Core ideas:
1. Event
The company issued a rights issue prospectus on January 12, 2016, which will be allotted to all shareholders in the proportion of 3 shares for every 10 shares. the rights issue price is 4.24 yuan per share, and the total amount of funds raised is not more than 4.5 billion yuan. After deducting related expenses, all will be used to increase the company's capital and replenish working capital.
two。 Our analysis and judgment
1) the rights issue enhances the capital strength and brings the inflection point of performance growth.
After the completion of this rights issue, all the funds raised will be used to increase the company's capital. the scale of the company's credit business, securities investment business, asset management business, investment banking business, brokerage business and direct investment business implemented through wholly-owned subsidiaries will be greatly increased, and the proportion of income corresponding to its business will also change accordingly. This issue will enrich the company's equity capital, asset-liability ratio will decline accordingly, and profitability will be further improved.
2) the rights issue can enhance the contribution of capital intermediary business income and disperse the risk of proprietary business.
The funds raised in this rights issue are mainly invested in credit trading business and securities investment business, with a total investment of no more than 3.5 billion yuan, accounting for 78% of the total raised funds. The business size of 2015H1 is 7.037 billion yuan, and the scale of buying and reselling financial assets is 6.81 billion yuan, an increase of 28.49 times and 2.93 times respectively over the same period last year. No more than 2 billion yuan of rights issue funds will be used to expand the credit trading business and enhance the income contribution of the capital intermediary business. The income from 2015H1's securities investment business totaled 861 million yuan, accounting for 45.83 percent of the operating income, an increase of 9.46 percent over the beginning of the year. 2015H1's investment income increased by 680.33% over the same period last year, making it the fastest growing business line. No more than 1.5 billion yuan of rights issue funds will be used for proprietary business and invest in sound products and persistent products, which will help to spread risks and obtain stable returns.
3) the commission rate of brokerage business remains high, and the market share has not improved significantly.
The company relies on regional advantages, the commission rate remains high. The company's business is relatively concentrated in the economically underdeveloped Yunnan Province, and 31 of the 67 business departments are distributed in Yunnan, benefiting from the fact that the average commission rate of the market in Yunnan Province is higher than that of the national market. The average 2015H1 commission rate of the company is 1.07 ‰, which is 0.053 percentage points higher than that of the industry and about 2 times that of the industry. The market share of 2013, 2014 and 2015H1 shares of the company is 0.230%, 0.231% and 0.239% respectively, and the market share has not improved significantly.
4) based on Yunnan, continue to benefit from regional geographical advantages
As the only listed securities institution in Yunnan Province, the company has received strong support from the Yunnan government. Yunnan has a special geographical location, which is located in the economic exchange zone between China and Southeast Asia. With the in-depth development of national strategies such as China-ASEAN Free Trade area and Maritime Silk Road, the opening up of financial business in Yunnan has been speeded up. The company's overseas business continues to benefit.
3. Investment suggestion
We believe that the company's performance flexibility as a regional small securities firm has been reflected, and the following bright spots are worth looking forward to: 1) the company's capital intermediary business still has great potential; 2) the company is more active in cooperation with Internet enterprises. it is of great significance to promote the transformation of the company's traditional business and the development of innovative business. Therefore, we give a "cautious recommendation" rating and predict that the EPS for 2015 and 2016 will be 0.31 and 0.35 yuan.
