Related events:
Pacific Securities issued a performance forecast on January 31, 2018, announcing that the net profit belonging to shareholders of listed companies in 2017 is expected to be between 100 million and 120 million yuan, a decrease of 547 million to 567 million yuan compared with the same period in 2016, and a decrease of 82 percent compared with the same period last year.
Main points of investment:
The double decline of brokers and self-management is a drag on the annual performance. As of 2017H1, the operating income of the proprietary business was-203 million yuan, a decrease of 172 million yuan compared with the same period in 2016, and the operating profit was-204 million yuan, a decrease of 143 million yuan compared with the same period in 2016. The company's proprietary position structure deviated from the market style, resulting in a sharp decline in investment performance for the whole year of 2017 compared with the previous period. From the perspective of brokerage business, the company's brokerage business turnover in 2017 was 615.295 billion yuan, ranking 65th, down 4 places from 2016. The rate of superimposed commission continued to decline, and the company's overall brokerage business performance decreased significantly compared with the same period last year. We believe that the decline in the performance of the brokerage business, which accounted for 76.63% of revenue in the first half of 2017, and the superimposed losses in proprietary business are the main reasons for the sharp decline in the company's overall performance for the whole year.
The growth rate of performance for the whole year is relatively low, and the company is expected to further reduce the proportion of brokerage business income. According to the forecast of the company's performance, the net profit of Q1/Q2/Q3/Q4 belonging to the parent company increased by-1374% and 184% in 2017 compared with the same period last year. The proportion of the company's brokerage business income in the first half of 2017 is as high as 76.63%. In the current industry environment with a moderate decline in trading volume and superimposed commission rate, the significantly high proportion of the company's brokerage business is not conducive to the improvement of the company's performance. in comparison, the top three brokerages with industry brokerage income in the first half of 2017 accounted for only 28%, 25% and 39% respectively.
It is proposed to issue 1.7 billion convertible bonds to supplement working capital. On February 27, 2017, the company announced that the issuing scale of convertible bonds will be reduced to 1.7 billion yuan. after the successful issuance of convertible bonds, all convertible bonds will be used to supplement the company's working capital, and the capital scale of the company will be increased accordingly after the holders of convertible bonds are converted into shares.
Profit forecast: we expect the company's EPS in 2017, 2018 and 2019 to be 0.02,0.06,0.08 yuan respectively, giving it a "neutral" investment rating for the first time.
Risk tips: the company's brokerage business performance continues to decline; the company's proprietary business performance continues to decline; the securities industry supervision is stricter and so on.