Events:
Nanjing Securities released its semi-annual report of 2018, with operating income of 637 million yuan in the first half of the year, down 6.3% from the same period last year, and net profit of 186 million yuan down 23.17% from the same period last year. The total assets were 255.482 billion yuan, an increase of 8.43% over the end of last year, and the rights and interests belonging to the shareholders of the parent company were 10.498 billion yuan, an increase of 5.7% over the end of last year.
Comments:
Investment banking is growing rapidly. In the first half of 2018, the amount of A-share IPO financing fell 26.4 per cent compared with the same period last year, and the amount of private placement fell 45.41 per cent compared with the same period last year. In the relatively depressed primary market environment, the company co-sponsor (main underwriter) 1 IPO, complete 2 refinancing projects, complete the new third board recommended listing 1 single, assist 7 listed enterprises to carry out additional financing, as the lead underwriter to complete the non-public issuance of corporate bonds project 2, as the co-lead underwriter to complete the public issuance of corporate bonds project 2. The operating income of the investment banking business reached 83.8 million yuan, an increase of 104.75% over the same period last year.
The revenue of brokerage business is stable, focusing on Jiangsu and Ningxia. The operating income of the brokerage business reached 512 million yuan, a slight decrease of 1.5% over the same period last year, and the income was relatively stable. The traditional brokerage business is still the main source of income for Nanjing Securities, accounting for 80% of the revenue in the first half of the year. As a local securities firm headquartered in Jiangsu, the company has an early layout in the province and has a good customer base in Jiangsu. In addition, the company also has a deeper and wider layout in Ningxia.
The network covers most prefecture-level cities in Ningxia. The company maintains the first place in Ningxia in terms of the number of securities business departments, stocks, fund transactions, the number of securities brokerage clients, securities brokerage business income, custodian client assets and other indicators.
Affected by the market environment, revenue from proprietary business and asset management business declined, dragging down the company's revenue. In the first half of the year, the company's operating income from its own business reached 58.3453 million yuan, a decrease of 57.89 percent over the same period last year. The operating income of the asset management business reached 29.9749 million yuan, a decrease of 9.57% over the same period last year. The decline in proprietary business is mainly affected by the A-share market, and the decline in revenue from asset management business is related to the general environment such as supervision. Self-equity securities and securities derivatives / net capital was 5.07%, an increase of 0.96% over the end of last year, while self-equity securities and their derivatives / net capital was 81.75%, an increase of 23.91% over the end of last year. The new self-financing mainly allocates bonds and other non-equity products, and the company's self-management style is relatively stable.
Investment advice: the short-term market is constantly positive in the near future, the non-silver plate is at the bottom of the valuation for a long time, and its value is highlighted in the market rebound. Nanjing Securities, as a secondary new stock of a securities firm, is more flexible, and its financial strength is enhanced after listing, and its future development is expected. Maintain the "buy" rating, and investors are advised to pay attention.
Risk hints: risks caused by fluctuations in the secondary market, risks brought about by policy changes, and so on.