\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 030 Citic Securities Company Limited(600030) )
Event: the company released the first quarterly report of 2022, realizing an operating revenue of 15.216 billion yuan, a year-on-year decrease of 7.2%; The net profit attributable to the parent company was RMB 2.92 billion, a year-on-year increase of 2.92%; The net assets attributable to the parent company were 244320 billion yuan.
Key investment points
The growth rate of investment in the Shanghai and Shenzhen Stock Exchange fell sharply (- 1.5% / -) to – 2.3% in the same period of 2022, and the growth rate of investment in the Shanghai and Shenzhen Stock Exchange fell sharply (- 1.5% / -) to – 1.5% in line with the expectation of the parent market (- 1.5% in 2022), resulting in a sharp decline in the growth rate of investment in the Shanghai and Shenzhen Stock Exchange (- 1.5% in 2022), The company uses a variety of tools and strategies to smooth market fluctuations, and its performance is significantly better than that of the industry. 2) It is expected that the decline in the income from selling financial products on a commission basis will lead to the fluctuation of the net income of brokerage business: the average daily share based turnover in 2022q1 market will increase by + 7.29% year-on-year to RMB 1099.9 billion. We expect that the decline in the income from selling financial products on a commission basis due to the sharp decline in the market will lead to the net income of brokerage business fees of 2022q1 company from – 9.6% year-on-year to RMB 3.19 billion. 3) Reversal of asset impairment loss: in 2022q1, the company’s asset impairment loss was – 400 million yuan (400 million yuan in the same period in 2021), mainly due to the change of other asset impairment loss caused by the reversal of inventory falling price reserves of subsidiaries – 131.8%, and the change of credit impairment loss caused by the reversal of credit impairment loss of financing business – 219.1%.
The investment banking business was bright, and the two financial and asset management businesses declined slightly: 1) the growth of investment banking business increased revenue: benefiting from the continuous deepening of capital market reform, 2022q1 company achieved a year-on-year net income of investment banking fees of + 14.7% to 1.83 billion yuan (accounting for 12% of revenue), and promoted the company’s fees and commissions of + 1.7% to 8.21 billion yuan year-on-year. 2) The decline of the two financial services affected the net interest income: by the end of March 2022, the balance of the two financial services in the market had increased by 1.09% to 1672.8 billion yuan year-on-year, the company’s financing funds had decreased by – 3.2% to 114.2 billion yuan year-on-year (the market share fell from 7.12% in 2021q1 to 6.83% in 2022q1), and the net interest income of the company had decreased by – 5.8% to 1.01 billion yuan year-on-year. 3) The industry downturn affected the decline of asset management income: the sharp market fluctuation affected the net income of the company’s asset management business from – 0.4% to 2.78 billion yuan year-on-year, of which the net profit of Huaxia Fund 2022q1 was + 4.3% to 490 million yuan year-on-year. 4) The decline in bulk commodity trade income affected the company’s other business income by – 15.5% year-on-year to 2.47 billion yuan.
Profit forecast and investment rating: we expect that with the steady progress of the registration system and the continuous optimization of capital market reform, Citic Securities Company Limited(600030) as a leading securities firm, is expected to seize the opportunity, and the strong will always be strong. We lowered the forecast of net profit attributable to parent company from 2022 to 2024 to RMB 25.637 (270.43) / 309.95 (323.10) / 37087 (38.798) billion, corresponding to EPS of RMB 1.73/2.09/2.50 from 2022 to 2024, The current market value corresponds to 1.17/1.10/1.05 times P / b from 2022 to 2024, maintaining the “buy” rating.
Risk tips: 1) market transaction activity decreases; 2) Stock market fluctuations impact the return on proprietary investment. 3) Stricter supervision inhibits the development of innovative business.
