leading position of fund sales on a commission basis has been consolidated, and the increase in the guaranteed volume of non commodity funds has led to an increase in the proportion of back-end income. The company is not afraid of the cold impact of new development funds. The redemption of Dongcai to the top 3 was implemented, and the factors that suppressed the company's share price were lifted. Without considering the impact of share conversion, we expect the net profit of 20222024e to be RMB 99.4/123.2/14.13 billion respectively, corresponding to 20222024epe to be 27.1x/21.9x/19.1x, maintaining the "buy" rating.
Risk factors: risks affected by fluctuations in the prosperity of the securities market; The risk of further intensification of fund consignment competition; The risk that the development of wealth management is less than expected.
