\u3000\u3000 China Stock Market News ( East Money Information Co.Ltd(300059) )
Event: the company released its 2021 annual report, realizing an operating revenue of 13.1 billion yuan, a year-on-year increase of + 59%, a net profit attributable to the parent company of 8.6 billion yuan, a year-on-year increase of + 79%, a basic earnings per share of 0.83 yuan, a year-on-year increase of + 73%, and a weighted average return on net assets of 22.11%, a year-on-year increase of 4.22pct.
We believe that the highlights of the company mainly lie in: 1) the performance has reached new highs and demonstrated high growth: the company has set a new record for two consecutive years. In 2021, the net profit attributable to the parent company reached 8.6 billion yuan, a year-on-year increase of + 79% and a compound growth rate of + 107% in three years, which is due to the rapid expansion of China’s wealth management industry and the company’s strong market competitiveness. 2) The profitability is improved and the scale effect appears: in 2021, the company’s roe level reached 22.11%, up 4.22pct year-on-year, the operating profit margin reached 65.32%, up 7.32% year-on-year. The company’s Internet platform model is gradually showing the scale effect. 3) Two wheel drive of securities and fund sales: in 2021, the company’s two core businesses, securities and fund sales, achieved revenue of 7.69 billion and 5.07 billion respectively, with a year-on-year increase of + 54.2% and + 71.2% respectively, accounting for 58.7% and 38.7% of operating revenue.
The fund sales volume and market share have increased rapidly, and there is still great growth potential in the future: 1) from the perspective of sales scale, the company’s fund sales scale reached 2.24 trillion in 2021, a year-on-year increase of + 72.5%, of which the non goods based consignment scale reached 1.24 trillion, a year-on-year increase of + 91.7%. 2) From the perspective of ownership, according to the data of the fund industry association, by the end of 2021, the ownership scale of Tiantian fund stock + hybrid / non commodity fund was 537.1/673.9 billion yuan, with a quarter on quarter ratio of + 10.9% / + 16.5% and a market share of 6.22% / 4.13%. The market ranking was promoted to the third in the industry, and the growth rate of ownership was the fastest among the head institutions. In the follow-up, we continue to be optimistic about the growth of ownership brought by the transformation of C-end traffic users and institutional business expansion. Considering that the sales revenue is dominated by the trailing Commission revenue with ownership as the core, we believe that the company’s fund sales revenue has strong toughness and still has great growth potential.
The market share of brokerage and two financial markets has increased steadily, the fund-raising force is heavy, and the capital business has achieved remarkable results. 1) In the brokerage business sector, the daily average stock based turnover of the whole market in 2021 was + 25% to 1.1 trillion yuan year-on-year, and the net income of the company’s securities brokerage business in the same period was + 52% to 4.6 billion yuan year-on-year. We expect the growth rate beyond the industry to come from the increase of market share by 0.7pct to 3.8% while the commission rate of the company remains relatively stable. 2) In the two financing business segment, at the end of 2021, the company’s two financing business financed 41.7 billion yuan, a year-on-year increase of + 41.7%, the market share increased by 0.46pct to 2.27%, and promoted the company’s interest income of financed funds to + 71% to 2.47 billion yuan year-on-year. 3) In the proprietary investment sector, the company realized a proprietary investment income of 1.01 billion yuan in 2021, a year-on-year increase of + 228%. In recent years, the company has actively raised funds to enhance its capital strength, promoted the scale of capital heavy business of Dongcai securities, further reduced the capital cost, and achieved considerable performance contribution.
As the core investment of A-rated company, we are optimistic about the growth of wealth management. We adjusted the company’s profit forecast. It is estimated that from 2022 to 2024, the company will realize a net profit attributable to the parent company of 9.9 billion yuan, 11.8 billion yuan and 13.7 billion yuan, with growth rates of + 15.9%, + 18.6% and + 16.2% respectively. The target price is given to 31 yuan, corresponding to 35×2022 PE.
Risk tips: macroeconomic downturn, sharp fluctuations in the capital market and intensified industry competition
