\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 688 Huatai Securities Co.Ltd(601688) )
Event: the company released its annual report for 2021, realizing a revenue of 37.9 billion yuan, a year-on-year increase of 21%; The net profit attributable to the parent company was 13.3 billion yuan, a year-on-year increase of 23%, corresponding to EPS of 1.47 yuan / share; The net assets attributable to the parent company are 148.4 billion yuan, corresponding to BVPs of 16.35 yuan / share.
Key investment points
Derivatives drive proprietary investment, and the interest income of Liangrong has increased steadily. 1) In 2021, the company achieved an operating revenue of 37.9 billion yuan, a year-on-year increase of + 21%, mainly driven by self operated business (11.3 billion yuan, a year-on-year increase of + 11%) and brokerage business (7.9 billion yuan, a year-on-year increase of + 22%); The net profit attributable to the parent company increased by 23% year-on-year to 13.3 billion yuan, and the performance met our expectations. 2) In 2021, the company achieved self operated investment of + 11% to 11.3 billion yuan year-on-year, which is the main source of income of the company (accounting for 30%). With the help of research and application of technical means such as big data and artificial intelligence, the company improved the macro hedging transaction mode, promoted the improvement of transaction scale and profitability, significantly increased the floating profit of derivative financial instruments, increased the income from changes in fair value by 3.1 billion yuan, and turned losses into profits (the same period last year – 2.7 billion yuan). 3) In 2021, the company continued to optimize the new digital operation mode of securities lending industry, and the development trend of capital intermediary business was good. The net interest income was + 44% to 3.8 billion yuan year-on-year, which was + 48% to 9.1 billion yuan year-on-year, and the interest rate of Liangrong increased by 0.51 PCT to 6.94% year-on-year.
Technology enables wealth management and institutional services, and the two wheel drive development strategy has reached a new level. 1) In 2021, the company’s wealth management business revenue increased by 31% year-on-year to 16.3 billion yuan, accounting for 43.0% of the total revenue (39.7% in the same period last year). The growth of wealth management business mainly benefited from the active trading in the stock market, the continuous expansion of financing scale, the growth of securities brokerage commission and two financial interest income. The company’s share based trading volume increased by 23.7% to 42.3 trillion yuan year-on-year (ranking first in the market), the net income of securities brokerage business increased by 19.4% to 7.22 billion yuan year-on-year, and the net income of futures brokerage business increased by 60.3% to 660 million yuan year-on-year. Based on the trading service advantages of advanced digital wealth management platform, the company takes operation as the core architecture system to drive the high-quality development of wealth management business and provide diversified wealth management services for all kinds of customers. By the end of 2021, the cumulative downloads of “Zhangle fortune” had reached 65.319 million. By the end of December 2021, the monthly number of live accounts had reached 11.018 million (ranking first in securities company apps), and the number of mobile terminal customers opening accounts had reached 2.6 million (accounting for 99.4% of all accounts). 2) In 2021, the operating revenue of the company’s institutional service business increased by 23.0% year-on-year to 9.32 billion yuan (accounting for 24.6% of the total revenue). The growth of institutional service business mainly comes from the good performance of investment banking and investment trading business. The net income of investment banking business was 4.34 billion yuan (year-on-year + 19.2%); According to wind statistics, the company’s IPO underwriting scale increased from + 49.0% to 35.8 billion yuan year-on-year, and the market share increased to 6.60% of the top three in the industry (5.11% in the same period last year); The amount of debt commitment increased by 63.5% year-on-year to 896.2 billion yuan, accounting for 7.89% (5.45% in the same period last year). The performance drivers of investment trading business mainly include equity, ficc and OTC derivatives trading.
Continue to strengthen overseas layout and focus on the origin of securities companies across borders. The company’s international business layout is developing rapidly. In 2021, the company’s international business revenue was 6.31 billion yuan (year-on-year + 60.2%), accounting for 16.6% of the company’s total revenue (year-on-year + 4.1pct). The company’s international business performance rose, benefiting from the performance improvement of Huatai financial holding (Hong Kong) and assetmark. 1) In 2021, the total assets under custody of Huatai financial holding (Hong Kong), a subsidiary, were HK $72.08 billion, and the total stock trading volume was HK $328.45 billion. 2) The asset scale of tamp is USD 93.1 billion, ranking the third in the U.S. tamp industry with a year-on-year asset ratio of 2.5%; The platform service terminal account covers 210000 families (year-on-year + 12.3%). 3) The subsidiary Huatai Securities Co.Ltd(601688) (USA) obtained the US broker dealer license in 2019, the self operated license in 2020, and the business qualification to conduct securities trading with institutional investors in Canada in 2021.
Profit forecast and investment rating: the company’s performance will maintain steady growth in 2021, the transformation of science and technology enabled wealth management will continue to advance, the platform and ecological development will polish the whole business chain service system, the overseas layout will develop rapidly, highlight the competitive advantage, and have a good long-term development prospect. We predict that the net profit attributable to the parent company from 2022 to 2024 will be 15.4/182/20.7 billion yuan, corresponding to EPS of 1.70/2.01/2.28 yuan from 2022 to 2024, and the current market value corresponds to P / b0.00 yuan from 2022 to 202489 / 0.82/0.75 times, maintaining the “buy” rating.
Risk tips: 1) market transaction activity decreases; 2) Stock market fluctuations impact on self operated investment income; 3) The epidemic control was less than expected.
