Zhongyuan Securities (601375): Investment Bank Outperforms Net Profit for Half a Year + 65%
Investment Highlights: Henan’s only legal person securities company, the A and H listing and financing capabilities have been enhanced, all lines have been comprehensively reformed, and a high dividend rate has been maintained.
Reasonable value range 5.
41 yuan, maintaining “Neutral” rating[Event]Zhongyuan Securities realized revenue of 1.3 billion US dollars in the first half of 2019, + 49% per year; net profit attributable to mothers was 200 million US dollars, more than + 65%; corresponding to EPS0.
In the second quarter, the operating income was 6 ‰, ten years + 52%; the net profit attributable to mothers was 1 ‰, ten years + 32%.
Net profit has been increasing mainly due to the substantial increase in investment bank business net income and investment income, including fair value.
In the first half of 2019, brokerage / underwriting / asset management / quotation / investment income accounted for 23% / 7% / 3% / 5% / 39% of operating income, respectively.
Brokerage business services are optimized, and revenues increase every year.
Realize brokerage income of 30,000 yuan, + 36% per year.
The company follows the development trend of the industry, and continues to promote the transformation and reform of the brokerage business to wealth management from the aspects of appropriate customer service, preliminary service standardization, and service branding.
The company continuously optimizes the “Fortune Central Plains” customer classification and classification service system to increase customer satisfaction and awareness of the company’s products and service brands.
The investment banking business grew rapidly, and the scale of underwriting of stock bonds increased significantly.
Realized underwriting income of 10,000 yuan, + 182% for the whole year.
The share and debt underwriting scales are + 858% and + 442% each year, respectively.
The underwriting scale of the equity is 19 trillion; 3 refinancing companies have an underwriting scale of 19 trillion.
The main underwriting scale of bonds was 4.3 billion; the underwriting scale of corporate bonds and corporate bonds reached 3 billion and 1.3 billion, respectively.
There are 19 IPO reserve projects, ranking 30th, of which there are 3 main boards, 3 GEM boards, and 1 science and technology board.
Pioneer asset management new regulations require that the scale and proportion of collective asset management increase.
In the first half of 2019, asset management income was zero.
$ 4.1 billion, -23% a year.
The company’s strict new regulations on budget asset management required active adjustments to its business layout. As of the end of June 19, the scale of entrusted asset management was US $ 9.7 billion, of which US $ 5.9 billion was pooled asset management, + 15% from the end of the previous year; US $ 3 billion was targeted asset management, Compared to the end of last year -42%; special asset management 70,000 yuan, compared to the end of last year-23%.
The investment capacity has been improved, and the level of self-operated investment has been greatly improved.
The company achieved net investment income (including fair value) of 500 million US dollars in the first half of the year, + 211% per year.
The company’s proprietary trading business lines have been reformed through investment processes, organizational structures, and performance assessments to improve their active investment capabilities, adhere to sound operating strategies, and refine liquidity management to better achieve half-year returns, bond market returns, and income levelsSignificantly improved.
[Investment recommendation]We expect the company’s annual net profit for 2019-2021E to be 0.
10 yuan, net assets are 2 respectively.
Considering that the company has always adhered to a high dividend rate, the average proportion of cash dividends in the past three years accounted for more than 58% of the net profit attributable to the parent.
The long-term and stable high dividends are conducive to increasing the enthusiasm of investors for allocation, and at the 佛山桑拿网 same time it shows the confidence of the industry in the improvement of the company’s future performance.
In addition, A + H is listed, with strong financing capabilities, and capital consumption businesses are expected to accelerate growth.
We give it slightly higher than the industry’s estimate, giving it 2 in 2019.
4 times P / B, corresponding to a reasonable value range of 5.34-6.
41 yuan, maintain “Neutral” rating.
Risk Warning: The continued downturn in the market will lead to the expansion of business scale and further strengthening of market supervision.