Key investment points: The company's self-operated performance in the first quarter of 2023 turned a loss into a profit, with net profit of +44% compared to the previous year. The company's capital-light business lays a solid foundation, optimizes the layout of its capital-heavy business, and continuously enhances its ability to provide financial services to the real economy. The target price is 18.77 yuan/share, maintaining the “better than the market” rating.
[Event] Everbright Securities released the first quarter report of 2023: achieved operating income of 2.75 billion yuan, +26.1% year on year; net profit of the mother was 960 million yuan, +43.8% year on year; corresponding to EPS of 0.19 yuan and ROE of 1.6%. Brokers, investment banks, asset management, interest and proprietary income accounted for 27%/7%/8%/15%/34% respectively. The positive increase in the company's net profit in the first quarter of 2023 was mainly due to the recovery in the equity market, and investment income (including fair value) turned a loss into a profit.
Strengthen the construction of a wealth management customer service ecosystem, and accelerate the transformation of wealth management. In the first quarter of 2023, the company's brokerage revenue was 740 million yuan, -16.1% year on year, accounting for 26.8% of operating income. In the first quarter of 2023, the average daily stock trading volume of the entire market was 963.3 billion yuan, -10.5% year on year. The total market balance of two loans was 1606.7 billion yuan, +4% compared to 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 company's retail business focuses on the three tasks of “improving inventory asset efficiency, speeding up institutional brokerage business, and enhancing asset allocation”. It continues to consolidate the financial product system, asset allocation system and securities investment system, strengthen the wealth management customer service ecosystem, continue to expand the size of the customer base, promote the “10 million customers” project, enhance the customer service experience, deepen core competitiveness, and accelerate wealth management transformation.
The investment banking business serves the real economy and focuses on emerging strategic industries. The company achieved investment banking revenue of 190 million yuan in the first quarter of 2023, or -39.5% over the same period last year. The underwriting scale of the equity business in the first quarter of 2023 was -76.5% year on year, and the underwriting scale of the bond business was -18.2% year on year. Shareholders' underwriting scale was 1.96 billion yuan, ranking 23rd; of these, 2 IPOs were companies. The underwriting scale of bonds was 72 billion yuan, ranking 12th; among them, the underwriting scale of local government bonds, financial bonds, and ABS was 39.7 billion yuan, 8.5 billion yuan, and 700 billion yuan respectively. There are 7 IPO reserve projects, ranking 20th, including 4 main boards in 2 markets and 3 on the GEM board. The company's equity financing business carries out the responsibilities of central enterprises, serves the real economy, focuses on strategic emerging industries, deeply cultivates key regions, and actively expands “specialized, special and new” enterprises.
The asset management business insists on being customer-centered and enhances active management capabilities. The company achieved asset management business revenue of 220 million yuan in the first quarter of 2023, or -33.0% year on year. 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-employment turned a loss into a profit in the first quarter of 2023. The company achieved investment income (including fair value) of 940 million yuan in the first quarter of 2023, and a loss of 90 million yuan in the same period in 2022. The equity market picked up in the first quarter, and Wandequan A rose 6.5%. 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 1.3Xp/B for 2023, corresponding to a target price of 18.77 yuan, maintaining the “better than the market” rating.
Risk warning: Trading volume continues to decline, and investment returns continue to decline due to increased volatility in the equity market.