Summary of the report:
Shen Wanhongyuan released its monthly financial data bulletin on April 10, with a total operating income of 1.87 billion yuan in March, up 54.3% from the previous month, up 1.2% from the same period last year, and third in the industry; net profit was 970 million yuan, up 76.8% from the previous month, up 23.5% from the same period last year, and second in the industry. In 2019, the operating income was 24.593 billion yuan, an increase of 60.98% over the same period last year, and the net profit was 5.735 billion yuan, an increase of 37.86% over the same period last year.
Main points of investment:
The overall profitability has been enhanced and the business structure has been continuously optimized. Weighted ROE rose 1.22 percentage points year-on-year to 7.41 per cent. The business structure continued to be optimized, and US $1.16 billion of H-share financing was completed during the reporting period, further strengthening the international capital platform.
The outstanding performance of self-management has driven a high increase in institutional services and trading business income. Among them, the return on investment of FICC business exceeds the average of open-end pure debt funds by 11.1 percentage points, ranking in the 99.7% quantile; the market share of over-the-counter derivatives business is 12.3%, ranking in the top five of the cumulative scale industry.
The market warms up and improves the brokerage business, and the growth rate of the balance of finance and finance is not as fast as that of the market. The company's personal financial business achieved a net profit of 2.793 billion yuan in 2019, an increase of 54.43% over the same period last year. By the end of the reporting period, the balance of the two financial institutions was 51.71 billion yuan, and the market share dropped 0.6 percentage points to 5.05%, which was slower than that of the market. The balance of stock pledge financing decreased by 43.94% to 24.488 billion yuan compared with the same period last year, and the stock quality risk can be controlled.
Actively participate in the construction of Science and Technology Innovation Board, investment banking business in the forefront of the industry. In 2019, the company's investment banking revenue increased by 33% to 1.193 billion yuan compared with the same period last year. There are 6 M & A projects approved by the CSRC, ranking fifth in the industry; 493 local government debt underwriting projects have been completed, with an underwriting amount of 32.483 billion yuan, ranking fifth in the industry.
Income from active asset management continued to increase, and the size of public offering funds increased. The net income of the company's asset management business rose to fifth place in the industry, and the income from active management business increased by 11 percentage points to 86% compared with the same period last year. At the end of the year, the public offering management scale of Shenwanlingxin Fund, which is controlled by the company, and Wells Fargo Fund, which is the largest shareholder, were 76.2 billion yuan and 339.1 billion yuan, respectively.
Investment advice: during the reporting period, the company's investment banking and asset management business led the industry, and proprietary investment contributed to high performance growth. It is estimated that the earnings per share from 2020 to 2022 are 0.25,0.29,0.33 yuan respectively.
The investment evaluation of "increasing holdings" is given for the first time.
Risk hint: COVID-19 leads to the risk of market fluctuation; market competition intensifies.
