Comment event:
The company announced its 2016 semi-annual report that its revenue was 594 million yuan, down 68.38% from the same period last year, and the net profit returned to its mother was 146 million yuan, down 84.05% from the same period last year, corresponding to an EPS of 0.033 yuan, a decrease of 87.31% over the same period last year. At the same time, the company intends to use the capital reserve fund to increase its share capital by 5 shares for every 10 shares, and the total share capital will be increased to 6.816 billion shares.
Main points:
The regional advantage of brokerage business is prominent, and credit business is growing against the trend. During the reporting period, the company's brokerage business achieved income of 695 million yuan, a decrease of 16.21% over the same period last year, of which the net income of agency securities trading business was 187 million yuan, down 69.84% from the same period last year; and the net interest income of credit business was about 500 million yuan, an increase of 39.65% over the same period last year. The scale of credit business at the end of the period was 12.241 billion yuan, of which the stock pledge was 10.241 billion yuan, an increase of 11.21% over the end of last year. The company's brokerage business ranks first in Yunnan Province, and it is built into the tentacles of various business lines, and actively expand integrated financial business. According to the plan, the capital intermediary business after the company's subscription and rights issue is expected to accelerate the development.
Investment bank revenue quadrupled compared with the same period last year, and the total number of lead underwriter projects increased significantly. During the reporting period, the company's investment banking revenue reached 83.5405 million yuan, an increase of 191.6% over the same period last year. According to Wind statistics, during the reporting period, as the lead underwriter, the company completed one IPO and one additional issue and four additional bonds, and the number of projects doubled compared with the same period last year, achieving an underwriting income of 33.7873 million yuan, an increase of 603.79 percent over the same period last year. 41 enterprises completed the new third board recommendation listing business, achieving a net income of 35.8307 million yuan for financial consultants listed and supervised, an increase of 58.91 percent over the same period last year. The company's investment banking business has a certain brand effect in the areas of environmental protection, software and urban investment bond underwriting, and the prosperity of investment banking business is expected to be maintained throughout the year.
Dragged down by the market, the performance of self-management and asset management business is not good. During the reporting period, the income from the company's securities investment business was-31.0731 million yuan; the income from the asset management business was 64.7948 million yuan, down 57.70% from the same period last year; and the investment income was 100 million yuan, down 90.63% from the same period last year. Mainly due to the impact of the market downturn, the company's investment income on trading financial assets lost 40.7206 million yuan, and the investment income on asset management products was 19.6578 million yuan, down 83.98 percent from the same period last year. The company has improved significantly in the scale of securities investment, and its proprietary performance is expected to improve with the recovery of the capital market in the second half of the year.
Look forward to the capital thickening to enhance the comprehensive financial strength. At the beginning of 2016, the company raised a total of 4.298 billion yuan at the rights issue price of 4.24 yuan per share; at the end of the first half of the year, the company plans to raise no more than 3.7 billion yuan in non-public convertible bonds, which will mainly be used to expand the scale of credit trading business; strengthen the asset management and fixed collection business; appropriately increase the scale of equity securities investment business. In recent years, the company has formulated the development goal of "taking the brand-new asset management business as a breakthrough, reconstructing the business system and creating an integrated industrial chain of investment and financing". And committed to become customers with multi-channel capital market value realization ability, to become a securities business as the core, with a certain international competitiveness of large-scale securities holding group.
It is estimated that the EPS of the company from 16 to 18 years is 0.14 yuan / 0.22 yuan / 0.27 yuan respectively, covering and giving the overweight rating for the first time.
Risk hint: the downward market brings double pressure on performance and valuation.