Main points of investment
Guoxin Securities released its three-quarter report in 2022, which showed that operating income and net profit in the first three quarters of 2022 were 133.04 and 4.762 billion yuan, respectively, which were-21.7% and-38.9% respectively compared with the same period last year. Among them, the operating income and net profit in the third quarter were 49.98 yuan and 1.555 billion yuan, respectively, which were-25.1% and-48.3% respectively compared with the same period last year. In the first three quarters, the weighted average return on equity fell 4.82pcts to 5.18 per cent year-on-year; excluding customer funds, operating leverage was + 3.8 to 3.16 times higher than at the beginning of the year.
Both fee-charging and capital business are under pressure. On the revenue side, the business income of fees and funds reached 57.96 and 5.523 billion yuan respectively in the first three quarters of 2022, which was-21.6% and-36.0% respectively compared with the same period last year.
On the cost side, the management fee is-16.2% to 5.701 billion yuan compared with the same period last year, the management expense rate is + 7.77 pcts to 50.1% compared with the same period last year, and the credit impairment loss is 393 million yuan, which is due to the increase in credit impairment loss of financing business and other creditor's rights investment.
Brokerage business is a drag on the overall performance of fee-based business. The income from brokerage, investment banking and asset management business in the first three quarters of 2022 was 39.71,13.52 and 230 million yuan respectively, which was-26.1%, + 0.2% and + 26.3% respectively compared with the same period last year. In terms of brokerage business, the market stock-based turnover in the first three quarters was-6.8% compared with the same period last year, and the decline in revenue was greater than the decline in turnover. It is expected that the company's transaction rates are still in a downward channel, and the amount of securities bought and sold by company agents is-21.0% to 53.142 billion yuan from the beginning of the year. The decline is significantly larger than the average of the target company and the industry. The company continues to strengthen online drainage. According to QuestMobile data, Guoxinjin Sun App has 5.4184 million monthly active users in September 2022, compared with September 2021 + 14.1%, ranking in the top three among securities firms' own platforms. The performance of investment banking revenue is stable. In terms of scale, the amount of IPO/ issuance completed in the first three quarters was 6.746 billion yuan, 34.6% of which was-3.6% of the same period last year; and the amount of bond underwriting was 179.019 billion yuan,-12.2% of the same period last year. Under the low base effect, the growth rate of asset management business reached 26.3%.
Credit leverage shrank and the trend of table expansion continued. In terms of capital business, the net interest income and investment income were 13.69 yuan and 4.154 billion yuan respectively,-17.8% and-40.3% respectively compared with the same period last year. In credit business, financing business shrank, stock business expanded slightly, financing, buying and selling financial assets were-15.8%, + 47.8% to 522.10 yuan and 10.005 billion yuan respectively compared with the beginning of the year; credit leverage as a whole showed a shrinking trend, compared with the beginning of the year-16.9%.
Investment income is larger than the decline in 2022H1 (- 21.5% year-on-year), and it is expected that fluctuations in the third quarter will increase the pressure on proprietary investment. Financial assets continued the trend of expansion, with a scale of + 19.6% to 226.1 billion yuan compared with the beginning of the year.
We believe that the company's long-standing ability of business innovation and a good customer base are expected to be better realized for performance growth driven by changes in corporate governance structure, and are optimistic about the long-term growth of the company's business.
The company is expected to achieve a net profit of 71.26 yuan and 8.658 billion yuan respectively from 2022 to 2023, with a closing price of-29.6% and + 21.5% respectively corresponding to 1.05 and 0.94 times PB on October 28, respectively, maintaining a "prudent overweight" rating.
Risk hints: the risk of large fluctuations in the capital market, the risk of decline in market trading scale, and the credit risk of stock pledge and bond investment.