\u3000\u3000 Citic Securities Company Limited(600030) (600030)
Event: Citic Securities Company Limited(600030) (600030. SH) released the 2021 annual performance express, and the company’s investment banking, asset management and other businesses developed in a balanced and steady manner in 2021. According to the preliminary accounting data, the company achieved an operating revenue of 76.57 billion yuan in 2021, a year-on-year increase of 40.80%; The net profit attributable to the shareholders of the parent company was 22.979 billion yuan, a year-on-year increase of 54.20%; The basic earnings per share was 1.77 yuan, a year-on-year increase of 52.59%, and the weighted average return on net assets was 12.01%, an increase of 3.58 percentage points over 2020. In a single quarter, the company is expected to achieve a net profit of 5.334 billion yuan in the fourth quarter of 2021, a year-on-year increase of 138% and a month on month decrease of 2%. On the whole, the company’s net profit basically meets our previous expectations, and the company’s revenue is higher than our previous expectations, which may be mainly because the revenue of futures warehouse receipt business exceeds our expectations, but this business mainly provides risk management services for customers, with very low profit making ability.
The brokerage business is expected to grow steadily and the transformation of the company’s wealth management is accelerating. In the fourth quarter of 2021, the stock based trading in the A-share market was active, with an average daily stock based trading volume of 1.21 trillion yuan in a single quarter, a year-on-year increase of + 39.38% and a month on month decrease of – 12.40%. We estimate that the market share of the company has increased slightly to about 6.9%, and the average commission rate is about 0.3 ‰. The company’s wealth management transformation has achieved initial results, and the proportion of the income from selling financial products on a commission basis in the brokerage service fee income has increased rapidly. According to the historical disclosure data of the company, 2020h2 has increased from 14.46% in 2020h1 to 21.23%, and 2021h1 has continued to increase by 1.37 percentage points to 22.59%. In addition, as the second batch of pilot securities companies approved for fund investment advisory business, the company’s fund investment advisory business performance has caught up from behind. According to the financial Associated Press, as of December 29, 2021, the company’s fund investment advisory business has been online for only 60 days, with nearly 90000 signed customers and more than 7 billion signed assets. Under the circumstances of the expansion of the scale of public funds and the pilot of industrial fund investment advisers, the transformation of the company’s wealth management is accelerating. Based on the market environment and the company’s situation, the annual revenue of our previous brokerage business in 2021 will reach 14.722 billion yuan.
The company’s investment banking business developed steadily, and the IPO underwriting amount increased by 143%. At the industry level, according to wind data statistics, in 2021, the cumulative equity financing scale was 1804.8 billion yuan, a year-on-year increase of 5%, the cumulative IPO Financing scale was 542.7 billion yuan, a year-on-year increase of 15%, and the total bond underwriting scale of the securities industry was 11.36 trillion yuan, a year-on-year increase of 5.65%. Citic Securities Company Limited(600030) the amount of equity underwriting was 353.698 billion yuan, ranking first in the industry, with a year-on-year increase of + 7.48%, of which the amount of IPO underwriting was 109.825 billion yuan, with a year-on-year increase of + 143.44%, and the market share of IPO underwriting was 20.24%, ranking first in the industry; The number of IPO underwriters was 69, with a year-on-year increase of + 46.81%. Compared with 2020, the number and scale of IPO underwriters of the company achieved significant growth. In terms of bond underwriting, the company’s bond underwriting amount was 1561.352 billion yuan, a year-on-year increase of + 19.96%, and the industry market share was 13.74%, ranking first in the industry; 3316 bonds were underwritten, a year-on-year increase of – 24.36%. The company’s IPO underwriting amount in 2021 increased significantly compared with that in 2020, and the bond underwriting amount developed steadily. It is expected that the company’s net investment banking fee income will increase by more than 20% in 2021.
All businesses have developed in a balanced manner, and the growth rate of capital intermediary, asset management and brokerage is expected to be among the top. It is estimated that the top three businesses of the company’s year-on-year growth in 2021 are capital intermediary business, asset management business and brokerage business. It is expected that the revenue of the company’s capital intermediary business will increase significantly year-on-year. Since 2021, the market financing balance has been rising at a high level. At the end of 2021, the market financing balance was 1712.05 billion yuan, an increase of 5.75% over the end of 2020. In the first three quarters of 2021, the company’s net interest income is + 139.60% year-on-year, and the market share of the company’s financing balance is expected to stabilize at about 7.58%. It is estimated that the interest income of the company’s two financing business will increase significantly in 2021. Based on the active market trading environment, it is expected that the company’s interest income from interbank deposits will grow steadily in 2021. Maintain the company’s annual net interest income of about 5.5 billion yuan in 2021.
Investment suggestion: all businesses of the company are in a leading position in the market, and the transformation of the company’s asset management, self support and wealth management has a leading advantage in the transformation of the industry. The company holds 62.20% equity of Huaxia Fund and is expected to continue to enjoy the development dividend of public fund. In 2022, under the favorable reform policies such as the reform of the whole market registration system and the planned Trial Implementation of the market maker system on the science and innovation board, the company, as a leading brokerage, is expected to become a major beneficiary of the industry. With the policy support of building an aircraft carrier class head brokerage, and with the company’s strong capital strength and leading business ability, we continue to be optimistic about the steady growth of the company’s future performance. Recently, the company’s share allotment has been approved by the CSRC, and the company’s share allotment application is progressing steadily. If the company’s share allotment is implemented as planned, it will help the company further enhance its capital strength and improve the company’s risk supervision indicators, as well as the development of the company’s heavy asset business, asset management business and scientific and technological empowerment. We basically maintained the previous profit forecast of the company, fine tuned the corresponding business income according to the market data, and maintained the “recommended” rating of the company. Under the assumption that the company will implement the share allotment as planned in 2022, it is estimated that the operating revenue in 2021 / 2022 / 2023 will be 76.587/76.082/84.188 billion yuan (originally 71.655/74.557/82.115 billion yuan), and the net profit attributable to the owners of the parent company will be 23.215/24933/27764 billion yuan (originally 232.49/249.34/27780 billion yuan), with the corresponding growth rate of + 55.79% / + 7.04% / + 11.35% respectively, Based on the latest capital stock of 12.927 billion shares, EPS in 2021 / 2022 / 2023 is 1.80/1.93/2.15 yuan / share respectively, and BPs in 2021 / 2022 / 2023 is 16.17/18.08/18.77 yuan / share respectively. According to the company’s own historical valuation, the median historical Pb (LF) is 2 times. Considering the firm leading position and stable performance of the company, we think it is reasonable to give the company 1.6-1.9 times Pb in 2022, and the corresponding reasonable range of stock price is 28.93-34.35 yuan, maintaining the company’s “recommendation” rating.
Risk warning: the decline of market trading activity has dragged down the brokerage business; Policy tightening led to the development of investment banking business less than expected; Intensified market fluctuations drag down asset management and proprietary investment business; The reform of capital market is not as expected; Stricter financial supervision; The progress of share allotment was less than expected.
