\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 211 Guotai Junan Securities Co.Ltd(601211) )
Event: on March 30, 2021, the company disclosed the annual report of 2021. Guojun’s annual operating income and net profit attributable to the parent company increased by 21.6% and 35% year-on-year to 42.8 billion yuan and 15 billion yuan, the net assets attributable to the parent company increased by 7.1% to 147.1 billion yuan compared with the beginning of the year, the weighted average roe increased by 2.51pct to 11.05% year-on-year, and the proportion of bonus to be distributed by Guojun was 40.35%, ranking among the leading securities companies, with excellent overall performance.
The financial data performed well and steadily realized the first three-year plan of “laying a foundation and making up for weaknesses”
1. At present, Guojun’s business mainly includes five sectors, including wealth management (personal brokerage, consignment and financing), investment banking, institutions and transactions (institutional brokerage, traditional proprietary trading, customer demand derivatives and equity investment), investment management (brokerage asset management, public and private fund management) and international business (Guojun International). These five sectors accounted for 32%, 8.5%, 47.3%, 5.1% and 6% of the company’s total revenue in 21 years, Among them, the investment and trading sector ranks first in all business sectors with a growth rate of 51.2%, which is the main driving force of the company’s revenue in 21 years;
2. In the 21st year, Guojun ranked 2nd and 3rd in the benchmarking company with a net profit attributable to the parent company of 15 billion yuan and a weighted roe of 11.05%, up 2 and 4 places respectively compared with 2019 (according to the measures for the administration of the implementation of A-share restricted stock incentive plan published by the company in June 20, the company selected Zhongxin, Haitong, Huatai, GF, Shenwan and China Merchants as the benchmarking companies), showing that the company’s operation is competitive among the leading securities companies, It has also unlocked the conditions of restricted stock sales for 22 years;
3. The monarch’s first three-year plan (20202022) focuses on laying the foundation and making up for weaknesses. At present, the implementation is relatively smooth:
A. in terms of making up for weaknesses, the underwriting amount and market share of the company’s equity IPO in 21 years increased by 39.6% and 46pts to 30.3 billion yuan and 5.05% respectively, and the market ranking advanced from 9-10 in 17-18 years to 6; In October of 21, the board of directors of the company approved to transfer 15% equity of Hua’an fund at a consideration of no more than 1.8 billion yuan. After the transfer, the proportion of equity of Hua’an fund held by the company will rise to 42%, and the net profit of Hua’an fund in 21 years will increase by 41.5% year-on-year to 1.01 billion yuan;
B. in terms of laying the foundation, Guojun launched a comprehensive digital transformation, put forward the “smart investment banking concept”, provided cross asset full business chain online services to all types of institutional customers through Guojun Daohe app, and built a new generation of low delay localized core trading system; At the same time, the company optimized its product sales capacity through coordination committee, standardization of business outlets and other ways. In the past 21 years, the company’s financial product consignment revenue increased by 116.4% year-on-year to 950 million yuan, ranking the top 3 in absolute value and growth rate;
The return on investment was stable, and the customer demand for equity derivatives grew rapidly
1. The investment income and fair value of Guojun in the past 21 years totaled 11.98 billion yuan. After deducting the 1.14 billion investment income generated by the equity revaluation of Shanghai Securities, the actual investment income increased by about 13%;
2. In recent years, Guojun has achieved rapid table expansion without equity refinancing. In 21 years, trading financial assets increased by 24.3% year-on-year to 284.4 billion yuan, and the overall return on investment decreased by 24bp to 4.02% year-on-year, showing a stable performance; In the distribution of trading financial assets, bond and stock assets increased by 7.3% and 40% year-on-year to 115.9 billion yuan and 35.1 billion yuan respectively, and the scale of traditional equity self operation accounted for about 10% of stock assets;
3. The investment income of the parent company of Guojun securities increased by 38.8% year-on-year to 8.25 billion yuan in 21 years. We expect that the investment contribution ratio of fixed income, traditional equity and equity derivatives is about 55%, 25% and 20%; However, there is still a gap between the hedging scale of customer demand derivatives of 30 billion yuan and the volume of CITIC CICC of more than 100 billion yuan;
Investment suggestion: the performance data of Guojun’s annual report for 21 years are excellent, and the core indicators such as net profit and roe have risen steadily in the ranking of the target company. While maintaining the operating advantages of individual customers, the company has developed rapidly in equity IPO, customer demand equity derivatives and other businesses. The company has moved steadily along the three-year three-step plan, affected by the decline of the equity market in 22 years, We expect that the net profit and net assets attributable to the parent company in the past 22 years will increase by 3.65% and 6.40% year-on-year respectively to 15.6 billion yuan and 156.5 billion yuan (the previous values are 16.78 billion yuan and 159.3 billion yuan respectively). The current stock price corresponds to 9.1 times and 0.9 times of PE and Pb in the past 22 years, maintaining the buy in rating;
Risk tip: the reform of the capital market is slower than expected, the equity market has fallen sharply, the operation of the three major customer groups of companies, institutions, retail, individuals and enterprises is weaker than expected, and the overseas market has fluctuated sharply;
