Key investment points: Affected by the decline in the equity market, the company's brokerage business is under pressure. However, the scale of equity underwriting in the company's investment banking business has increased, and the scale of active asset management has increased. The reasonable value range is 17.33-18.77 yuan/share, maintaining the “superior market” rating.
[Event] Everbright Securities released its 2022 annual report: for the full year of 2022, the company achieved operating income of 10.78 billion yuan, or -35.5% year on year; net profit of the mother was 3.19 billion yuan, -8.5% year on year; corresponding to EPS of 0.61 yuan, ROE of 5.3%. Brokers, investment banks, asset management, interest and proprietary income accounted for 31%/12%/14%/19%/10% respectively. The fourth quarter achieved operating income of 1.86 billion yuan, -57.8% year on year, -48% month on month; Guimu's net loss was 220 million yuan, 195.5% year on year, -116.7% month on month; the company's losses in the fourth quarter were mainly due to changes in the fair value of financial assets.
Brokerage revenue declined year over year, and wealth management transformation accelerated. The company's brokerage revenue for the full year of 2022 was 3.30 billion yuan, -24.2% year on year, accounting for 30.6% of operating income. The company achieved brokerage revenue of 680 million yuan in the fourth quarter, -32.5% year on year and -26.1% month on month. The company's revenue from selling financial products on behalf of 377 million yuan was -33.4% year-on-year, accounting for 11.44% of brokerage revenue. The balance of the company's two loans was 34.1 billion yuan, -24.2% compared to the beginning of the year. In 2022, the average daily stock base transaction volume of the entire market was 103 billion yuan, -9.3% year on year, and the balance of the two loans in the entire market was 15404 billion yuan, up -16% from the beginning of the year. The company's retail business accelerated the transformation of wealth management, and the total number of customers and product holdings achieved effective growth.
The scale of equity underwriting increased year-on-year, and investment banks' revenue increased month-on-month in the fourth quarter. In 2022, the company achieved investment banking revenue of 1.28 billion yuan, -27.7% year on year. In the fourth quarter, the company achieved investment banking revenue of 260 million yuan, -19.7% year on year and +17.9% month on month.
The underwriting scale of the equity business in 2022 was +12.9% compared to the same period last year, and the underwriting scale of the bond business was -1.9% year on year. Shareholders' underwriting scale was 20.50 billion yuan, ranking 15th; of these, 7 IPOs raised 101 billion yuan; 10 were refinanced, with an underwriting scale of 10.4 billion yuan. The underwriting scale of bonds was 352.6 billion yuan, ranking 6th; among them, the underwriting scale of local government bonds, financial bonds, and ABS was 162.4 billion yuan, 52.5 billion yuan, and 45.7 billion yuan respectively. There are 12 IPO reserve projects, ranking 18th, including 7 on the main board of the two markets, 1 on the Beijing Stock Exchange, and 4 on the GEM market. The company focuses on serving strategic emerging industries, deeply cultivating key regions, and actively expanding “specialized, special and new” enterprises. Investment banks have made breakthroughs in key large and medium-sized projects, and the scale of equity underwriting has grown.
The asset management business insists on being customer-centered and actively managing and scaling up. In 2022, the company achieved revenue from asset management business of 1.51 billion yuan, -5.6% year on year. The company achieved asset management revenue of 280 million yuan in the fourth quarter, -69.5% year on year. The company's asset management scale was 365.4 billion yuan, -2.5% year on year, of which active management was 35.4 billion yuan, +3.5% year on year, and active management accounted for 96%. The company focuses on customer needs, strengthens investment and research capacity building and product management work, and continuously consolidates active management capabilities. Private equity asset management ranked 4th in the average monthly scale of private equity asset management in the fourth quarter of 2022.
Self-operated fixed income is rich in long-term allocation strategies, and the scale continues to increase. In 2022, the company achieved investment income (including fair value) of 1.10 billion yuan (including fair value) of -23.8% year-on-year; investment income (including fair value) in the fourth quarter was 0.7 billion yuan, -92.9% year-on-year. The company's proprietary equity investment business constructs multi-strategy investment portfolios to effectively control risk exposure. The fixed income proprietary investment business is rich in long-term allocation strategies, and the scale continues to increase.
Investment advice: We expect the company's net profit per share for 2023-2025E to be 0.74, 0.87 and 1.02 yuan respectively, and net assets per share to be 14.44, 15.29 and 16.30 yuan respectively. We gave it 1.2-1.3Xp/B in 2023, corresponding to a reasonable value range of 17.33-18.77 yuan, maintaining the “superior market” rating.
Risk warning: Trading volume continues to decline, and investment returns continue to decline due to increased volatility in the equity market.