\u3000\u3000 China Stock Market News ( East Money Information Co.Ltd(300059) )
Core view
The market share of brokerage business and two financial services has not yet peaked. The company’s huge customer flow, lower commission than peers, perfect financial ecology and professional platform services have become the key to the sustainable growth of brokerage business. The company actively arranged its offline business department, expanded its capital and provided lower financing interest rate, so that the scale of the two financing businesses continued to expand. In addition, the average customer assets of the company are far lower than those of other securities companies. With the growth of customers’ age and economic ability and the increase of residents’ financial asset investment asset scale, the average customer assets have great room for improvement. The market share of the company’s securities business has broad room for growth. The leading advantage of fund consignment is remarkable, and the market share has increased steadily. China’s public fund market is still in its infancy, and its proportion in GDP is much lower than that of the United States. The current development stage is similar to that of the United States in 1991. In the next 8-10 years, the scale of China’s public fund market is expected to see a compound annual growth rate of about 20%. China stock market news relies on rich product supply, mature fund specialization platform and the diversion of group business. The market share of non commodity based and stock + hybrid funds has increased steadily for three consecutive quarters, and the scale of holdings has increased to the third place. The company’s leading advantages appear and will fully benefit from the development of the public fund market in the future.
Expand diversified realization channels and lay out passive investment tracks in advance. The company has expanded diversified realization channels such as insurance, funds, overseas securities investment and investment advisers to tap customer value. Among them, passive investment may be the next outlet. From the development experience of American mutual funds, the net inflow of passively managed funds in recent ten years is greater than that of actively managed funds. China’s index funds account for only 14% of the scale of non monetary public funds, which is far behind that of the United States. With the entry of pensions into the market in the future, the development space of index fund market is broad. Dongcai fund is arranged in advance, focusing on ETF and index funds, and is expected to enjoy the next wave of market development dividends.
Compared with Jiaxin financial management, the gap between Dongcai and Jiaxin financial management lies in the diversification of platforms. The key to the success of Jiaxin financial management lies in its low commission strategy to obtain customer flow, realize diversified cash and tap customer value. The current development path of China stock market news is similar to that of Jiaxin wealth management, which obtains customers through information websites and low commission strategy. However, the biggest difference between the two is that Dongcai can not operate in a mixed way, and the realization channel is still developing. In the future, with the gradual increase of the market share of two financial services and public fund consignment business, and the gradual maturity of financial services such as Dongcai fund and investment advisory platform, Dongcai is expected to become the Chinese version of “Jiaxin wealth management”.
Investment advice
We estimate that the total operating revenue of the company from 2022 to 2024 will be 17.494 billion yuan / 21.737 billion yuan / 26.461 billion yuan, with a year-on-year increase of 33.6% / 24.3% / 21.7%; The net profit attributable to the parent company was 11.611 billion yuan / 15.199 billion yuan / 18.691 billion yuan, with a year-on-year increase of 35.8% / 30.9% / 23.0%. Based on the closing price on April 14, 2022, the corresponding 2022pe is expected to be 25.44 times respectively. We are optimistic about the development prospect of the company, covering it for the first time and giving it a “strongly recommended” rating.
Risk tips
The activity of stock based trading decreased, the subscription volume and holding volume of the fund market fell more than expected, the epidemic was repeated, and the economic decline exceeded expectations.
