\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 999 China Merchants Securities Co.Ltd(600999) )
Multiple factors to build the company’s core competitive advantage: 1) adhere to steady operation and win the “AA” rating for 14 consecutive years, laying the foundation for development; 2) Enhance the competitiveness of wealth management business and highlight the business service ability of institutional customers; 3) The actual controller, China Merchants Group, has strong strength and helps the company build brand effect.
Balanced business structure and steady growth. In 2021 China Merchants Securities Co.Ltd(600999) achieved revenue / net profit of 29.4/11.6 billion yuan, yoy + 21.2% / + 22.7%; Weighted average roe11 52%，yoy+0.67pct； Brokerage, investment banking, asset management, credit and self operation accounted for 26.9% / 8.6% / 3.5% / 5.8% / 37.6%.
The core indicators of wealth management continued to grow at a high rate, and the income from brokerage business entered the top three in the industry. In 2021, the market share of the company’s A-share base increased by 0.65pct to 4.9%, and the market share of the net income from securities trading business increased to 4.8%. By the end of 21, the number of customers of the company was about 14.79 million, yoy + 29%; The number of new accounts opened in the whole year ranked first in the industry, yoy + 82%; The net income and ranking of financial products sold on a commission basis reached a new high.
The scale and rate of return of self operated investment have been improved, and the overall allocation is relatively stable. The scale of the company’s financial assets is 311.7 billion yuan, yoy + 36%, accounting for 52% of the total assets; Net investment income + profit and loss from changes in fair value totaled 11.1 billion yuan, with an annualized rate of return of 4.09%, an increase of 0.4pct over 20 years.
Public offering associates are the highlight of investment management business, contributing a total profit and loss of 1.59 billion yuan, accounting for 13.7%. In 2021, Boshi fund realized a revenue of 5.76 billion yuan, yoy + 36.4%; Net profit of 1.78 billion yuan, yoy + 42.6%, roe of 25%; China Merchants Fund achieved revenue of 5.23 billion yuan, yoy + 62%, net profit of 1.6 billion yuan, yoy + 77%, and roe of 23%.
The investment level is expected to be 14.00% . Since 2019, the median valuation of the company is 1.72 times Pb. The company’s wealth management business has obvious advantages. The issuance of perpetual bonds is good for the heavy capital business, giving the company a valuation of 1.5 times Pb in 2022, with a corresponding target price of 20.75 yuan / share, and a “buy” rating for the first time.
Risk tips: market fluctuation risk, lower than expected capital market reform, operation and business risk.
