Event: Zheshang Securities announced its 2022 annual report that the company realized revenue of 16.814 billion yuan, year-on-year + 2.41%, and homed net profit of 1.654 billion yuan,-24.66% year-on-year. The average weighted ROE6.58%, decreased by 3.32% year-on-year, and basic earnings per share was 0.43 yuan, which was-25.86%.
Comments:
The investment business is under pressure, dragging down full-year results. The decline in the company's parent net profit was due to the impact of the capital market, with proprietary business income of 685 million yuan, down 62.79% from 1.841 billion yuan in the same period last year. The proprietary size was 45.82 billion yuan, down 1.3% from the same period last year, of which trading financial assets were 43.998 billion yuan, down 3.95% from the same period last year. The final balance of asset management products of bonds / public funds / stocks / brokerages was 330.62 trillion yuan, respectively, which was 20.43 billion yuan. Compared with the same period last year, it was-5.9%, 51.3%, 40.6%, 24.5%.
Investment banking business is dragged down by the market and is on a recovery trend in the second half of the year. Investment banking revenue reached 779 million yuan, down 28% from the same period last year. The amount of IPO underwritten is 3.196 billion yuan, which is + 5.0% compared with the same period last year. The amount of refinancing underwriting was 5.523 billion yuan,-33.0% over the previous year, and the amount of bond underwriting was 81.145 billion yuan, a decrease of 35.7% over the previous year. Compared with the investment banking performance of 22H1JH 2 company, the performance of investment banking has obviously picked up. In the second half of the year, the company completed the main underwriting of all four IPO orders for the whole year, achieving investment banking income of 516 million yuan, + 96.2% compared with the first half of the year. The company will continue to implement the development strategy of "deep ploughing + focus" and continue to take the Phoenix Plan in Zhejiang Province as an opportunity to enhance the scale of investment banking business and move forward to the first echelon investment bank.
The market share of brokerage business is flat, while the market share of financial and financial services is on the rise. The company achieved brokerage fee income of 1.869 billion yuan,-10.34% year-on-year, the company's annual stock base transaction volume of 4.649505 trillion yuan, year-on-year-10.47%, market share is basically the same as the previous year. At the same time, the balance of the two financing companies reached 17.171 billion yuan by the end of December 2022, down 10.03% from the end of 2021, and the share increased to 1.075%.
Fund consignment is impacted by the market, and the high proportion of private equity consignment empowers the development. In 2022, the business income of consignment sales of financial products in the company's brokerage business was 303 million yuan,-36.47% of the same period last year. We expect that the rate of consignment sales of financial products has dropped from 0.55% to 0.36%. The amount of financial products held at the end of 22 was 41.2 billion yuan, compared with 44.5 billion yuan-7.4% at the end of 2021. Considering that the association disclosed that the amount of non-goods-based public offering is 13 billion yuan, we estimate that the amount of private placement that the company focuses on is 28.2 billion yuan, accounting for 68.4%. In the face of market adjustment, the company has changed its business thinking in a timely manner, from product sales model to asset allocation model, and to a new wealth management model that focuses on customer demand and pays attention to product portfolio allocation. As the company continues to build a high-quality investment team, strong ability to control customer assets, and has a professional financial product selection system, customer investment experience and management customer asset scale growth to achieve a virtuous circle. With the gathering of high net worth people in Zhejiang Province, the company has geographical and professional advantages in the field of private equity fund consignment, and the company's profitability is expected to continue to improve with the growth of private equity funds.
The scale of asset management continues to be reduced, and the proportion of active management continues to increase. As the 2022 "number one project", the annual income of the asset management business was 435 million yuan, + 10.3% compared with the same period last year, and the scale of asset management continued to drop to 91.717 billion yuan, of which 89.226 billion yuan was actively managed, accounting for 97.28%, which continued to increase 16.44pct compared with the end of 2021. Asset management business actively tap market opportunities and strengthen active management capabilities. The company insists on taking investment and research construction as the core, building brands, strong services and scale, actively creating star products with market competitiveness, and strengthening the development orientation of "creating industry first-class asset management companies with rights and interests characteristics". Strive to become an industry wealth product provider with complete product lines and distinctive competitive advantages.
The futures business has developed steadily. By the end of December 2022, the customer rights and interests were 31.989 billion yuan, an increase of 58.02% over the same period last year. The transaction value was 12.39 trillion yuan, down 8.6% from the same period last year. The market share of the transaction value was 1.16%, a decrease of 0.01pct compared with the end of last year.
Profit forecast and investment rating: Zhejiang is economically developed, listed companies and high net worth people are rich in resources, the company's investment banking and wealth management business has good location support, and the wealth management advantage of private placement is expected to be further highlighted. Corporate profitability is expected to achieve a qualitative leap with the improvement of wealth management business income contribution. In addition, the recovery of the market economy is expected to greatly improve the company's proprietary investment income, and the company's performance is expected to achieve a strong recovery from 23 years. We estimate that the 2023-2025E homing net profit will be 2.962 billion RMB 27.26 2025EPE respectively, corresponding to 15.39x/14.47x/13.52x for 2023-2005e, maintaining the "buy" rating.
Risk factors: the fluctuation of the securities market leads to the fluctuation of the profit of the proprietary business; the market recovery is not as expected; the effect of the transformation of wealth management model is not as expected.