Incident On October 13, 2017, Anxin Trust (600816) announced the third quarter results as follows: As of the end of the third quarter of 2017, the company achieved operating income of 4.197 billion yuan, an increase of 19.40% over the previous year; net profit of 2,825 billion yuan, a year-on-year increase of 22.27%. Total assets reached 20.075 billion yuan, an increase of 15.42% over the end of the previous year; net assets reached 15.336 billion yuan, an increase of 11.80% over the end of the previous year. As of the end of the reporting period, the company's weighted average ROE was 19.92%, a year-on-year decrease of 12.84 percentage points. EPS is $0.62 and BVPS is $3.36. Brief review The capital market picked up in the first and third quarters, and both investment income and handling fee income boosted. In the third quarter of 2017, the company achieved operating income of 1,846 billion yuan, an increase of 1.57 times over the previous year, an increase of 26.44% over the previous year; net profit of the mother was 1,213 billion yuan, an increase of 1.05 times over the previous year, an increase of 32.14% over the previous year. The main reason for the boost in performance is: (1) Net investment income and profit and loss from changes in fair value in the existing business were greatly boosted by the recovery in the capital market. Among them, changes in fair value reversed losses (loss of 456 million yuan in the second quarter) to profit (revenue of 47 million yuan in the third quarter). (2) The recovery in trust business brought net revenue from fees and commissions in the third quarter to $1,306 billion in a single quarter, a sharp increase of 65.74% over the previous quarter and a sharp increase of 31.52% over the previous year. 2. Capital strength is continuously strengthened to protect active transformation. In the fourth quarter of 2016, the company successfully fixed an increase of nearly 5 billion yuan, increasing the amount of investment in various financial assets. At the beginning of September, a plan to issue 6.8 billion yuan of private preferred shares was also announced. The net capital and net asset scale are expected to increase dramatically, providing capital guarantees for the continued expansion of the company's business scale during the business transition period. Weighted return on net assets has been affected in the short term, but is expected to remain at the forefront of the industry in the long run. 3. Investment advice: Based on the main trust business, the company maintains a high share of net revenue from fees and commissions all year round. At the same time, it insists on returning to the original trust business, and continuously increasing the active management ratio to promote a recovery in the annualized trust return rate and return on net assets. Although the asset scale growth rate of the trust industry has been affected by the strengthening of channel deleveraging regulations, and there has been a rapid decline, we are still optimistic about the long-term healthy development of the industry and companies. We maintain the Secure Trust (600816) “buy” rating. We forecast that in 2017 and 2018, the company's EPS will be 0.81 yuan and 1.02 yuan, respectively; BVPS will be 3.86 yuan and 5.03 yuan, respectively. 4. Risk warning: market fluctuation risk, credit risk, policy risk, risk of failure to issue preferred shares, etc.