This report is read as follows:
The management and funds of Guosheng Securities are expected to drive the rapid growth of securities business, and the deepening of the company's investment layout in the field of Internet finance is expected to continue to contribute incremental performance for the company.
Main points of investment:
Maintain the "overweight" rating and maintain the target price of 28.75 yuan. The company's 17-year return net profit is 580 million yuan, compared with the same period last year, + 16.6% 18Q1 return net profit-110 million yuan, from profit to loss, the performance is lower than we expected.
Guosheng Securities'17-year net profit increase and investment sector performance increase drive the company's 17-year net profit growth. 18Q1 performance loss is mainly affected by the increase in management fees and the decline in proprietary income. For the whole year, Guosheng Securities management and funds in place are expected to drive the securities business to achieve rapid growth. Downgrade 18-20 years EPS to 0.58 EPS 1.07 yuan (0.81 yuan 0.99 yuan before the adjustment), considering the deepening of the company's investment in the mutual fund sector is expected to increase the company valuation, maintain the target price of 28.75 yuan per share, corresponding to 18P/B 3.1x.
The securities business opens the omni-directional layout and is optimistic about the annual performance growth. 1) in 17 years, Guosheng Securities achieved a net profit of 640 million yuan, a slight increase of 5% over the same period last year, and the securities business contributed 87% to the company's operating profit. 2) income from securities proprietary, capital intermediary and asset management business respectively compared with the same period last year, + 49%, + 49%, "136%," 154%, brokers and investment banks,-22%, 55%, respectively. 3) in the past 17 years, the company's revenue structure tends to be diversified, with omni-directional business layout, characterized by mergers and acquisitions as investment banking business, solid income and asset management as profit breakthroughs, and accelerate the transformation of wealth management and credit business. 4) the company's 18Q1 net profit loss is expected to be mainly affected by the increase in management fees and the decline in proprietary income. Throughout the year, the management and funds of Guosheng Securities are expected to drive the rapid growth of brokerage business.
Focus on investment in Internet finance. 1) in the past 17 years, the company has successively participated in the establishment of Renault small loan, transferred a 2% stake in Weidai Ltd, an auto finance Internet platform with 170 million yuan, and invested in Bitz, a virtual currency trading platform. 2) Qudian Inc was listed on the New York Stock Exchange in 17 years, and we estimate that the company currently has a floating profit of more than 600 million yuan. It is expected that the company's investment in the field of mutual funds and the deepening of cooperation with Qudian Inc will continue to contribute to the company's performance.
Catalyst: the company's investment in the field of mutual funds and business cooperation with Qudian Inc have contributed to higher-than-expected performance.
Risk hint: Qudian Inc's investment return is lower than expected; the performance growth of securities firms is not up to expectations.