\u3000\u3000 China Stock Market News ( East Money Information Co.Ltd(300059) )
The growth rate of net profit attributable to the parent company in the first quarter of 2022. China stock market news released the first quarter report of 2022 on April 22, with a revenue of 3.196 billion yuan in the first quarter, a year-on-year increase of 10.61%; The net profit attributable to the parent company was 2.171 billion yuan, a year-on-year increase of 13.63%; The net profit after deducting non-profit was 2.004 billion yuan, a year-on-year increase of 5.34%.
The income is in line with expectations and reflects the resilience under the sharp fluctuation of the market. The revenue of Dongcai 22q1 increased by 10.61%. Specifically, the revenue from information technology services was 1.24 billion yuan, a year-on-year decrease of 11.5%; Interest income was 610 million yuan, a year-on-year increase of 37.2%; The income from handling fees and commissions was 1.35 billion yuan, a year-on-year increase of 28.9%. Considering the sharp fluctuations in the market at the beginning of 2022, Dongcai can still achieve steady growth under the background that its business is highly in line with the capital market, which is enough to show its growth toughness.
The profit side maintained a good growth rate, and the investment style was stable to hedge against fluctuations. The company’s 22q1 profit growth rate was 13.63%, which also maintained a good growth. In terms of specific split, the year-on-year changes of sales, management and R & D expenses are – 27%, 26% and 94% respectively. The company has increased R & D investment in 21 years and expanded the scale of wealth managers, so the cost side has increased to a certain extent. Another big change of Dongcai in the 2021 annual report lies in the expansion of self operated investment scale, but the company’s investment style is stable as a whole, and the proportion of bond scale is relatively high. The investment income of 22q1 Dongcai reached 447 million yuan, a year-on-year increase of 176%, mainly due to bond investment income. The steady investment income also resists market fluctuations to a certain extent. The fair value profit and loss of 22q1 is -255 million yuan.
The growth of securities business is full of toughness, and the ceiling has not been reached. Dongcai’s securities business 22q1 maintained a high growth, and the year-on-year growth rates of interest income and handling fee income were 37.2% and 28.9% respectively. In terms of business, 22q1 Dongcai financed 39.7 billion yuan, a year-on-year increase of 21%, but the ring ratio decreased slightly, and the average interest rate was estimated to be 5.83%, which remained basically stable; The bilateral transaction volume of stocks in 22q1 market increased by 7% year-on-year, while the company’s commission income grew faster. It is expected that the increase of market share and the continuous growth of futures brokerage business are mainly expected.
The fund sales business is under short-term pressure, waiting for the market to pick up. The company’s 22q1 information technology service revenue fell by 11.5% year-on-year, of which 90-95% is expected to be fund sales revenue. Affected by the sharp fluctuations in the capital market, especially the overall performance of public funds, the fund sales market showed a downturn as a whole. Superimposed on the high base of 21q1 fund sales revenue (mainly the sharp increase in transaction volume under active market), the fund sales business declined in a single quarter. We believe that the core of fund sales lies in the tail commission income with holding as the core. Short term market fluctuations have not changed the wealth management trend and the company’s excellent business model. Once the market warms up and expectations reverse, the capital market investment represented by public funds is still the most core wealth management tool. Dongcai has 17 million + high-quality flow, and fund sales and holding are expected to rebound.
Investment recommendations: the company’s net profit in the 22-24 years is expected to be 102.3, 126.9 and 15 billion 400 million yuan respectively. The current market value corresponds to the 27 year, 22, 18 times of 22/23/24 value. Considering the scarcity of the Internet plus license, the leading position of the industry and the current valuation of the China Stock Market News, compared with its own historical valuation, we believe that the current company is undervalued and maintained “recommended” rating.
Risk warning: the turnover in the capital market is less than expected; The issuance and sales in the fund market are less than expected; The company’s securities business development is not enough.
