Event description:
In the first three quarters of 2022, the company achieved operating income of 11.584 billion yuan,-4.09% year-on-year; net profit of 1.156 billion yuan,-27.20% year-on-year; weighted average ROE 4.65%, reducing 2.67pct. In the third quarter, the operating income was 4.121 billion yuan,-16.75% compared with the same period last year, and the net profit was 429 million yuan,-39.60% compared with the same period last year.
Main points of investment:
Wealth management improved month-on-month, and proprietary investment was a drag on performance. In the first three quarters of 2022, the company's asset management increased by 35.19% compared with the same period last year, achieving revenue of 335 million yuan; brokerage and investment banking revenue fell by 7.30% and 39.34%, while investment business income fell by 54.77% to 668 million yuan. Q3 brokerage / investment banking / asset management / interest / proprietary income is 4.85, 2.58, 1.13, respectively, 297 million yuan, compared with the same period last year,-25.86%, 3.42%, 17.20%, 32.16% /-55.21%, respectively.
The brokerage business has regional advantages, and the scale of asset management has increased steadily. The company focuses on the dual core of products and customers, gives full play to the advantages of sales channels and location, and actively introduces transactional high net worth customers and institutional customers.
The active management of asset management business accounts for a relatively high proportion. As of 2022H, the active management scale of Zhejiang businessmen is 90.942 billion yuan, accounting for 86.85% of the total scale, an increase of about 16.57% over the same period last year. The scale of assets has risen steadily. As of October 31, 2022, Zhejiang Merchants Capital Management publicly raised AUM509.20 billion yuan, + 13% compared with the beginning of the year. Zhe Shang Fund, an equity fund company, publicly raised AUM241.79 billion yuan, + 17.68% more than at the beginning of the year.
Investment banking and investment performance are under pressure. Investment bank revenue is-39.34% year-on-year. As of October 31, 2022, the company's equity financing volume was 7.57 billion yuan, ranking 28th, compared with last year's + 1st place. There are 9 IPO projects under review, ranking 23rd in the industry, including 7 Zhejiang enterprises. The investment business fell by 54.77% compared with the same period last year. The investment income of 2022Q3 increased by 1.02% compared with the same period last year.
Buybacks boost market confidence. The company announced in October 2022 that it intends to buy back 19 million-39 million shares at a price of no more than 15.61 yuan per share, accounting for 0.5% of the total share capital, accounting for 0.5% of the total share capital, with a total of no more than 605 million yuan, for equity incentives.
Earnings forecasts, valuation analysis and investment advice:
The company's market-oriented mechanism is well built, wealth management, institutional business location advantages are significant, the buyback plan shows that the management is optimistic about the company's prospects in the medium and long term. From 2022 to 2024, the company is expected to achieve operating income of 15.442 billion yuan, 16.772 billion yuan and 19.222 billion yuan, respectively, an increase of-5.95%, 8.61% and 14.61%, respectively, and a net profit of 1.829 billion yuan, 2.098 billion yuan and 2.454 billion yuan, with an increase of-16.68%, 14.67% and 16.98% respectively.
Risk Tips:
The financial market fluctuated sharply, the business advance was not as expected, and the company had greater risk events.