\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 999 China Merchants Securities Co.Ltd(600999) )
Affected by the downturn in the equity market in the first quarter of 2022, the company’s self operated business income fell sharply, dragging down the overall performance in the first quarter. The brokerage business and asset management business also fell year-on-year, and the investment banking business grew driven by equity underwriting. We are optimistic about the cooperation between the company, China Merchants Group and China Merchants Bank Co.Ltd(600036) business. The target price is 18.02 yuan, maintaining the rating of “better than the big market”.
[event] China Merchants Securities Co.Ltd(600999) announced the results of the first quarter of 2022: the revenue in the first quarter of 2022 was 3.7 billion yuan, a year-on-year increase of – 38%; The net profit attributable to the parent company was 1.49 billion yuan, a year-on-year increase of – 43%; Corresponding to eps0 15 yuan, single season roe1 36%。
The year-on-year decline in brokerage business may be caused by the decrease in the income from selling financial products on a commission basis. In the first quarter of 2022, the brokerage business income was 1.65 billion yuan, a year-on-year increase of – 11.6%. We expect that the main reason is the sharp decline in the income from selling financial products on a commission basis and the continued decline in the commission rate due to the impact of the equity market. The net interest income was 190 million yuan, with a year-on-year increase of – 63.0%. We believe that it is due to the increase in interest expenses caused by the issuance of sustainable subordinated bonds in the first quarter of 2022. In the first quarter of 2022, the trading volume of the whole market was active. The daily average stock based trading volume of the whole market was 1076 billion yuan, a year-on-year increase of + 7.2%, and the balance of two financial institutions was 1672.8 billion yuan, a year-on-year increase of + 1.1%, a year-on-year decrease of – 8.7%.
The income of investment banks increased slightly, and the amount of equity underwriting increased significantly. In the first quarter of 2022, the company’s investment banking revenue was 449 million yuan, a year-on-year increase of + 8.7%. The underwriting scale of shares and bonds was + 105% and – 28% year-on-year respectively. The main underwriting scale of equity was 18.5 billion yuan, ranking No. 6; Among them, ipo2, with a fund-raising amount of 3 billion yuan; Refinance 6 companies, with an underwriting scale of 15.5 billion yuan. The principal underwriting scale of bonds was 63.9 billion yuan, ranking No. 9; The underwriting scale of financial bonds, ABS and corporate bonds reached 16.5 billion yuan, 23.4 billion yuan and 14.6 billion yuan. There are 25 IPO reserve projects, ranking 17th, including 10 on the main board, 2 on the gem, 10 on the science and innovation board and 3 on the Beijing stock exchange.
Actively transform to active management and look forward to long-term performance growth in the future. In the first quarter of 2022, the company’s asset management business revenue was 210 million yuan, a year-on-year increase of – 21.6%. At the end of 2021, the asset management scale was 483.2 billion yuan, a year-on-year increase of – 10.8%. At the end of 2021, the active management scale (excluding the special asset management plan) was 346.4 billion yuan, a year-on-year increase of + 29.7%, accounting for 82.9%, a year-on-year increase of 27.0 percentage points. At the end of 2021, the scale of entrusted fund management of the subsidiary’s investment promotion and asset management compliance ranked fifth in the industry, and the average monthly scale of private placement actively managed assets ranked fourth in the industry in 2021.
Proprietary income increased significantly. The net investment income (including fair value) was 180 million yuan, a year-on-year increase of – 91%. We expect that it is mainly due to the sluggish performance of the equity market in the first quarter, and wandequan a fell by 14% in total. The company adheres to the goal of “large and stable”, strengthens directional investment ability, strengthens the construction of credit system, comprehensively investigates credit risks, and maintains the stability of scale and income.
Investment suggestion: we expect that the company’s EPS in 202224e will be 1.49/1.62/1.76 yuan and BVPs will be 12.01/12.88/13.88 yuan respectively (unchanged). We are optimistic that China Merchants Securities Co.Ltd(600999) will cooperate with China Merchants Group and China Merchants Bank Co.Ltd(600036) business and give it 1.5xp/b in 2022 (originally 1.6x2022p / b), corresponding to the target price of 18.02 yuan (down 6%), maintaining the rating of “better than the big market”.
Risk tip: the trading volume continues to decline, and the volatility of the equity market intensifies, resulting in the continuous decline of investment income.
