\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 688 Huatai Securities Co.Ltd(601688) )
Event: the company disclosed its 2021 annual report, realizing an operating revenue of 37.9 billion yuan (YoY + 21%), a net profit attributable to the parent company of 13.3 billion yuan (YoY + 23%), and a roe of 9.84% (YoY + 1.23pct.), EPS 1.47 yuan (YoY + 23%).
We believe that the company’s highlights include: 1) the company’s roe level and leverage are better than the industry; 2) Balanced development of all business segments to maintain leading edge; 3) Fintech enables wealth management and platform operation to enhance user stickiness. 4) The OTC derivatives business has developed rapidly and expanded rapidly. 5) The performance of international subsidiaries increased.
Overall: 1) the company’s roe level reached 9.84%, increased by 1.2pct, better than the industry (7.83%); 2) The leverage ratio of the company was 4.36 times, down 0.11 times, higher than that of the industry (3.38 times); 3) According to the business division of the five traditional sectors, in terms of income structure, investment and brokerage income account for the highest proportion, accounting for 30% and 21% respectively, while the rest of investment banking, asset management and credit account for 11%, 10% and 10% respectively; The growth rate of credit and asset management business was the highest, reaching + 44% and + 27% respectively, and that of brokerage, investment banking and investment reached + 22%, + 19% and + 11% respectively.
With the transformation of wealth management enabled by science and technology, the development of fund investment advisers has improved: 1) in 2021, the company achieved a stock based turnover of 42 trillion yuan, a year-on-year increase of + 24%, with a market share of 7.65%, ranking first in the industry. “Rising music fortune link” has an average monthly life of 8.91 million, ranking first in the industry. 2) The sales scale of the company’s financial products reached 759.4 billion yuan, a year-on-year increase of + 8%. By the end of 2021, the company’s equity and non cash funds had a holding scale of 85 and 93.2 billion yuan, ranking second in the industry. 3) By the end of 2021, the authorized assets of the fund investment advisory business were 19.5 billion yuan and the number of participating customers was 720000. 4) By the end of 2021, the balance of the company’s two financial services was 137.7 billion yuan, a year-on-year increase of + 11%, and the market share was 7.52%, down 0.15 PCT. 5) The scale of stock pledge business was 43.9 billion yuan, a year-on-year increase of + 40%.
The investment banking business ranks at the forefront of the industry, and the transformation of asset management business is accelerated: 1) the company has completed equity underwriting of RMB 176.2 billion, a year-on-year increase of + 19%, ranking fourth in the industry. By the end of 2021, the company has accepted 109 IPOs under the registration system of science and innovation board and gem, ranking third in the industry; 2) The company’s debt commitment reached 931.1 billion yuan, a year-on-year increase of + 64%, ranking third in the industry. 3) By the end of 2021, Huatai asset management had a total asset management scale of 518.6 billion yuan, a year-on-year increase of – 12%. The company focused on the quality of asset management scale, accelerated the transformation of active management, and further increased the proportion of active management scale.
Rapid expansion of OTC derivatives business and high growth of international business performance: 1) by the end of 2021, the survival scale of the company’s revenue swap business was 152.6 billion yuan, a year-on-year increase of + 200%; The scale of OTC derivatives business was 122.2 billion yuan, a year-on-year increase of + 238%. 2) Huatai international realized a net profit of 1.2 billion yuan, a year-on-year increase of + 442%. By the end of 2021, the asset scale of Huatai international was nearly HK $200 billion, ranking the first tier of Chinese securities companies in Hong Kong.
Investment suggestion: buy – a investment rating. The company’s comprehensive strength ranks at the forefront of the industry, firmly implements the two wheel drive development strategy of wealth management and institutional services under the empowerment of science and technology, and continuously improves its digital operation ability. At the current time point, the company’s valuation is at a historically low level, with large repair space. We expect the net profit attributable to the parent company from 2022 to 2024 to be 15.1 billion yuan, 17.3 billion yuan and 20.5 billion yuan respectively. The target price is 21.6 yuan, corresponding to 1.2x2022e Pb.
Risk tip: liquidity has been significantly tightened, the strategic promotion is less than expected, and the industry competition has intensified
