Main points of investment: the only legal person securities company in Henan Province, AqiH has greatly improved its listing and financing capacity in both places, reformed all aspects of each line, and insisted on a high dividend rate. Reasonable value range of 5.34-6.41 yuan, maintaining a "neutral" rating
[event] Zhongyuan Securities achieved revenue of 1.3 billion yuan in the first half of 2019, + 49% year-on-year; net profit of 200 million yuan, + 65% year-on-year; corresponding to EPS0.06 yuan. In the second quarter, the operating income reached 600 million yuan, + 52% compared with the same period last year, and the net profit returned to the mother was 100 million yuan, + 32% compared with the same period last year. The year-on-year increase in net profit was mainly due to a significant increase in net income and investment income (including fair value) in investment banking. Brokerage / underwriting / asset management / interest / investment income accounted for 23% of operating income in the first half of 2019, respectively.
The brokerage service was optimized, and the revenue increased compared with the same period last year. Realized brokerage income of 300 million yuan, + 36% compared with the same period last year. In line with the trend of industry change, the company continues to promote the transformation and reform of brokerage business to wealth management from the aspects of customer service appropriateness, service push standardization, service activity branding and so on. The company continues to optimize the "Fortune Central Plains" customer classification service system to enhance customer satisfaction and recognition of the company's products and service brands.
Investment banking business is growing rapidly, and the scale of stock and bond underwriting has increased significantly. Realized underwriting income of 100 million yuan, + 182% compared with the same period last year.
The underwriting scale of stocks and bonds was + 858% and + 442% respectively compared with the same period last year. Equity main underwriting scale is 1.9 billion yuan; refinancing is 3, underwriting scale is 1.9 billion yuan. The main underwriting scale of bonds is 4.3 billion yuan, and the underwriting scale of corporate bonds and corporate bonds is 30 and 1.3 billion yuan respectively. There are 19 IPO reserve projects, ranking 30th, including 3 on the motherboard, 3 on the gem and 1 on Science and Technology Innovation Board.
We will implement the requirements of the new regulations on asset management, and increase the scale and proportion of pooled capital management. In the first half of 2019, the asset management income reached 41 million yuan,-23% compared with the same period last year. The company strictly implemented the requirements of the new regulations on asset management and actively adjusted the business layout. By the end of June 19, the scale of entrusted capital management was 9.7 billion yuan, of which pooled capital management was 5.9 billion yuan, which was + 15% over the end of last year; directional capital management was 3 billion yuan, which was-42% higher than that at the end of last year; and special capital management was 700 million yuan, up from-23% at the end of last year.
The investment capacity has been improved, and the level of self-investment has been greatly improved. The company realized 500 million yuan of net investment income (including fair value) in the first half of the year, + 211% compared with the same period last year. Through a series of reforms in investment process, organizational structure and performance evaluation, the company's proprietary trading business line has enhanced its active investment ability, adhered to a sound operation strategy, refined liquidity management, and better grasped the opportunities of the stock market and bond market in the first half of the year. the income level increased significantly compared with the same period last year.
[investment suggestion] We expect the company's net profit per share from 2019 to 2021E to be 0.10,0.10 and 0.10 yuan respectively, and its net assets per share to be 2.67,2.71 and 2.76 yuan respectively. Considering that the company has always adhered to a high dividend rate, cash dividends have accounted for an average of more than 58% of the net profit of the year in the past three years. The long-term and stable high dividend not only helps to enhance the allocation enthusiasm of investors, but also shows the management's confidence in the future performance improvement of the company. In addition, Atroph listing, strong financing capacity, capital consumption business and other business is expected to accelerate growth. We give it a slightly higher valuation than the industry, giving 2019 2.0-2.4x Pmax B, corresponding to a fair value range of 5.34-6.41 yuan, maintaining a "neutral" rating.
Risk hint: the continued downturn in the market leads to a decline in the scale of business, and market supervision is further strengthened.
