CITIC Securities (600030) Half-yearly Report Review 2019: Revenue Improves MoM, Reduces Profits, High Cardinal Institution Impact Elasticity
Event: On 北京夜网 the evening of August 22, 2019, the company released the 2019 semi-annual report, and achieved operating income of 217 in the first half of 2019.
91 ‰, an increase of 9 in ten years.
00%; net profit attributable to mother is 64.
45 ppm, an increase of 15 in ten years.
As of the end of the first half of 2019, the company’s total assets were 7,238.
660,000 yuan, an increase of 10 over the end of last year.
83%; net assets attributable to mother 1560.
00 ppm, an increase of ten years.
In the first half of 2019, the company’s EPS was 0.
53 yuan / share, an increase of 15 in ten years.
33%; the expected ROE is 4.
09%, an increase of 0 over the same period last year.
Key points of investment: The revenue growth rate slightly expanded in the earlier quarter, but the performance 武汉夜网论坛 was not as good as the overall industry level: the company achieved operating income of 217 in the first half of 2019.
9.1 billion, an annual increase of 9.
00%, an increase from the first quarter (8.
(35%, year-on-year) has increased, mainly due to the second quarter’s net asset management revenue, index revenue and other business income increased (+5.
62% / 64.
73% / 487.
87%, QoQ), driving the second quarter’s operating income to grow 7% sequentially.
However, the company’s operating income growth rate is far below the overall industry level (41.
(37%, year-on-year), with the exception of asset management and other businesses, the growth rate of each business is lower than the industry average, especially in the brokerage and self-operating business, which is weak, mainly due to the high proportion of institutional business and a large number of stable investment styleAnd high cardinality.
The growth rate of net profit narrowed substantially, the net assets increased slightly, and the profitability was weak: the company achieved a net profit of 64 in the first half of 2019.
4.6 billion, an annual increase of 15.
82%, an increase from the first quarter (58.
(29%, year-on-year) The actual narrowing was mainly due to the increase in long-term operating expenses from the previous quarter, which resulted in an increase in net profit margin from the previous quarter.
88pct to 29.
58%, far below the industry’s 37.
The combination of other comprehensive income and undistributed profits increased slightly, and net assets improved slightly (1.
87%, YoY), the company’s annualized ROE in the first half of 2019 was only 4.
17%, lower than 6 in the industry.
Both the volume and price of the brokerage business fell, and the proportion of institutional clients declined slightly: we repeated the stock-based transaction volume based on the semi-annual report8.
Calculated at 2 trillion, the company’s share-based trading volume accounted for market restructuring5.
55%, 0 compared with the same period last year.
54 points, commission of gold million 4.
60, an average of 1 in tens of thousands compared with the previous year.
49. The fall in both volume and price caused the company’s brokerage business to perform weakly in the first half of the year, falling 7 times.
It is expected that this is mainly due to the high proportion of corporate institutional customers, although the agency account for securities transactions in the first half of 2019 decreased in the initial period.
29pct, but still maintained at 44.
The high level of 07%, and this year’s fast-growing market, retail trading activity is much higher than institutions, a higher proportion of institutions leads to poor flexibility of the brokerage business, but in the long run, performance stability is better.
The investment bank leader is still solid and the project reserves are abundant: In the first half of 2019, the company’s investment bank business leader was solid, and the main underwriting allocation scale was 1,228.
6.9 billion yuan (including private placement of assets), with a market share of 20.
13%, ranking first in the market; 4,528 underwriters of various types of credit debt.
6.9 billion yuan, market share4.
92%, ranking first in the industry.
According to wind statistics, as of August 22, 2019, the company’s main board reserve projects were 136, and the number of science and technology board services was 14, both ranking third in the industry, and the subsequent investment bank project reserves are abundant.
The growth rate of self-operated investment yield growth industry, the reduction of holdings in the second half of the year will increase investment income: the first half of 2019, mainly affected by a low base, the company’s self-operated business income growth rate (+40.
11%) is below the industry average (110.
02%), but from the perspective of investment capacity, the company’s self-invested return on investment (5.
95%) previous industry (4.
Taking into account the reduction of CITIC Construction Investment’s shares in the second half of the year, based on the current price, the equity value is 8 billion, taking into account the book cost of 2.7 billion US dollars, the estimated investment income is expected to be 54 billion yuan, which will increase revenue by about 15%.
Funds are the main source of income for big asset management, and asset management is still in a transition period: in the first half of 2019, the company realized asset management business income26.
6.6 billion, a decline of 8 per year.
41%, of which 19 realized fund income.
5 billion yuan, accounting for 73.
12%, a slight increase of 0 a year.
09%, income from other asset management business was 7.
17 trillion, an average of 25 percent in ten years.
55%, mainly due to the relatively high rate of collective fund management accounted for the initial period of 0.
88pct, the company’s asset management business is still in a transition period.
The scale of financing business has increased, and the cost of capital has advantages: in the first half of 2019, the company achieved net interest income13.
7.8 billion, an annual increase of 47.
38%, mainly due to the increase in the size of Liangrong and the stock pledge business, the financing funds increased by 0 in the first quarter.
71%, an increase of 12 earlier.
75%, buy-back financial assets increased by 5 compared with the first quarter.
69%, an increase of 56 earlier.
At the same time, from the perspective of interest rates, Liangronghe’s stock pledge rate has decreased from the previous year (-0.
98 / -1.
69pct), but because the company’s financing cost exceeds the industry, it can still exceed the stable spread and has a competitive advantage on the capital side.
The acquisition of the Wide Area Certificate is expected to share the reform dividends of Shenzhen and the Greater Bay Area, and employees’ incentives will help improve operating efficiency: If the company successfully acquires Guangzhou Securities, it will strengthen the company’s strength in southern China and share many policy dividends such as Shenzhen and the Guangdong-Hong Kong-Macao Greater Bay Area.
The company released the draft employee shareholding plan on March 4. If successfully implemented, it will help the company bind high-quality talents, stimulate the vitality and enthusiasm of employees, and the boots will promote the company’s improvement of operating efficiency and profitability.
Profit forecast and investment advice: Although subject to factors such as a low base, a high proportion of institutional business, and a number of robust investments, the company’s performance is not as good as the overall industry level, but the company’s leader is still difficult to shake, and the company’s performance in the long runThe stability is stronger, and under the guidance of many policies that support the advantages and disadvantages, the stronger the stronger, the Matthew effect of the industry is increasing.
Considering that the company’s holdings in the second half of the year are expected to increase US $ 50 billion in revenue, the acquisition of Guangzheng will share the reform dividends of Shenzhen and the Greater Bay Area, implement employee incentives to improve operating efficiency, and benefit from the leading brokerage firms in the financial supply-side structural reformFactors, we are optimistic about the company’s development, predicting that the company’s EPS for 2019 and 2020 will be 1.
05 yuan / share, 1.
20 yuan / share, corresponding to PE of 21.
86X; BVPS is 12.
93 yuan / share, 13.
10 yuan / share, corresponding to 1 PB.
73X, maintaining CITIC Securities’ “Buy” investment rating.
Risk factors: Breakthrough friction exceeds expectations, market fluctuations exceed expectations, and industry competition risks.