\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 377 China Industrial Securities Co.Ltd(601377) )
Event: the company disclosed its 2021 annual report and realized an operating revenue of 19 billion yuan (YoY + 8%), a net profit attributable to the parent company of 4.7 billion yuan (YoY + 18%) and roe12.0% 04%（YoY+0.97pct.）， EPS0. 71 yuan (YoY + 18%).
We believe that the company’s highlights include: 1) the company’s roe performance and leverage ratio are better than those of the industry; 2) The scale of asset management was improved, and the performance contribution of public offering subsidiaries was further increased to 28.5%; 3) The overall performance of asset light business was excellent, dragged down by the decline in the rate of return on proprietary investment, and the performance growth rate of + 18% was slower than that of the industry (+ 21%).
Overall: 1) the company’s roe level reached 12.04%, increased by 0.97pct, better than the industry (7.83%); 2) The leverage ratio of the company was 3.59 times, up 0.14 times, higher than that of the industry (3.38 times); 3) According to the business division of the traditional five sectors, in terms of income structure, investment and brokerage income account for the highest proportion, accounting for 20% and 19% respectively, and the rest of credit, investment banking and asset management account for 9%, 7% and 1% respectively; Asset management, credit and brokerage revenue achieved positive growth, reaching + 73%, + 48%, + 28% respectively, investment banking and investment – 10%, – 21% respectively. 4) The reversal of asset impairment loss was 64 million yuan, and 640 million yuan was withdrawn in the same period last year.
The scale of asset management was further improved, and the performance contribution of public offering subsidiaries was improved: 1) in the asset management sector of securities companies, by the end of 2021, the total entrusted capital of Xingzheng asset management was 60 billion yuan, a year-on-year increase of + 4%; 2) In the public fund sector, in 2021, Xingzheng Global Fund realized a net profit of 2.2 billion yuan, a year-on-year increase of + 40%, and the South Fund realized a net profit of 2.2 billion yuan, a year-on-year increase of + 46%. The total contribution of the public fund sector to the company’s net profit reached 28.5%, an increase of 4.8pct. By the end of 2021, the total asset management scale of Xingzheng Global Fund was 673 billion yuan, a year-on-year increase of + 27%, of which the scale of public funds was 590.2 billion yuan, a year-on-year increase of + 30%.
Continue to promote the transformation of wealth management and maintain the leading position in the consignment business: 1) in the securities brokerage sector, the company achieved a stock based turnover of 9.13 trillion yuan, a year-on-year increase of + 21%, with a market share of 1.65%, a decrease of 0.06pct; 2) In the financial product sales sector, the parent company achieved a net income of 769 million yuan from the sales of agency financial products, a year-on-year increase of + 43%, stabilizing the top ten in the industry; 3) In the margin trading and securities lending sector, by the end of 2021, the company’s two financing balance was 33.6 billion yuan, a year-on-year increase of + 9%, and the two financing business income was 2.1 billion yuan, a year-on-year increase of + 35%; 4) In the stock pledge sector, by the end of 2021, the scale of the company’s stock pledge business was 2.9 billion yuan, a year-on-year increase of – 43%.
The investment banking business has significant regional advantages, and the return on self operated investment has declined: 1) in 2021, the company completed equity financing of 24.4 billion yuan, a year-on-year increase of + 25%, ranking 13 in the industry, rising three places, including projects in Fujian Province of 13.1 billion yuan, ranking first in the region. The company completed a debt commitment scale of 87.5 billion yuan, a year-on-year increase of + 16%, ranking 16th in the industry and rising by one. 2) By the end of 2021, the company’s financial investment assets were 82.2 billion yuan, a year-on-year increase of + 12%, of which the trading financial assets were 60.1 billion yuan, a year-on-year increase of + 21%. The estimated return on investment was 6.8%, down 2.9pct.
Investment suggestion: buy – a investment rating. The “two wheel drive” business system of the company’s large institutions and wealth management has been continuously improved, and the comprehensive financial service capacity has been improved. The follow-up company plans to raise 14 billion shares, which is expected to open the development space of heavy capital business. We expect the net profit attributable to the parent company from 2022 to 2024 to be 5.3 billion yuan, 5.9 billion yuan and 6.7 billion yuan respectively. Give the company a target price of 9.5 yuan, corresponding to 1.2x2022epb
Risk warning: the market fluctuates sharply, the strategic promotion is less than expected, and the liquidity is tightened significantly
