\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 999 China Merchants Securities Co.Ltd(600999) )
Core view
China Merchants Securities Co.Ltd(600999) disclosed the first quarter report of 2022. In 2022, the company realized an operating revenue of 3.696 billion yuan, a year-on-year decrease of 38.01%; The net profit attributable to the parent company was 1.49 billion yuan, a year-on-year decrease of 42.99%. The weighted average return on net assets in the first quarter of 2022 was 1.36%, a year-on-year decrease of 1.27 percentage points. The basic earnings per share was 0.15 yuan, a year-on-year decrease of 46.43%. Brokerage, investment banking, asset management, credit and investment businesses accounted for 45%, 12%, 6%, 5% and 5% respectively.
Brokerage business decreased by 11.58% year-on-year, and credit business decreased by 63.06% year-on-year. In the first quarter of 2022, the average daily turnover of A-Shares was 1007365 billion yuan, a year-on-year increase of 6.77%; The balance of the two financial institutions was 1679276 billion yuan, a year-on-year increase of 1.82%. In the first quarter, the company realized a brokerage business income of 1.649 billion yuan, a year-on-year decrease of 11.58%, accounting for 45%; The income from credit business was 188 million yuan, a year-on-year decrease of 63.06%, mainly due to the significant increase in interest expenses. By the end of 2021, the company had 563500 wealth management customers, assets of wealth management customers reached 1.67 trillion yuan, with a year-on-year increase of 24.12% and 21.90% respectively, and 30600 high net worth customers, with a year-on-year increase of 26.97%; In 2021, the company obtained the pilot qualification of fund investment consulting business, and the signing scale at the end of the year was nearly 2.4 billion yuan.
The investment business decreased by 91.02% year-on-year, and the asset management business decreased by 21.59% year-on-year. In the first quarter of 2022, affected by market fluctuations, the company realized investment business income (net investment income – investment income to associates and joint ventures + changes in fair value) of 175 million yuan, a year-on-year decrease of 91.02%, and the proportion of income contribution decreased from 32% in 20201 to 5%. By the end of the first quarter, the total scale of the company’s financial investment assets was 308490 billion yuan, unchanged from the end of 2021. In the first quarter, the revenue from asset management business was 207 million yuan, a year-on-year decrease of 21.59%. By the end of 2021, the entrusted asset management scale of the company was 483153 billion yuan, ranking fifth in the market.
Investment banking business increased by 8.72% year-on-year. In the first quarter of 2022, the company achieved investment banking revenue of 449 million yuan, a year-on-year increase of 8.72%. In the first quarter, the company underwritten 2 IPO projects as the lead underwriter, with a market share of 2%, ranking 11th in the industry; There are 3 additional issuance projects, with a market share of 3.53%, ranking 10th in the market. In the first quarter, the company completed an underwriting amount of 82.424 billion yuan, ranking ninth in the industry, including an IPO underwriting scale of 3.035 billion yuan and a market share of 2.29%.
Risk warning: market decline brings uncertainty to bond business performance and valuation repair; Stricter financial supervision; Intensified market competition; Tight liquidity leads to rising financing costs; The promotion of innovation is less than expected.
Investment suggestion: we lowered the net profit of the company from 2022 to 2024 to 11.2 billion yuan, 13.4 billion yuan and 15.4 billion yuan respectively, with a year-on-year increase of – 3.6% / 19.0% / 15.4%. The PE corresponding to the current stock price is 10.0/8.4/7.3x and Pb is 0.9/0.9/0.8x. We maintain the “overweight” rating for the company.
