\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 211 Guotai Junan Securities Co.Ltd(601211) )
Event: Guotai Junan Securities Co.Ltd(601211) released the annual report of 2021, and achieved an annual operating revenue of RMB 42.817 billion, with a year-on-year increase of 21.6%; The net profit attributable to the parent company was 15.013 billion yuan, a year-on-year increase of 35%. Roe was 11.05%, an increase of 2.5 percentage points over the previous year.
The income from brokerage business increased steadily, and the transformation of wealth management progressed smoothly. In the 21st year, the company’s net income from brokerage business was 9.51 billion yuan, a year-on-year increase of 12.7%. The market share and commission rate of traditional brokerage business tend to be stable, and the progress of wealth management transformation is accelerated. From 2017 to 2021, the average monthly scale of financial products sold by the company maintained a compound growth rate of 26%, maintaining a rapid growth rate. In the past 21 years, the company has vigorously carried out investment consulting business, serving more than 150000 customers and managing assets of more than 8.3 billion yuan. At the end of the year, Junhong app had 37.9 million users, with an average monthly life increase of 19% year-on-year. At the end of the year, the balance of margin trading and securities lending was 104.04 billion yuan, a year-on-year increase of 17.6%.
The net investment income increased significantly and the derivatives business grew rapidly. In the 21st year, the net investment income according to the statement was RMB 11.62 billion, with a year-on-year increase of 32%. The net investment income brought by trading and agency derivatives business is an important driving factor for the growth of overall revenue. The company’s trading financial assets account for about one third of all assets, which is the main asset allocation direction. In addition, the company’s on-site option market making business is leading in the industry, and the scale of off-site equity derivatives continues to increase. In 2021, the nominal principal of equity OTC derivatives increased by 389.1 billion yuan, a year-on-year increase of 80.3%, including 190.7 billion yuan of OTC options and 19.4 billion yuan of income swaps. Cross border equity OTC derivatives added 148.8 billion yuan of nominal principal in the whole year, an increase of 338.8% year-on-year. We expect that derivatives business is an important business transformation direction of securities companies, and the leading concentration has an obvious upward trend.
Investment banking business grew steadily and an “investment banking +” ecosystem was established. In 21 years, the company’s net income from investment banking business reached 4.06 billion yuan, a year-on-year increase of 8.8%. In 21 years, the total underwriting financing of the company increased by 14.5% year-on-year, including equity financing increased by 20.5%, bond financing increased by 13.7% year-on-year, and M & A financing decreased by 13.5% year-on-year. The company’s investment banking business focuses on key industries and key regions, establishes an “investment banking +” ecosystem, and drives the development of the company’s institutional business and wealth business.
The transformation of asset management business accelerated, and product diversification driven growth. In 21 years, the net income of the company’s asset management business was 1.79 billion yuan, a year-on-year increase of 16%. Affected by the regulation, the company’s asset management scale was 384.2 billion yuan at the end of the year, a year-on-year decrease of 26.9%. However, the company actively adjusted its structure, with a collective asset management scale of 106.8 billion yuan, a year-on-year increase of 17%. In addition, the newly increased management scale of public funds is 24.1 billion, and the product innovation and transformation of public offering business drive the continuous growth of asset management business.
Maintain the “overweight” rating of a shares. In the past 21 years, the company has maintained steady growth in business performance, balanced development of various businesses, continuous improvement of operation efficiency, and good long-term operation of the company. Looking forward to the future, driven by the great development of the equity market, the space of the asset management market is expected to rise further, and the company’s proprietary business, brokerage and institutional business are expected to continue to contribute stable income. In view of the increased market volatility in 22 years and the increased uncertainty of the company’s investment income, we adjusted the net profit in 22 years and 23 years to 17.597 billion yuan (down 7%) and 20.787 billion yuan (down 12.1%) respectively, and added 24-year net profit forecast of 24.322 billion yuan to maintain the “overweight” rating of a shares.
Risk tip: the share price in the A-share market fluctuated sharply, and the policy promotion was less than expected.
