Main points of investment: the only legal person securities company in Henan Province, AqiH has greatly improved its listing and financing capacity in both places, reformed all aspects of each line, and adhered to a high dividend rate. The reasonable value range is 4.34-4.91 yuan, maintaining the "neutral" rating.
[event] Zhongyuan Securities achieved operating income of 3.1 billion yuan in 2020, + 30.8% year-on-year, and net profit of 100 million yuan, + 79.1% compared with the same period last year, corresponding to 0.02 yuan of EPS and 0.93% of ROE. In the fourth quarter of 2020, the operating income was 890 million yuan, + 131.1% compared with the same period last year, and the net profit was 20 million yuan, turning losses into profits compared with the same period last year. In 2020, brokers, investment banks, asset management, interest and self-management accounted for 25%, 7%, 2%, 3% and 16% of operating income, respectively.
The substantial increase in net profit for the full year was mainly due to the strong performance of the brokerage business and a significant reduction in interest payments.
Deep ploughing the local market, multi-channel coordinated development. In 2020, the brokerage income reached 790 million yuan, + 52.7% compared with the same period last year.
In the whole year, the total transaction amount of the company's stock fund was 1.9 trillion yuan, with a market share of 4.31 ‰. The balance of the company is 7.19 billion yuan, which is + 30.1% compared with the same period last year. The principal of the stock pledge repurchase business in the table is 1.71 billion yuan, which is-16.0% compared with the same period last year. The company's brokerage business deeply ploughs the Henan market, focuses on customer operation, actively grasps the new opportunities for deepening the development of the capital market, and promotes the integrated layout of online and offline. The total number of securities brokerage clients is 1.7697 million, which is + 14.77% compared with the same period last year.
Continue to expand non-provincial markets and reserve high-quality project resources. In 2020, the investment banking business income reached 210 million yuan,-16.2% compared with the same period last year. The underwriting scale of stocks and bonds is + 4.5% and + 52.5% respectively compared with the same period last year. The main underwriting scale of equity is 11.03 billion yuan, ranking 27th. There are 5 refinancing companies with an underwriting scale of 9.62 billion yuan. The main underwriting scale of bonds is 14.74 billion yuan, ranking 64th, of which corporate bonds, financial bonds and local government bonds are 11.05 billion yuan, 1.67 billion yuan and 1.22 billion yuan respectively. There are 23 IPO reserve projects, ranking 30th, 3 on the main board and 8 on the gem.
Actively respond to the new regulations on asset management, steadily improve the level of investment in research, and increase investment in standardized product design. In 2020, the asset management income was 50 million yuan,-27.3% compared with the same period last year. By the end of December 20, the total size of the company's asset management business was 6.3 billion yuan,-17.3% compared with the same period last year, of which the collective asset management scale was 4.6 billion yuan,-9.1% year-on-year; the targeted asset management scale was 1.1 billion yuan,-40.8% year-on-year; and the special asset management scale was 600 million yuan,-14.2% year-on-year. The company's asset management business conscientiously implemented the requirements of the new asset management regulations, accelerated the rectification and reform of existing asset management products, enhanced the ability of active management, and safely started the issue of standardized new products.
The investment strategy will be adjusted in time to reduce the impact of the epidemic and market fluctuations, and the income will be improved again. In 2020, the net income on investment (including fair value) was 500 million yuan,-30.2% compared with the same period last year. The investment income (including fair value) in the fourth quarter was 130 million yuan, which was + 299.9% compared with the same period last year. Under the background of market fluctuations affected by the epidemic at the beginning of 2020, the company adjusted its strategy in time to reduce the scale of its business by entrusting investment, participating in private placement and stock investment. 2020H2 performance gradually improved and some losses were recovered. Fixed income investment timely adjust positions, increase trading spreads and valuation changes in returns, seize the two rounds of rising market opportunities in the bond market, and obtain sustained and stable income.
[investment suggestion] We expect the company's net profit per share from 2021 to 2023E to be 0.03,0.03 and 0.03 yuan respectively, and its net assets per share to be 2.89,2.91,2.92 yuan respectively. Taking into account the effectiveness of the company's digital transformation, investment banking business continues to expand outside the province, a number of businesses have growth potential. In addition, the company listed on the stock market, completed 3.6 billion yuan of A-share non-public offering financing in July 2020, and is expected to accelerate the growth of capital consumption business. We give it slightly higher than the industry average valuation level, and give it 1.5-1.7x Pmax B in 2021, corresponding to a reasonable value range of 4.34-4.91 yuan, maintaining a "neutral" rating.
Risk hint: the continued downturn in the market has led to a decline in the scale of business, and market supervision has been further strengthened.