\u3000\u3000 China Stock Market News ( East Money Information Co.Ltd(300059) )
Event overview
The company announced the first quarterly report of 2022, with a total operating revenue of 3.2 billion yuan, a year-on-year increase of 11%, a net profit attributable to the parent company of 2.17 billion yuan, a year-on-year increase of 14%, a basic EPS of 0.17 yuan and an average roe of 4.19%.
Analysis and judgment:
The company’s Securities Trading Commission and net interest income increased significantly by 29% and 37% respectively, surpassing the market; Under the background of nearly 90% decline of new development funds, the operating income (mainly fund consignment business) decreased by 11%; The scale of securities investment increased significantly, the yield decreased, and the investment income increased by 15%. R & D expenses increased by 94%, and the profit margin continued to rise to 64% year-on-year.
The share of brokerage transactions and two financial markets continued to increase, and the net income from handling fees, commissions and interests were + 29% and + 37% year-on-year respectively. The average daily stock trading volume of the market in the reporting period was 1092 billion yuan, up + 7% year-on-year. The company’s net income from handling fees and commissions (mainly from securities brokerage business) increased by + 29% year-on-year to 1.35 billion yuan. According to our calculation, Dongcai securities 2022q1 trading market accounted for 4.09%, an increase of 0.66pct year-on-year.
During the reporting period, the average daily balance of two financial institutions in the market was 1.74 trillion yuan, a year-on-year increase of + 4%. The company’s net interest income increased by 37% year-on-year to 610 million yuan. In addition to the growth of interest income from customer funds and other bond investments, the market share of the company’s financed funds continued to increase. By the end of 2021, the market share of Dongcai securities financed funds was 2.45%.
The new development fund fell sharply, and the company’s fund consignment income was – 11% year-on-year
During the reporting period, the new development fund market was cold, and a total of 119.6 billion equity and hybrid funds were issued, a year-on-year increase of – 87%; In terms of monthly average holdings, the total monthly average holdings of stocks and hybrid public funds during the reporting period was 8.2 trillion yuan, a year-on-year increase of + 13%. In the case of a sharp decline in the scale of new development, the company’s commission sales revenue still maintained considerable resilience. On the one hand, due to the increase in the proportion of the company’s commission sales revenue based on the holding volume, on the other hand, based on the data of 2021q1-2021q4 Fund Industry Association, the market share of the company’s holding scale increased. However, it should be noted that the stock scale of stocks and hybrid funds in the market decreased significantly in March compared with February, with an overall decrease of 1.2 trillion yuan to 7.4 trillion yuan. If the market volatility continues, the scale of partial equity funds in the market may continue to decline.
The scale of securities investment business has increased greatly and the yield has fluctuated sharply
At the end of the reporting period, the company’s trading financial assets reached 53.63 billion yuan, an increase of 60% over the end of last year, but the securities investment income (investment income + changes in fair value) decreased significantly by 50% to 190 million yuan month on month. It is expected that this is mainly due to the company’s follow-up investment in its partial stock funds. We expect that the company’s follow-up investment scale is more than 1 billion yuan, and this part of the investment will be greatly affected by the fluctuation of the stock market.
R & D investment increased significantly, and the profit margin continued to improve
During the reporting period, the R & D expenditure was 230 million yuan, a year-on-year increase of 94%. However, under the scale effect of the Internet platform, the profit margin continued to improve, and the company’s profit margin (net profit attributable to the parent / (total operating income + securities investment income)) reached 64% in the reporting period.
Investment advice
The company’s securities and fund businesses have significantly surpassed the market, which proves that the company’s high growth logic is still in progress and the company is still in the stage of high-speed growth. Based on the market fluctuation and the change of fund holding scale under high-frequency data, we appropriately lowered the assumption of market fund holding scale and transaction scale, and correspondingly adjusted the forecast of the company’s total operating revenue of RMB 15.88/188.2/22.08 billion from 2022 to 2024 to RMB 14.39/189.2/21.91 billion; Adjust eps1 from 2022 to 2024 The forecast of 0 / 1.3 / 1.4 yuan (equivalent to 0.8 / 1.1 / 1.2 yuan after the share offering) is 0.7 / 1.0 / 1.2 yuan, corresponding to the closing price of 20.85 yuan / share on April 22, 2022, and the PE is 28.6/21.0/17.7 times respectively, maintaining the “buy” rating.
Risk tips
The market transaction shrank, the fund holding scale fell sharply, and the company’s market share increased less than expected.
