The comprehensive strength of Caida Securities is about 50 in the securities industry. As the only securities firm in Hebei Province, Caida Securities has formed a certain location advantage. By the end of 2021, there are 102 branches on the channel side and deep docking with high-quality assets in the province on the resource side. Looking to the future, Caida Securities has a deep layout of the sinking market with channel advantages, and improves the province's high-quality asset service chain with the advantage of resources, which is expected to create a unique industry competitiveness for a long time.

Rank in the middle reaches of the industry and build competitiveness with the in-depth layout of the regional market. In terms of total assets, net assets and revenue indicators, the overall performance of the company ranked between 47 and 53 in the industry in the past three years, ranking in the middle of the industry. Location advantage is an important feature of Caida Securities. As the only securities firm in Hebei Province, Caida Securities has 102 branches on the channel side by the end of 2021, and has achieved deep docking with high-quality assets in the province on the resource side. Looking to the future, Caida Securities has a deep layout of the sinking market with channel advantages, and improves the province's high-quality asset service chain with the advantage of resources, which is expected to create a unique industry competitiveness for a long time. At the profit level, the ROE of Caida Securities from 2019 to 2021 was 7.11%, 6.05% and 6.78% respectively, basically in line with the industry average.

Brokerage business: the regional characteristics are remarkable, and the transformation of wealth management is advancing steadily. From 2017 to 2021, the proportion of income from Caida securities brokerage business remained at about 35%. In 2021, Caida Securities agents buying and selling securities business (including seat leasing of trading units) achieved a net income of 715 million yuan, an increase of 0.45% over the same period last year, ranking 41st in the industry, better than the company's overall ranking. At the level of regional structure, relying on the perfect channel layout formed by 102 branches in the province, Hebei Province contributed 90.6% of the securities brokerage business income in 2021. In terms of wealth management, Caida Securities achieved 12.94 million yuan in revenue from consignment sales of financial products in 2021, an increase of 85.39% over the same period last year, and continued to maintain a momentum of rapid growth.

Asset-heavy business: an important beta factor for performance changes. In 2021, the revenue of the securities proprietary business reached 489 million yuan, an increase of 70.16% over the same period last year, and the CAGR reached 31% in the past three years, which has become the core driving force of the company's revenue growth. In 2021, Caida Securities will continue to enhance the comprehensive strength of investment and research and improve the "FICE" strategic layout of fixed income, commodity futures and equity investment business. On the risk side, with the expansion of the fixed income and futures business, the risk exposure has expanded. At the end of 2021, the VaR of Caida Securities was 21 million yuan, accounting for 0.19% of the net capital, and the risk was relatively controllable.

Investment bank: debt financing as the core, actively promote the in-depth layout of the regional market. Bond financing is the core source of income for investment banking business. In 2021, the underwriting scale of Caida Securities credit debt was 32.233 billion yuan, an increase of 22.54% over the same period last year. In addition to credit bonds, Caida Securities actively participates in the issuance of local bonds, realizing the deep layout of the regional financial market. In 2021, Caida Securities underwrote 21 local bonds in Hebei Province, with a cumulative winning bid amount of 1.598 billion yuan. In terms of equity financing, in 2021, Caida Securities established the selection of the new third board as the focus, and the Shanghai and Shenzhen Stock Exchange project cultivation as the future development strategy. In 2021, Caida Securities completed the first order selection layer and the Beijing Stock Exchange market sponsor project.

Risk factors: a-share turnover has dropped sharply; the company's credit business risk has been exposed; the company's investment business has lost money; the company has lifted the ban on restricted shares; market share decline risk.

Investment suggestion: with the reform of the capital market and the business innovation of the securities industry, the market share of the securities industry is expected to concentrate to the head, which may adversely affect the valuation of small and medium-sized securities firms. At the same time, the fluctuation of the stock market will inevitably bring the beta effect, which will make the valuation of securities firms fluctuate greatly. In the short term, benefiting from the liquidity premium, Caida Securities is expected to maintain a high valuation and its trend will keep pace with the market. In the long run, with the gradual lifting of the ban on restricted shares, the valuation of Caida Securities is expected to be closer to the industry average.