On December 25, 2023, the company issued an announcement to participate in the judicial auction of Pioneer Fund's shares to win 34.21% of Pioneer Fund's shares held by Joint Venture Group with 110 million yuan. Prior to this judicial auction, the company had already transferred 4.99% of the shares of Pioneer Fund held by Fuhai Enterprise Management Co., Ltd. and completed the registration of industrial and commercial changes on December 11, 2023. After winning shares in Pioneer Fund, the company plans to become the single largest shareholder of Pioneer Fund.
Pioneer Fund has a public fund license. As of September 30, 2023, Pioneer Fund's management scale was 3.43 billion yuan, of which 3.01 billion yuan was a bond-type fund. According to the Asian Federation Development Announcement and Wind, the management scale of Pioneer Fund at the end of 2020 was 1.70 billion yuan, of which the money market fund size was 1.29 billion yuan; the operating income for the year was 47 million yuan, and the net profit was -20 million yuan. Currently, the second largest shareholder of Pioneer Fund is Dalian Asia Union Investment Management Co., Ltd., which holds 33.31% of the shares; the third largest shareholder is Beijing Pengkang Investment Co., Ltd., which holds 22.51% of the shares.
The transaction helped the company form a new pattern of “two wings in one” business development with financial information services as the main body, securities services and public fund services, and the company's comprehensive wealth management capabilities continued to be strengthened. Furthermore, for Pioneer Fund, through the data advantages, technical advantages, and customer resource advantages that the company has accumulated over the years in the field of financial information services, it can provide Pioneer Fund with more comprehensive and accurate market analysis support, investment research support, and product sales channel support, helping Pioneer Fund to better perceive market trends, meet investment needs, and create a win-win situation for public fund companies and investors.
All sources of funding for this auction are the company's own funds. As of September 30, 2023, the company's monetary capital+transactional financial assets were $2.81 billion. We believe that participation in Pioneer Fund's equity auction will not adversely affect the company's finances and operations. Furthermore, with the marketing and promotion of the company's high-end products in the fourth quarter and the good progress of various businesses of McGo Securities, the company's business performance in Q4 '23 and the full year of '24 is still worth looking forward to. Combined with the external environment, 10-year US Treasury yields have begun to show a downward trend, and the country's determination to revitalize the capital market has not changed. We believe that the company's software and securities businesses are all expected to benefit from the active expectations of the capital market.
We maintained our revenue forecast for 2023-2025 at 11.1/16.3/23.1 billion yuan, a year-on-year increase of -9.9%/47.1%/41.5%; maintained net profit of 1.2/3.6/7.5 billion yuan, a year-on-year increase of -65.7%/211.3%/107.8%, corresponding to 197.6/63.5/30.6 times PE, maintaining a “buy” rating.
Risk warning
The restructuring of McGo Securities has fallen short of expectations; the fixed capital increase has fallen short of expectations; the current equity change still needs to be approved by the China Securities Regulatory Commission, so there is some uncertainty.