\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 030 Citic Securities Company Limited(600030) )
Key investment points
Matters: Citic Securities Company Limited(600030) released the annual report of 2021, realizing a revenue of 76.524 billion yuan, a year-on-year increase of 40.71%; The net profit attributable to the parent company was 23.1 billion yuan, a year-on-year increase of 55.01%; The total assets were 1278665 billion yuan, with a year-on-year increase of 21.44%. The net assets attributable to the parent company were 209171 billion yuan, with a year-on-year increase of 15.11% and bvps14.5% 11 yuan. The company plans to distribute cash dividends totaling 8.003 billion yuan to shareholders of A-Shares and H shares, with 5.40 yuan (including tax) for every 10 shares.
Ping An View:
The company’s performance increased and its profitability improved significantly. In 2021, the company’s self operated, brokerage, investment banking, asset management, interest and other income accounted for 30%, 18%, 11%, 15%, 7% and 19% respectively. Among them, the proportion of self operated business decreased further, but it was still the largest source of income. The proportion of asset management, interest and other income increased by 0.56, 2.21 and 5.00pct respectively. The high increase of commodity trade income was the main driving factor of other business income. The company made provision for credit impairment of 899 million yuan and impairment of other assets of 2.605 billion yuan, with a year-on-year decrease of 3.572 billion yuan. The net profit margin increased to 30.19%. The leverage ratio was further increased to 4.80 times, the diluted roe increased by 2.84pct to 11.04%, and the profitability was significantly improved.
The income from heavy asset business increased by about 40%, and the allotment and fund-raising focused on the development of capital intermediary business. 1) Self operation: in 2021, the company realized self operation business income of 22.683 billion yuan (YoY + 26.67%). 2) Credit: in 2021, the company realized net interest income of 5.337 billion yuan (YoY + 106.32%), of which the scale of two financing business increased to 126512 billion yuan and two financing interest income of 10.231 billion yuan (YoY + 50.62%). In January and February 2022, the company announced the allotment of shares to A-share and H-share shareholders. The total amount of funds actually raised was 22.4 billion yuan and HK $6.04 billion respectively. The funds raised were mainly used to develop capital intermediary business. At present, the leverage ratio of the company has reached a high level. Fund raising helps to alleviate the pressure of capital, release the space for business development and further consolidate the advantages of heavy asset business.
Asset light business maintained a dominant position, and the income of asset management business increased significantly. 1) Brokerage: market expansion drives revenue growth, and the proportion of commission sales revenue has risen to nearly 20%. In 2021, the trading volume of the market continued to expand, the bilateral stock based trading volume of the whole market reached a new high of 552.59 trillion (YoY + 25.33%), the market share of the company’s stock based trading volume increased to 6.95%, and the annual net income of brokerage business was 13.963 billion yuan (YoY + 24.04%). The transformation of wealth management was deepened. The asset scale of entrusted customers was 11 trillion yuan (YoY + 29%), the number of public and private funds exceeded 380 billion yuan (YoY + 26%), and the annual income from selling financial products on a commission basis was 2.655 billion yuan (YoY + 35.12%), accounting for 19.01% (YoY + 1.56pct) of the net income of brokerage business.
2) investment banking: the leading position is stable, and the strong is always strong. In 2021, the IPO market reached another record high, with the IPO issuance scale of the whole market of 542675 billion yuan (YoY + 15.08%). The company still maintained its leading position in the industry, completed 68 IPOs, with an underwriting amount of 85.922 billion yuan (YoY + 97.1%), and 126 refinancing lead underwriting, with an underwriting amount of 245995 billion yuan (yoy-8.9%), and completed 194 A-share lead underwriting projects, with a lead underwriting amount of 331917 billion yuan (YoY + 5.84%), with a market share of 18.26%, ranking first in the market; The bond underwriting amount is 1564054 billion yuan (YoY + 20.02%), accounting for 13.74% of the total underwriting amount of securities companies, ranking first in the securities industry. Throughout the year, the company achieved investment banking revenue of 8.156 billion yuan (YoY + 18.52%), and the advantageous position of investment banking business was further highlighted.
3) asset management: the income has increased significantly and the scale continues to expand. By the end of 2021, the total asset management scale of the company was 1.63 trillion yuan (YoY + 18.98%), and the market share increased to 14.94%; The scale of collective and single asset management plans is 660485 billion yuan and 965.25 billion yuan respectively, and the special asset management plan has been cleared. The asset scale of the subsidiary Huaxia Fund is 1.66 trillion yuan (YoY + 13.72%), and the net profit is 2.312 billion yuan (YoY + 44.68%). Under the consolidation criteria, the company realized an asset management business income of 11.702 billion yuan (YoY + 46.16%).
Investment suggestion: under the background of strengthening the Matthew effect in the industry, the leading advantages of many businesses of the company continue to expand, the comprehensive service ability and professional ability improve the barriers to competition, and give priority to benefiting from the reform of the capital market. Since the beginning of this year, the market has fluctuated greatly. As the industry leader, the revenue structure of the company is more balanced. Although affected by market fluctuations, we expect the performance stability to be better than the industry average. Therefore, we raised the forecast of the company’s net profit attributable to the parent company in 22 / 23 / 24 to 24.2/269/30 billion yuan (the original forecast was 22.9/25.1 billion yuan attributable to the parent company in 22 / 23, and the new forecast for 2024), with a year-on-year increase of 5% / 11% / 11%, maintaining the “recommended” rating.
Risk tips: 1) the progress of capital market reform is less than expected; 2) Monetary policy tightened more than expected; 3) The epidemic has repeatedly affected market risk appetite.
