Core viewpoints
Performance growth increased month-on-month, ROE and equity multiplier both improved. 1) from January to September 2020, the company achieved operating income of 7.529 billion yuan, + 3% year-on-year, and home net profit of 2.295 billion yuan, + 29% year-on-year. The performance growth rate was higher than that in the first half of the year, but it is still expected to be lower than the industry average. 2) the company's annualized ROE8.61%, from January to September 2020 is higher than that of the first half of the year + 0.54pct. As of the end of 20Q3, the company's equity multiplier reached 3.72, an increase of 0.20 compared with the end of half a year. 3) the proportion of income from brokerage, interest, self-management, investment banking and asset management is 37%, 22%, 17%, 10% and 3%, respectively.
The active market boosted brokerage income by 45%, and net interest income increased by 48% under the "one increase and one decrease" of financial and stock quality. 1) the activity of the A-share market increased significantly in the first three quarters of 20 years. The company achieved 2.755 billion yuan in brokerage revenue, + 45% compared with the same period last year. 2) by the end of 20Q3, the company had raised a capital balance of 31 billion yuan, a substantial increase of 34% over the beginning of the year; on the contrary, the balance of buying and resale financial assets fell 19% to 10.2 billion yuan compared with the beginning of the year, indicating that the financial and stock quality business was "one increase and one decrease." Although interest income increased only slightly by 4 per cent, the company achieved net interest income of 1.626 billion yuan in the first three quarters, + 48 per cent year-on-year, thanks to proper control of interest payments (- 16 per cent year on year). 3) the company's asset management income in the first three quarters was 245 million yuan,-11% compared with the same period last year, which was significantly narrower than that in the first half of the year (- 25%).
Investment banking company IPO progress is not as expected, proprietary business performance is a drag on performance. 1) in the first three quarters of 2000, the company achieved 768 million yuan in investment banking revenue,-6 percent year on year. In the first three quarters, the underwriting scale of the company's stock and bonds was 126.2 billion yuan, with a market share of 1.63%, compared with the same period last year. Among them, the size of IPO was only 1.2 billion yuan, and the market share was only 0.32%. In the investment bank year when the registration system reform was advancing rapidly, the company's IPO business was not as expected. 2) as of the end of 20Q3, the size of the company's financial investment assets was 66.5 billion yuan, an increase of 12% over the end of half a year, but the company's self-operating income in the first three quarters was only 1.315 billion yuan, which was slightly better than-31% in the first half of the year (slightly better than-37% in the first half of the year).
Financial forecasts and investment suggestions
It is estimated that the BVPS of the company in 20-22 years is 4.92, 5.42 and 6.01 yuan respectively. According to the relative valuation method, the average 20PB of the comparable company is 3.30x, corresponding to 16.22 yuan, maintaining the overweight rating.
Risk hint
The impact of the policy on the industry is greater than expected; the dual impact of market fluctuations on industry performance and valuation.
