Comments on the 2021 annual report of China stock market news: the performance has achieved rapid growth and diversified financing has helped the development

\u3000\u3000 China Stock Market News ( East Money Information Co.Ltd(300059) )

Event:

The company issued the 2021 annual report after the closing on March 18, 2022.

Comments:

The two main businesses are growing at a high speed, and the Internet advertising service is shrinking

In 2021, the company 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%. By business, the revenue from securities services was 7.687 billion yuan, a year-on-year increase of 54.29%; The revenue from financial e-commerce services was 5.073 billion yuan, a year-on-year increase of 71.23%; The revenue from financial data services was 253 million yuan, a year-on-year increase of 34.75%; Internet advertising services achieved revenue of 82 million yuan, down 22.94% year-on-year. In terms of expenses, the rates of sales, management and R & D expenses of the company were 4.98%, 14.12% and 5.53% respectively.

The securities business has developed rapidly, and the holding scale of public funds has increased significantly

1) securities business: China stock market news securities achieved an operating revenue of 7.300 billion yuan and a net profit of 4.825 billion yuan. China stock market news securities obtained the qualification of pilot exhibition of public fund investment consulting business and achieved a new breakthrough. By the end of 2021, China stock market news securities had 186 branches in 31 provinces (autonomous regions and municipalities directly under the central government). 2) Fund sales business: the company's fund sales scale has increased significantly. By the end of 2021, the company had launched a total of 12777 fund products from 150 public fund managers. The company's Internet financial e-commerce platform has realized a total of 374555304 fund purchase (including fixed investment) transactions, with fund sales of 2238571 billion yuan, including 318056364 non monetary funds, The sales volume was 1340409 billion yuan. By the end of 2021, the non money market public funds of Tiantian fund had a scale of 673.9 billion yuan, and the cumulative fund sales exceeded 6 trillion yuan. The daily average number of active users of Tiantian fund platform is 3.147 million, including 3.9481 million active users on trading days and 1.5512 million active users on non trading days.

Further enrich financing means and improve capital strength and comprehensive competitiveness

In 2021, the company completed the issuance and listing of convertible bonds "Dongcai Zhuan 3", raising a total of 15.8 billion yuan; Overseas subsidiaries completed the issuance and listing of overseas US dollar bonds and raised US $300 million; China stock market news securities has completed the issuance of short-term financing bonds, private placement bonds, public offering bonds and other bonds, further enriched financing means, reduced financing costs, improved the company's capital strength and comprehensive competitiveness, and provided capital assistance for the sustainable and healthy development of the company's business. In addition, the company improved the performance appraisal and incentive mechanism and implemented a new equity incentive plan, which stimulated the enthusiasm and creativity of employees.

Profit forecast and investment suggestions

The company is a relatively scarce Internet service platform in China, providing products and services based on Internet platform applications to a large number of users. With the sustained and healthy development of China's capital market, the company has a broad growth space in the future. It is predicted that the operating revenue of the company from 2022 to 2024 will be 15.778 billion yuan, 19.405 billion yuan and 23.756 billion yuan, the net profit attributable to the parent company will be 10.543 billion yuan, 13.037 billion yuan and 15.967 billion yuan, the EPS will be 0.96, 1.18 and 1.45 yuan / share, and the corresponding PE will be 27.15, 21.95 and 17.92 times. In the past three years, the company's PE has mainly operated in the range of 30-90 times. Considering the recent capital market conditions and the company's PE valuation level, the company's target PE in 2022 has been adjusted to 40 times, and the corresponding target price is 38.40 yuan. Maintain the "buy" rating.

Risk tips

The growth of stock trading volume in China's securities market is lower than expected; Intensified competition in the securities industry; Fierce competition in the fund sales market; Financial supervision and stricter policies and regulations; The development of asset management business is less than expected.

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