Event: central Plains Securities released its quarterly report in 2019, 19Q1 achieved revenue of 658 million yuan, year-on-year + 46.10%; return to the mother of net profit of 182 million yuan, year-on-year + 78.78% EPS of 0.05 yuan per share. At the end of the period, the total assets were 48.552 billion yuan, + 15.17% compared with the end of last year, and the net assets were 10.122 billion yuan, + 1.72% at the end of last year. ROE is 1.81%, which is + 0.81% compared with the end of last year. A preliminary plan for a non-public offering of A shares was issued on the same day, with a proposed non-public offering of no more than 774 million shares and a raised amount of no more than 5.5 billion yuan. The funds raised are mainly used for capital intermediary, investment and trading, capital increase for subsidiaries at home and abroad, information system construction, risk control compliance, and supplementary working capital, with the amount of investment not exceeding 25, 15, 10, 100, 000 yuan respectively
Brokers and investment banks gave full play to the advantages of transformation, with an increase of more than 30% over the same period last year. The company has been carrying out strict reforms, with brokerage business and investment banking business growing by 31.09% and 31.25% respectively in the first quarter of 2019 compared with the same period last year.
In 2018, the company reformed a number of business lines in an orderly manner, rebuilt the internal control structure of investment banks, optimized the compensation system to attract talents, and formed the headquarters of three regional investment banks in Beijing, Shanghai and Zhengzhou.
Proprietary income increased by 267.71% over the same period last year, continuing the high growth momentum. The company reconstructed its proprietary investment process. In 2018, solid-income investment better seized the opportunity of last year's bond bull market and achieved better returns. The rate of return on equity investment also significantly exceeded that of the market, and the proprietary business increased by 217.64% compared with the same period last year. In 2019, proprietary business continued this high growth momentum, with self-supporting income of 353 million yuan in the first quarter, an increase of 267.71% over the same period last year.
Investment advice: the company benefits from the recovery of the securities market, and the reform effect of business line transformation is expected to be further revealed. The company is the only legal person securities firm registered in Henan, and its small loan, life insurance and futures business form its own characteristics. Dual listing broadens the channels of replenishing funds and creates overseas influence. It is expected that in 19-20-21, the company's EPS0.03/0.04/0.05 yuan per share, the current PB2.34x.
Risk hints: a-share investment activity decreased; market volatility risk; capital market reform did not meet expectations; Science and Technology Innovation Board listed companies did not meet expectations.