Huachuang Yangan is a shareholding platform integrating industrial research, scientific and technological development, investment and financing. The company's business involves securities, plastic pipe profiles and other fields, in which Huachuang Securities, a wholly-owned subsidiary, is the company's core asset, and plastic pipe profile business accounts for a relatively low proportion of the company's overall revenue. The company's ownership structure is relatively scattered, there are no controlling shareholders and actual controllers, the largest shareholder is New Hope Chemical Investment Co., Ltd. The company has established a more flexible system and mechanism, and has completed three periods of employee stock ownership plans since 2019, which can fully mobilize the enthusiasm and creativity of employees and promote the sustained and healthy development of the company.

Huachuang Securities is a comprehensive medium-sized securities firm based in Guizhou. At present, Huachuang Securities is a subsidiary of Huachuangyang Safety Capital, which contributes more than 99% to the operating income and profits of listed companies. Huachuang Securities takes Guizhou as its base and service center. By the end of 2020, the company's business department in Guizhou Province accounted for 63%, and its market share in Guizhou Province exceeded 50%. At the same time, in recent years, the company's products and services continue to extend, and the service model gradually covers Yunnan, Sichuan and other places, forming a more obvious regional competitive advantage in the field of retail business. Huachuang Securities has a relatively perfect business license. in recent years, the company has actively promoted the transformation of various businesses and gradually built up a unique competitive advantage. it has formed remarkable business characteristics in research and institutional business, consignment business, asset management business, bond self-investment business and so on. Huachuang Securities is of medium size and has achieved steady growth in its size and operating performance since 2018, with steady progress in the main indicators industry ranking, especially in operating income and net profit industry rankings. at present, the main business indicators are at the upper-median level of the industry.

The scale of the company's assets continues to expand and its operating performance is growing steadily. Since the acquisition of Huachuang Securities in 2016, the scale of Huachuang Yangan assets has continued to expand in recent years, and both total assets and net assets have increased year by year. By the end of the third quarter of 2021, the company's total assets were 53.37 billion yuan, an increase of 39.02% compared with the end of 2017. Net assets were 15.875 billion yuan, an increase of 6.48% over the end of 2017. In recent years, the company's operating performance has grown steadily, and the scale of operating income and net profit has increased year by year. In the first three quarters of 2021, Huachuang Yangan realized operating income of 2.465 billion yuan, an increase of 8.00% over the same period last year, and a net profit of 526 million yuan, an increase of 15.00% over the same period last year.

Profit forecast and valuation: the operating income of Huachuang Yangan in 2021 / 2022 / 2023 is expected to be 3.429 billion yuan / 3.556 billion yuan / 3.824 billion yuan respectively, with a year-on-year growth rate of + 9.38%, 3.70% and 7.54%, respectively. It is estimated that the net profit of 2021 / 2022 / 2023 will be 976 million yuan / 1.014 billion yuan / 1.095 billion yuan respectively, with a year-on-year growth rate of + 48.33% "3.89%" 7.99%. At present, the valuation level of Huachuang Yang'an is relatively low. As of February 21, 2022, the company was valued at 1.06x PB (LF), which is far lower than the current average valuation of the brokerage plate PB (LF). Compared with the historical valuation center of the company in the past five years, PB (LF) is also significantly lower, from the valuation point of view the company has a higher margin of safety.

Risk tips: a large adjustment in the A-share market; the company's 1.5 billion receivables to Beijing Jiayu can not be recovered; the company's stock pledge business has a large area of default; bond proprietary investment; the deterioration of building materials business is a drag on the performance of listed companies; the company's securities business and building materials business failed to coordinate development.