\u3000\u3000 Orient Securities Company Limited(600958) (600958)
The high performance growth was in line with expectations. The allotment helped the development of retail and investment banking business and maintained the “buy” rating
The company disclosed the performance forecast. It is estimated that the net profit attributable to the parent company in 2021 will be 5.038 to 5.582 billion yuan, with a year-on-year increase of + 85% to + 105%. We expect the net profit attributable to the parent company in 2021 to be 5.43 billion yuan, and the performance is in line with our expectations. It is expected that the business of public fund-raising management and wealth management increased significantly year-on-year, and the provision for credit impairment decreased significantly year-on-year, driving the high growth of performance. Maintain the forecast of the company’s net profit attributable to the parent company from 2021 to 2023 of RMB 5.43/68.0/8.14 billion, corresponding to EPS of RMB 0.78/0.97/1.16. We expect the profit contribution of the company’s large wealth management line (its public funds + consignment) to reach 50% in 2021, which is significantly higher than the industry average; The company’s wealth management transformation is leading, the performance growth of the big wealth management line can be expected, and the allotment financing is mainly invested in retail and investment banking, which is conducive to the improvement of the company’s long-term roe. The current stock price corresponds to 17.2 times P / E and 1.4 times P / B in 2021. After deducting the net assets of non large wealth management business lines, the current market value of the company corresponds to 12 times P / E of the net profit of large wealth management lines in 2022. The valuation has a margin of safety and maintains the “buy” rating.
It is estimated that the net profit of big wealth management line will be + 41% and the profit contribution will reach 50% in 2021
(1) the company’s wealth management and public fund-raising management business has obvious first mover advantages, and fully benefits from the expansion of wealth management market space. We expect the net profit of the company’s large wealth management business line (consignment + its holding and participating public funds) to reach 2.7 billion in 2021, with a year-on-year increase of + 41% and a profit contribution of 50%; According to wind data, by the end of 2021, Orient Securities Company Limited(600958) asset management and huitianfu’s non commodity fund had reached 256.7/611.2 billion, an increase of + 37% / + 11% compared with the end of 2020. The growth of huitianfu’s holding scale was lower than expected; In November 2021, the company’s fund investment advisory business pilot set sail, which is expected to become a new starting point for the transformation and upgrading of wealth management. (2) According to wind data, the company completed 10 IPOs in 2021, with an underwriting revenue of 560 million, a year-on-year increase of + 30%.
Allotment financing is mainly invested in retail and investment banking, which is conducive to improving the long-term roe
The company plans to issue shares to raise no more than 16.8 billion yuan. At present, the first feedback has been completed. The share allotment fund-raising was used for investment banking and wealth management business of 6 billion each, accounting for 71% in total. The refinancing of the company focuses on two potential businesses: retail and investment banking, which is conducive to improving the growth rate of handling fee income and the long-term roe of the company.
Risk warning: market fluctuation risk; The scale expansion of the company’s public fund business was less than expected
