Investment points: affected by the decline in the equity market, the company's brokerage business and proprietary business are under pressure. The scale of investment banking underwriting has increased, but revenue has declined. The performance of asset management income continues to be eye-catching, and the scale of active management has increased significantly. The reasonable value range is 13.11-14.42 yuan per share, maintaining the "better than the market" rating.
[event] Everbright Securities released its results for the first quarter of 2022: operating income of 2.18 billion yuan, year-on-year-34.4%, net profit of 670 million yuan, year-on-year-4.4%, corresponding to EPS 0.13 yuan, ROE1.11%. The decline in net profit in the first quarter was less than the decline in income, mainly due to the reversal of credit impairment. The company withdrew a credit impairment loss of 96 million yuan in the first quarter of 2021, while 160 million yuan in the current period.
The decline in brokerage business compared with the same period last year may be due to a decrease in revenue from consignment sales of financial products. The company's brokerage revenue in the first quarter of 2022 was 880 million yuan,-17.9% of the same period last year. We expect to be mainly due to the significant decline in revenue from consignment sales of financial products affected by the equity market and the continued decline in commission rates. In the first quarter of 2022, there was active trading in the whole market, with an average daily stock base trading volume of 1.076 trillion yuan, + 7.2% year-on-year, and a balance of 1.6728 trillion yuan, + 1.1% year-on-year, compared with the beginning of the year.
The scale of underwriting has increased, but investment banking revenue has declined. The company's investment banking revenue in the first quarter of 2022 was 320 million yuan,-45.5% compared with the same period last year. The underwriting scale of equity business is + 75.9% year-on-year, and that of bond business is + 27.8% year-on-year.
We believe that the difference between total underwriting and revenue growth is due to the decline in the scale of high-fee businesses such as IPO.
In the first quarter of 2022, the main underwriting scale of the company's equity was 8.3 billion yuan, ranking 10th, including 1 IPO, raising 1.8 billion yuan, and 4 refinancing, raising 6.6 billion yuan. The main underwriting scale of bonds was 83.7 billion yuan, ranking seventh; the underwriting scale of financial bonds, ABS and corporate bonds reached 13.9 billion yuan, 8.1 billion yuan and 10.9 billion yuan. There are 20 IPO reserve projects, ranking 20th, including 8 main boards of the two cities, 7 of the Beijing Stock Exchange, 2 of Science and Technology Innovation Board and 3 of the gem.
The performance of asset management continues to be eye-catching, and the scale of active management is improved. The company's asset management business income in the first quarter of 2022 was 326 million yuan, + 72.0% compared with the same period last year. Revenue in the fourth quarter of 2021 was 920 million yuan, a sharp + 137.2% over the same period last year, and the recent performance of the asset management business continues to be outstanding. By the end of 2021, the asset management scale of Everbright Securities was 374.7 billion yuan, + 60.4% compared with the same period last year, of which the active management scale was 338.6 billion yuan, + 94.3% compared with the same period last year.
Affected by market fluctuations, proprietary business suffered losses. The company made a net investment loss of 85 million yuan (including fair value) in the first quarter of 2021, compared with a loss of 149 million yuan in the same period last year. The performance of the equity market was lacklustre in the first quarter, with Wandequan A down 14%.
Investment suggestion: we expect the company's net profit per share from 2022 to 2024E to be 0.68,0.79 and 0.82 yuan respectively, and its net assets per share to be 13.11,13.79,14.57 yuan respectively. We give it 1.0-1.1xP/B in 2022, corresponding to a reasonable value range of 13.11-14.42 yuan, maintaining a "better than the market" rating.
Risk hint: the trading volume continues to decline, and the volatility of the equity market leads to a continuous decline in investment income.