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中银证券(601696):整体业绩环比回落 财富管理业务具备韧性

Bank of China Securities (601696): Overall performance declined month-on-month, wealth management business was resilient

中信證券 ·  Nov 16, 2023 10:16

In the first three quarters of 2023, BOC Securities achieved operating income of 2.20 billion yuan, a year-on-year decrease of 2.3%; net profit of 8.1 billion yuan, an increase of 5.8%; and diluted ROE of 4.73%, up 0.05 percentage points year-on-year. Looking at a single quarter, 2023Q3's performance declined month-on-month, but the performance of the wealth management business was relatively stable.

Bank of China Securities is expected to rely on the advantages of the Bank of China platform, give full play to the “commercial bank+investment bank” collaborative advantages, maintain its leading position in asset management business, and enhance its core competitiveness through shareholder resources.

2023Q3's performance declined month-on-month, with net profit returning 165 million yuan to the mother in a single quarter. In the first three quarters of 2023, BOC Securities achieved operating income of 2,205 billion yuan, a year-on-year decrease of 2.25%; net profit of 810 million yuan, a year-on-year increase of 5.76%; current EPS of 0.29 yuan/share, compared to 0.28 yuan in the same period last year; and a diluted ROE of 4.73%, up 0.05 percentage points year-on-year. BVPS vested in common shareholders at the end of the period was $6.16, up 4.41% from the beginning of the year. Looking at a single quarter, 2023Q3 performance declined month-on-month. The revenue for the 2023Q1/Q2/Q3 quarter was 684 million/908 million/612 million yuan, respectively, and net profit for the single quarter was 253 million/393 million/165 million yuan, respectively.

Wealth management: The brokerage business declined year on year, and the sector's performance in a single quarter was relatively stable.

In terms of brokerage business, the company achieved net brokerage revenue of 631 million yuan in the first three quarters of 2023, a year-on-year decrease of 11.62%. Looking at the quarterly basis, the net income from brokerage fees for the first three quarters was 205/223 million /213 million yuan, respectively. Q3 fell 9.10% month-on-month, mainly due to a decline in market trading activity in the third quarter. Considering that the average daily turnover of A-shares in 2023Q2/Q3 was 1006.6 billion yuan and 798.4 billion yuan respectively, that is, Q3 fell 20.68% month-on-month, the company's brokerage business maintained a certain degree of resilience when market trading was cold.

In terms of credit business, in the first three quarters of 2023, the company achieved net interest income of 634 million yuan, an increase of 6.85% over the previous year. On a quarterly basis, 2023Q1/Q2/Q3 net interest income was 211 million /209 million /213 million yuan respectively, and the performance was relatively stable. Judging from the risk level, the overall scale of the company's credit business is small and the risk is relatively manageable: in 2023 H1, the average daily balance of the company's securities financing business was 11.390 billion yuan, up 2.27% from the average daily balance for the full year of 2022; as of the end of 2023H1, the company's stock pledge balance was 508 million yuan, up 16.2% from the beginning of the year, and the average performance guarantee ratio was 289%.

Investment management: Asset management revenue and scale have both declined, and there is an urgent need to increase scale to maintain advantage.

In terms of asset management business, in the first three quarters of 2023, the company achieved net income from asset management business fees of 417 million yuan, a year-on-year decrease of 26.37%. Q3 The net revenue of asset management business in Q3 was 133 million yuan in a single quarter, down 1.2% from the previous month. In 2023, the company's asset management scale was under pressure: as of the end of 2023H1, the company's collective, single, and special asset management scales were 167.5 billion, 196 billion, and 362 billion yuan respectively, down 17%, 12%, and 2% from the beginning of the year; the fund management scale was 116.6 billion yuan, which was basically the same as at the beginning of the year. As of the end of 2023H1, the asset management scale of BOC Securities still ranked third in the securities industry, but the company's asset management scale fell 11% from the beginning of the year, higher than the 9% decline in the total asset management scale of the entire industry. Considering the gradual progress of fund fee reduction reforms, if the company's asset management scale does not rise steadily, asset management business revenue may continue to decline.

Institutional finance and trading: The month-on-month decline in investment income accelerated, and the growth in the scale of investment banking business led to high income.

In the first three quarters of 2023, the company achieved net investment income plus fair value variable income of 234 million yuan, an increase of 24.15% over the previous year. On a quarterly basis, the total investment income of 2023Q1/Q2/Q3 was 96 million yuan, 91 million yuan, and 46 million yuan respectively. The total investment income of 2023Q2/Q3 companies continued to decline by 5% and 49% from month to month, and the pace of decline in Q3 increased significantly. Looking at the scale of investment, the company's investment assets expanded in 2023. As of the end of 2023Q3, the company's financial investment scale was 17.3 billion yuan, an increase of 32% over the beginning of the year. From a risk perspective, the company's investment risk exposure is still small: as of the end of 2023H1, the company's self-operated equity securities and derivatives accounted for 4.34% of net capital, and the ratio of self-operated fixed securities to net capital was 110.62%, significantly lower than the weighted average of 21.74% and 224.20% of comparable companies.

In terms of investment banking business, in the first three quarters of 2023, the company achieved net income from investment banking business of 157 million yuan, an increase of 119% over the previous year. On a quarterly basis, the net income of investment banks in 2023Q1/Q2/Q3 was 14 million million/132 million yuan /11 million yuan respectively. Higher revenue in the second quarter may be due to confirmation of revenue from previous investment banking projects. In terms of business scale, according to Wind's listing day statistics, the company's equity underwriting scale for the first three quarters was 4.53 billion yuan, compared to 2.05 billion yuan for the same period last year; the bond underwriting scale was 204.6 billion yuan, compared to 154.4 billion yuan for the same period last year.

Risk factors: A share turnover declined sharply; the company's credit business risks were exposed; the company's investment losses; the company's investment banking business development lagged behind; and the development of the wealth management market fell short of expectations.

Profit forecast: Considering factors such as market trading conditions and fund fee reduction reforms, we adjusted the Bank of China Securities 2023/2024 EPS forecast to 0.35/0.39 yuan (the original forecast for 2023/2024 EPS was 0.47/0.51 yuan), added the 2025 EPS forecast to 0.41 yuan; adjusted the Bank of China Securities 2023/2024 BVPS forecast to 6.18/6.56 yuan (the original forecast for 2023/2024 BVPS was 6.43/6.90 yuan), and added The 2025 BVPS forecast is 6.94 yuan. BOC International Holdings, the majority shareholder of BOC Securities, is a wholly-owned subsidiary of the Bank of China, and its degree of globalization and integration is at the forefront of the industry. The company is expected to leverage the collaborative advantages of “investment bank+commercial bank” to meet the comprehensive financial service needs of shareholders and related enterprises while also relying on shareholder resources to enhance its core competitiveness. The current PB of Bank of China Securities is 1.8 times, which is basically the same PB average as the four comparable companies Guolian Securities, Nanjing Securities, Caida Securities, and Huaan Securities.

The translation is provided by third-party software.


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