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招商证券(600999):机构生态初具 业绩优于同业

China Merchants Securities (600999): The institutional ecosystem is initially performing better than peers

國信證券 ·  Mar 29

China Merchants Securities released its 2023 annual report. In 2023, the company achieved operating income of 19.821 billion yuan, up 3.13% year on year; realized net profit of 8.764 billion yuan, up 8.57% year on year; weighted average return on net assets was 7.91%, up 0.37 pct year on year; basic earnings per share was 0.94 yuan/share, up 9.3% year on year. The company accelerates the pace of digitalization and promotes the transformation and development of wealth management and institutional business.

Increase wealth share, build an institutional ecosystem, and have obvious advantages in escrow, outsourcing, and private equity services. In terms of wealth management, in 2023, the assets of the company's custodian clients reached 3.72 trillion yuan; the number of individual clients of the company's wealth management increased 3.20% year on year, and the number of high-net-worth customers increased 5.67% year on year; the share share of equity trading volume rose to 5.23%; the share+hybrid and non-monetary market public fund holdings were 793 billion yuan and 94.9 billion yuan respectively, ranking in the top five in the securities industry. In terms of institutional business, the scale of escrow outsourcing reached 3.47 trillion yuan, an increase of 0.19% over the previous year; the market share in the number of private equity products managed reached 21.91%, ranking first for ten consecutive years.

With the implementation of new Internet diversion regulations, the company's brokerage business and share of wealth products are expected to maintain an upward trend.

The share of return on investment has increased, and self-operated business has improved the company's performance. In 2023, the company achieved investment income and fair value change income of 6.73 billion yuan, an increase of 31.57% over the previous year. As of the end of December 2023, the company's financial assets amounted to 374.604 billion yuan, up 21.42% year on year. In the future, it is expected that on-market derivatives trading, securities trading, and derivatives investment businesses will continue to be developed, valet business will be steadily promoted, traditional proprietary investment can interact with institutional business, and reduce investment risk exposure.

Investment banking business continues to be under pressure. In 2023, the company's investment banking revenue was 1.32 billion yuan, a year-on-year decrease of 6.5%.

In terms of equity financing, the IPO review continues to be stricter, and the overall scale of equity financing in the market has declined. The company was affected by the high IPO withdrawal rate and the decline in reserve projects. The company ranked 13th in the underwriting scale industry, with 26 IPO reserve projects, and 9th in the industry; the scale of debt financing increased slightly, and the market share increased.

The subsidiary was granted a public offering license, and the time was right to establish a public offering product system. In 2023, the net revenue from the company's asset management business was 713 million yuan, a year-on-year decrease of 13.97%; the total asset management scale of asset management was 294.854 billion yuan, a year-on-year decrease of 7.03%. In 2023, China Merchants Asset Management became the 13th brokerage asset management company to be approved for public funding. It is expected that in the future, it will continue to take advantage of the institutional ecosystem, accelerate the implementation of strategic products, and improve the public and private equity product line.

Investment advice: Based on the short-term impact on the company's business, such as the reduction in the company's commission rate and new regulatory policies, we lowered the company's profit forecasts for 2024 and 2025 by 15% and 19%, respectively, and predicted that the company's net profit due to 2024-2026 would be 9.75 billion yuan, 10.92 billion yuan, and 12.12 billion yuan, respectively, up 11.2%/12.1%/11% year on year. The PE corresponding to the current stock price is 12.2/10.9/9.8x, and PB is 1.0/1.0/0.9x. In the face of improved market activity, the company's core business advantage continued to be maintained, showing good development resilience, and maintaining an “increase” rating for the company.

Risk warning: valuation risk; risk of large profit forecasting bias; risk of large fluctuations in the secondary market; risk of changes in regulatory policies.

The translation is provided by third-party software.


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