Events:
Central Plains Securities released its 2018 semi-annual report, with operating income of 865 million yuan in the first half of the year, an increase of 2.73% over the same period last year, and a net profit of 146 million yuan, an increase of 9.27% over the same period last year. The total assets were 45.864 billion yuan, an increase of 12.79% over the end of last year, and the rights and interests of shareholders belonging to the parent company were 10.05 billion yuan, down 1.18% from the end of last year.
Comments:
The revenue of the brokerage business has declined slightly and the market share is stable. In the first half of 2018, the brokerage industry was in poor shape. By the end of June, the average daily trading volume of stocks and funds in the market was 480.5 billion yuan, down 3.63% from the end of 2017, and the industry commission rate was still in a downward range. In the first half of the year, the trading volume of A shares and funds of Zhongyuan Securities was 618.463 billion yuan, an increase of 1.94% over the same period last year, and its market share was 0.54%, the same as that of the same period last year. However, affected by the decline in commission rate, the revenue of brokerage business still declined, and the revenue of brokerage business reached 504 million yuan, down 11.63% from the same period last year.
Investment banking revenue has risen steadily. In 2018, the company readjusted the organizational structure and internal control structure of the investment bank, and actively introduced a new team. In the deep ploughing of Henan on the basis of northward to Shenzhen and other regional layout. During the reporting period, the operating income of investment banking reached 24 million yuan, an increase of 3.39% over the same period last year.
Revenue from asset management business is growing against the trend. Affected by deleveraging and deleveraging, the scale of asset management of securities firms shrank in the first half of the year. In this context, the Central Plains securities asset management business still maintains a counter-trend growth, and the investment management business achieves an operating income of 135 million yuan, an increase of 28.81% over the same period last year.
The provision for impairment losses has increased due to changes in accounting standards. Under the influence of IFRS9, the company newly estimated a credit impairment loss of 63.1652 million yuan, which was the main increase in operating expenses. Other costs, such as administrative expenses, were properly controlled. Overall operating expenditure in the first half of the year increased by 10% compared with the same period last year, while net profit decreased by 6.36%. Due to the repurchase of shares of non-wholly-owned subsidiaries in the current period, the profit and loss attributable to minority shareholders decreased, and the net profit of homing remained positive year-on-year, with an increase of 9.27%.
Consider the current environment and the company's operating conditions, give "increased holdings" rating.
Risk hints: risks caused by fluctuations in the secondary market, risks brought about by policy changes, and so on.