\u3000\u3000 China Stock Market News ( East Money Information Co.Ltd(300059) )
Event: on April 22, China stock market news disclosed the results. The operating revenue and net profit attributable to parent company of 22q1 company increased by 10.6% and 13.6% year-on-year to 3.196 billion yuan and 2.171 billion yuan respectively, the quarterly net profit margin increased by 1.8pct to 67.9% year-on-year, and the quarterly roe was 4.33%. After removing government subsidies, the net profit deducted from the disposal of non liquid assets increased by 5.34% year-on-year, which was basically in line with the expectation;
The performance of consignment business is weak, and the growth of brokerage commission continues to significantly exceed that of the industry
1. 22q1 Dongcai fund sold on a commission basis, and the net income from handling charges and interest was – 11.5%, 29.0% and 37.3% year-on-year respectively to 1.24 billion yuan, 1.35 billion yuan and 610 million yuan, accounting for 38.8%, 42.3% and 18.9% of the total revenue respectively;
2. The performance of the fund consignment business is weak. According to the data of the fund industry association, the non commodity base of Dongcai at the end of 21 was about 673.9 billion yuan. We expect that the guaranteed amount of Dongcai non commodity base at the end of 22q1 may decrease by 8% – 10% compared with the beginning of the year, but there is still an increase of about 45% compared with 432.4 billion yuan at the end of 21q1; At the end of 21q1, the proportion of equity and hybrid funds with high fee rate in the East Finance Africa commodity base was at a high level of 87%. Under the pressure of the equity market this year, we expect that more customers choose to turn equity funds to low rate fixed income funds, which will partially offset the increase of tail commission income brought by the growth of ownership. At the same time, we expect that the year-on-year change of subscription and redemption income of 22q1 Tiantian fund is basically synchronized with the performance of – 77% of new funds in the market in the same period;
3. The net income growth rate of 29% of the handling fee of Dongcai 22q1 is much higher than the growth rate of 7.04% of the stock based trading volume in the market. We expect the market share of Dongcai 22q1 to increase by about 18bp month on month, still showing strong growth;
4. The net interest income of Dongcai 22q1 increased significantly year-on-year by 37.3% to 610 million yuan. We expect that the incremental part mainly comes from the interest income of other creditor’s rights investment (about 100 million). The market share of the company’s two financial balances at the end of Q1 is about 2.37%, basically the same as that at the end of 21, with a stable performance;
5. The total investment income and fair value of Dongcai 22q1 increased slightly by 15% year-on-year to 170 million yuan, mainly due to the supplement of more funds by the company’s convertible bonds, the significant growth of the financing scale of selling repurchase, the weak demand for financial resources of the two countries, and the transfer of some other creditor’s rights assets to accounts after settlement. At the end of 22q1, the scale of trading financial assets increased significantly by 30.9 billion yuan year-on-year and 20.1 billion yuan month on month, respectively, to 53.6 billion yuan, Most of them are creditor’s rights assets, and the increase of interest income offsets part of the decline of fair value;
6. The operating cost rate of Dongcai 22q1 increased by 2.35% to 31.55% year-on-year under the positive growth of 10.6% year-on-year of operating revenue, mainly due to the relatively rigid R & D expenses, with a year-on-year increase of 94% to 240 million yuan in a single quarter;
The performance of the equity market in the past 22 years was weak, and the expectation of the company’s annual net profit was lowered. Affected by the large fluctuation and overall weakness of the equity market in the past 22 years, we adjusted the annual assumption as follows, and predicted that the company’s annual net profit in the past 22 years would increase by 2.1% year-on-year to 8.73 billion yuan;
1. In the past 22 years, the average daily stock based trading volume of the whole market decreased by 6.5% year-on-year to 995 billion yuan, and the market share of Dongcai increased by 75bp to 4.9% year-on-year;
2. In the year of 22, the average daily balance of the two financial institutions in the market decreased by 3.5% year-on-year to 1.69 trillion yuan, the market share of the two financial institutions at the end of the year slightly increased by 18bp to 2.55% year-on-year, and the increase in the scale of other debt investment will bring about an increase in net interest income of about 150million yuan;
3. In 22 years, the average monthly holding scale of non commodity base of Dongcai remained at about 600 billion, but the proportion of equity and mixed funds decreased from 83% in 21 years to 75%, and the scale of subscription and redemption was about 35% of that in the same period;
4. The high growth of R & D expenses will promote the operating expense rate to rise by about 1PCT to 32.5% year-on-year;
To sum up, the performance of Dongcai in the first quarter was relatively flat, and the net fee income that continued to surpass the market was the highlight. The performance of the consignment business was slightly lower than expected under the background of cold market and institutional redemption. The performance of the equity market has been weak since 22 years. We lowered the net profit of the company in 22 years by 2.1% to 8.73 billion yuan (the previous value increased by 20.7% to 10.32 billion yuan). The current share price corresponds to 31.6 times of PE in 22 years, maintaining the buy rating.
Risk warning: the market trading volume and the balance of two financial institutions have decreased significantly, and the fund ownership and sales scale have decreased significantly; The company’s senior executives greatly reduced their shares;
