Event: Everbright Securities released its 2022 semi-annual report, and its performance was slightly better than expected. 1H22 achieved revenue of 5.37 billion yuan / YoY-33%, return profit of 2.11 billion / YoY- 7%, of which 2Q22 revenue of 3.19 billion yuan / QoQ+46%, return profit of 1.44 billion yuan / QoQ+116%. Total assets at the end of the period were 251 billion, up 5% from the beginning of the year, and net assets were 63.1 billion, up 9% from the beginning of the year. Weighted average ROE 3.61% (underage), year-on-year-0.68pct.
1H22 fee income accounts for more than 60%, asset management income increased by nearly 60% compared with the same period last year, revenue growth is slower than profit growth, mainly due to the decline in bulk trade income. 1H22 realized 5.1 billion yuan of main securities income (excluding bulk trade and other income) / yoy-14%, of which fee income (brokerage + investment banking + asset management + other fee income) accounted for 63%. The income and proportion of each line are: brokerage 1.71 billion / 33%, investment bank 810 million / 16%, asset management 660 million / 13%, other fee income 50 million / 1%, net interest 1.24 billion / 24%, investment 580 million / 11%, long stock investment 70 million / 1%. 1H22 brokerage, investment bank, asset management, net interest, investment and long-stock investment income are-15%,-24%, + 58%,-3%,-29% and + 35% respectively compared with the same period last year. The company's revenue growth rate (- 33%) was lower than the profit growth rate (- 7%), mainly due to the decline in other business income (low gross profit margin) dominated by bulk trading business. The other business income of 1H22 Everbright Securities was 120 million yuan, down 1.7 billion /-93% from the same period last year, mainly because the epidemic affected the development of commodity business.
The investment assets increased rapidly, the debt cost ratio decreased, and the investment income of 2Q22 turned from losses to profits. 2Q22 invested 102.2 billion yuan in assets, + 17% at the beginning of the year, and 142.7 billion yuan in financial assets (investment assets + credit assets), basically the same as at the beginning of the year. 1H22's operating leverage is 2.81 times lower than at the beginning of the year, and investment leverage is 1.62 times higher than at the beginning of the year. With the recovery of the 2Q22 equity market (2Q22 Shanghai and Shenzhen 300 up 6.2% and 2Q22 1Q22 up-14.5%), 2Q22 achieved an investment return of 675 million (VS 1Q22-86 million), turning a loss into a profit. It is estimated that the annualized net investment return of the company's 1H22 is 1.2% (VS 2021 1.75%), and the annualized debt cost rate is 3.2% (VS 2021 3.7%).
Fund investment business to achieve business development, greatly reduce the scale of stock pledge. During the reporting period, the "Golden Sunshine Butler" fund investment service was officially launched; 1H22 had 5.23 million retail customers, an increase of 9% over the beginning of the year, with total customer assets of 1.35 trillion and a market share of 2.1% of purchasing income; and the number of company shares + mixed public offering funds reached 32 billion, an increase of 5.3% over the same period last year, and 34.5 billion of non-goods public offerings, an increase of 8.8%. The balance of 1H22 financing is 36.6 billion, down 19% from the beginning of the year, with a market share of 2.28%, ranking 13th in the industry. The balance of stock pledge is 1.284 billion, down 27% from the beginning of the year, and the ratio of stock pledge to loan is 71.5%.
The active management ability of asset management business has been improved, and large asset management has contributed 13% of the profits. 1H22, big asset management contributed a total profit of 265 million yuan, down 14% from the same period last year. Among them, Everbright Prudential Fund, Dacheng Fund and Optical Securities Management contributed profits of 0.41,0.68 and 157 million yuan, respectively, compared with the same period last year. 14% and + 53% respectively 28%. At the end of the period, the entrusted management scale of optical certificate assets management was 432 billion, an increase of 15% over the beginning of the year, of which active management accounted for 94%, an increase in 3.2pct compared with the same period last year.
1H22 optical certificate management fee income industry 10th, 2 places higher than the same period last year. Everbright Prudential Fund at the end of the period of public offering fund size of 84.1 billion, of which non-goods base of 64.9 billion, compared with 1H21 are down 12%.
The equity underwriting business has achieved a breakthrough, and the IPO project is rich in reserves. The amount of equity underwriting of 1H22 was 14.7 billion, an increase of 55% over the same period last year, of which IPO was the main underwriter of 4 orders, with an underwriting scale of more than 8 billion, an increase of 14% over the same period last year. Naxi, the largest underwriter, raised more than 5.8 billion, ranking among the top 10 raised by Science and Technology Innovation Board IPO. The company's refinancing underwriting scale is 5.76 billion yuan, including China Jane Science and Technology rights issue (2 billion) and CITIC rights issue (22.3 billion). The company has rich IPO reserves and will review 21 companies.
Investment analysis opinion: maintain 22-year profit forecast, raise 23-24 profit forecast, maintain overweight rating. Taking into account the company's stock pledge compression, credit risk clearance, downgrade the credit impairment assumption for 2023-2024, thereby raising the 2023 and 2024 forecasts and maintaining the 2022 forecast; estimated 22-24e homing net profit of 43, 48, 5.3 billion yuan (originally forecast for 22-24 years 43, 47, 5.2 billion), + 23.9%, + 11.8%, + 10.5%, respectively. The company's fund invests in the business development industry, and the equity underwriting business has achieved a significant breakthrough; maintain Everbright Securities holding rating. The current closing price corresponds to 17x 22e dynamic PE and 1.28x dynamic PB.
Risk hints: the downward pressure on the economy has increased; the activity of stock-based trading in the market has dropped sharply; and the stock market has fallen sharply.