Main points of investment: the company is characterized by fixed income and is a scarce target in the existing listed securities firms.
Committed to building a fixed income characteristics, asset management business as the core securities companies.
The reasonable value range is 5.64-6.02 yuan, maintaining the "better than the market" rating.
[event] the first Entrepreneurship achieved operating income of 1.33 billion yuan in the first half of 2022,-9.1% year-on-year, and net profit of 290 million yuan, 18.3% compared with the same period last year, corresponding to 0.07 yuan of EPS and 2.0% of ROE. In the first half of 22, brokers / investment banks / asset management / interest / proprietorship accounted for 15% / 10% / 38% / 7% / 13% of operating income respectively. In the second quarter, the operating income was 800 million yuan,-27.4% compared with the same period last year, and + 49.9% compared with the previous quarter. The net profit is 220 million yuan,-36.3% compared with the same period last year, and + 200% compared with the previous year. The decline in the company's first-half net profit from the same period last year was mainly due to a drop of 5.7% in revenue from brokerage and 61.7% in proprietary business.
Continue to promote the transformation and development of brokerage business and actively carry out team building. In the first half of 2022, the brokerage business income reached 200 million yuan,-5.7% compared with the same period last year. In the first half of 2022, the company continued to promote the transformation to wealth management, completed the adjustment of the organizational structure of brokerage business headquarters, carried out efficient management and business empowerment of branches, enhanced customer experience, and strengthened the introduction of customer assets. The company's income from consignment sales of financial products was 8.11 million yuan,-33.9% of the same period last year, accounting for 4.15% of the brokerage business income. The sales volume of financial products was 4.605 billion yuan, + 3.62% compared with the same period last year, of which the sales scale of fixed income products was 3.758 billion yuan, an increase of 79.89% over the same period last year. 3) the balance of the company is 6.4 billion yuan,-12.8% compared with the beginning of the year, with a market share of 0.40%.
Consolidate the foundation of traditional investment banking business and expand innovative business. Investment banking revenue in 2022 was 140 million yuan, a year-on-year increase of 7.6%. The underwriting scale of equity business is + 257.8% compared with the same period last year, and the underwriting scale of bond business is + 36.9% year on year. The main underwriting scale of equity is 6.11 billion yuan, ranking 22nd; among them, IPO 1, raising 500 million yuan; refinancing 3, underwriting 5.6 billion yuan. The main underwriting scale of bonds is 5.4 billion yuan, ranking 61st, of which corporate bonds and ABS are 4.1 billion yuan and 1.3 billion yuan respectively. There are 3 IPO reserve projects, ranking 34th, including 2 Science and Technology Innovation Board and 1 gem. The company's investment bank continues to consolidate the foundation of traditional investment banking business such as equity financing, debt financing and M & A, while actively expanding innovative businesses such as green debt and rural revitalization debt to provide clients with comprehensive financial services.
The fixed income characteristic is obvious, obtains the market leading position. In the field of fixed income business, the company has a brand advantage and has formed a sales and trading model that is quite unique and suitable for the development of medium-sized securities firms. 1) fixed income sales: while maintaining high market coverage in such aspects as treasury bonds, policy bank financial bonds, and non-financial corporate debt financing instruments, we continue to develop new types of business. Sales of fixed-income products totaled 91.268 billion yuan, down 32.13% from the same period last year. 2) fixed-income trading: the trading activity of the company further increased, and the bond trading volume in the inter-bank and exchange market was 2.61 trillion yuan, an increase of 42.04% over the same period last year.
Strengthen product creation, enhance proactive management capabilities, and create ESG and FOF investment first-mover advantages. The company continues to improve active management capabilities and product creation capabilities, enrich investment varieties and product lines with customers as the center, create ESG and FOF investment first-mover advantages and ABS business characteristics, lay out public REITs business, and consolidate investment research and risk management capabilities. As of June 30, 2022, the total entrusted management funds for the company's asset management business was 56.621 billion yuan, a decrease of 1.832 billion yuan, or 3.13%, compared with the end of 2021.
[investment suggestion] We estimate that the 2022E-2024E net profit of the company is 621 million yuan, 710 million yuan and 772 million yuan respectively, which is-17%, 14% and 9% respectively compared with the same period last year. The net profit per share is 0.15 pound 0.17 pound 0.18 yuan, and the net asset per share is 3.76 million 4.07 yuan 4.25 yuan respectively. We give it 1.5-1.6 x 2022E PB (taking into account the fact that the company is characterized by fixed income, which is a scarce target among the existing listed securities firms, and the asset management actively manages the product yield at the top, and gives an appropriate valuation premium), the corresponding reasonable value range is 5.64-6.02 yuan, downgrading to "neutral" rating.
Risk hint: the continued downturn in the market leads to a decline in the scale of business, and market supervision is further strengthened.