Profit growth in the first three quarters was solid, and risk management business took the lead.
The company released three quarterly results for 2023: 23Q1-3 operating income of 18.79 billion yuan, year-on-year-34%; return to the mother net profit of 560 million yuan, + 18% year-on-year. 23Q3's single-quarter operating income is 6.83 billion yuan,-25% year-on-year, + 3% month-on-month, and its net profit is 150 million yuan,-6% year-on-year and-28% month-on-month. The market boom was low in the third quarter, and the company's overall profit in the single quarter was lower than that of the same period last year, but the net profit in the first three quarters remained positive under the low base effect. We appropriately reduce the company's other business income, management fees and other assumptions, it is estimated that the 2023-2025 EPS is 0.51,0.55,0.60 yuan, 2024 BPS is 9.04 yuan, compared with the company's 2024 Wind consensus expected PB average of 2.16 times, taking into account the company continues to build derivatives investment banking ecology, risk management business leader, give the company 2.2x PB in 2024, the target price of 19.89 yuan, maintain the holding rating.
The income of risk management business has declined, and the ecology has been continuously improved.
The company's 23Q1-Q3 other business income (mainly risk management business income) is 17.47 billion yuan, year-on-year-36%, other business profit margin is 1.08%, year-on-year-1.2pct-23Q3 single-quarter other business income 6.44 billion yuan, year-on-year-26%, other business profit margin 0.93%, year-on-year-2.7pct. The company is an industry leader in the field of futures risk management, and strategically looks at the investment of the industrial chain from a perspective similar to that of investment banks. the core advantages are as follows: 1) the layout varieties are scattered enough, the rules, spot characteristics and industry hidden rules of each variety are different, and the requirements for customer service are very different, and the company dabbles widely; 2) the depth of the industrial chain is strong, and the relationship between upstream and downstream can be connected together. 3) the over-the-counter business is growing rapidly, expand the stock and innovation increment in the future, actively explore overseas over-the-counter business, and improve the ecology of derivatives investment banking.
Actively lay out international business and explore the second growth curve
The company's international business started relatively early. at present, there are nine institutions and five financial licenses in Singapore and Hong Kong, involving securities, futures, brokerage and capital management; in terms of industrial trade, there are three companies in Singapore and Hong Kong; the overall layout outside the country is to provide a package of services around finance and trade. In terms of business positioning, in addition to brokerage and clearing, Hong Kong has also achieved good results in wealth business. In Singapore, the financial license is mainly futures brokerage business, wealth management and asset management are doing further layout, actively exploring the second growth curve.
Actively develop the asset management business and create a closed loop of the business system
Yongan Guofu is a leading private equity institution in the industry, with a management scale of 10 billion yuan and a shareholding ratio of 31%. It is an important joint venture, forming a good ecology for the company's investment, wealth and asset management business.
The company's asset management department focuses on the active management of futures derivatives, while doing risk management and asset allocation functions according to the needs of financial institutions to expand the ToC end business and create a closed loop business system.
Risk hint: the market boom is declining and the development of innovative business is not as expected.