Investment points: Huachuang Securities listed on the curve. The company's Internet layout is mainly reflected in the traditional securities business Internet and the creation of private equity fund service platform. The regional advantage of brokerage business is obvious, and the stock pledge has increased significantly compared with the same period last year. Target price 13.30 yuan, "buy" rating.
[event] in 2017, Baoshuo achieved an operating income of 2.101 billion yuan, an increase of 88.43% over the same period last year, and its net profit was 131 million yuan, a year-on-year turnaround, corresponding to 0.08 yuan for EPS. The sharp increase in the company's performance over the same period last year is mainly due to the merger of Huachuang Securities in September 2016, and the 2016 annual report only merges Huachuang Securities data from September to December. In 2017, Huachuang Securities contributed 1.909 billion yuan in revenue and 202 million yuan in net profit.
The regional advantage of brokerage business is obvious, and the scale of stock pledge has increased significantly. Huachuang Securities has far more business network coverage and service depth than other securities firms in Guizhou Province, forming an obvious competitive advantage in the Guizhou regional market. In 2017, the stock-based trading volume was 601.1 billion yuan, and the market share was about 0.25%, which was basically the same as that in 16 years. Huachuang Securities entity marketing network is oriented by customer demand and carries out diversified network layout; at the same time, the company relies on the integrated financial service platform to realize the seamless connection of online and offline services. to promote the securities business department to accelerate the transformation to the foreground of integrated financial services. The company's credit business developed steadily, with a financing scale of about 1.634 billion yuan at the end of 17, with a year-on-year + 1.23% market share and a market share of 0.2%. At the end of 17, the undecompressed balance of stock pledge was 42.914 billion yuan, an increase of 52.2% over the end of 2016, with a market share of 1.1%.
Practice based on Internet science and technology to build a large investment bank in a broad sense. Huachuang Securities Investment Banking business provides customers with a full range of investment, financing and financial advisory services under the operation mode of "large investment bank". In 2017, the company completed 2 IPO projects, raised 710 million yuan, issued 6 additional issues, raised 2.93 billion yuan, 9 corporate bonds raised 4.41 billion yuan, 4 corporate bonds raised 3.49 billion yuan, and ABS17 raised 1.5 billion yuan. The company has realized the interconnection of securities business, launched a comprehensive service platform for private equity funds, and constructed a relatively perfect comprehensive financial service system for non-standardized assets. efforts will be made to build a large investment bank with functions of non-standardized asset mining, product creation, issuance and trading to meet the investment and financing needs of multi-level customers.
Leading in the service ability of investment and research. Huachuang Securities Research Institute has set up a first-class research team, undertaken relevant research projects of the State Administration of Foreign Exchange, Securities Regulatory Commission and other units, and basically achieved full coverage of research business in the field of public offering funds. The company is based in Guizhou, with strong bargaining power and considerable commission income.
[investment suggestion] it is estimated that the net return profit of Baoshuo shares in 2018 is 197 million yuan, compared with the same period last year, + 50% BVPS is 0.11 yuan, and EPS is 8.68 yuan. Give the company comparable small and medium-sized securities firms an average of 2018e Pmax B 1.6x, get the target price of 13.89 yuan; use the segment valuation method to get the target price of 12.70 yuan. Take the average of both, the target price is 13.30 yuan, maintain the "buy" rating.
Risk hint: the market remains in the doldrums, and market supervision is further strengthened.