CITIC Securities (600030): M & A Incentives Two-Pronged Brokerage Leader
Event: In 2018, the company achieved operating revenue of 37.2 billion (YoY-14%; Guojun-4.
6% / Haitong notice -16%), net profit attributable to mother is 940 thousand yuan (Monarch-32% / Haitong notice-41%), average ROE 6.
2% (Monarch 5.
4% / Haitong notice 4.
4%), the corresponding leverage ratio rose to 3 after excluding customer margin.
63 times (2017: 3.
We believe that the company’s highlights include: (1) the brokerage business is rooted in institutional customers, the transaction market share has steadily increased, and the commission rate can be maintained at a high level; (2) the company’s investment banking capabilities, institutional customer resources and capital strength advantages are obvious, and it is expected thatBusinesses such as institutional sales and direct investment will benefit from the science and technology board policy; (3) Self-operated transitional trading investment banks, launching significant market effects of strategic effects and high ROE characteristics of derivatives market making business, which is expected to significantly improve the company’s overallProfitability; (4)) It is planned to merge and acquire Guangzhou Securities and formulate an employee incentive plan. It is expected that the company can continue to strengthen its capital and business strength at a reduced cost, and expand its leading edge in the industry.
Brokers: Rooted in institutional clients, the market share and commission rate both rose.
The company’s net income from securities business (including seat leasing) decreased by 9% year-on-year, which was better than the industry level (YoY-27%, Monarch-23%).
The company adopts the development strategy of key service agencies and high-net-worth customer transaction service and wealth management needs, and its customer base and service capabilities are prominent.
In 2018, the large securities firm China Taijunan, Shenwan Hongyuan and CITIC Construction Investment all experienced a certain amount of trading volume, but the market share of CITIC Securities’ stock-based trading volume6.
09%, an increase of 0 from 2017.
46%, reflecting the market trend of concentrated leading; the existing company’s brokerage business (including seat lease) net commission rate rose to 5 ten thousandths.
5 (4 / 10,000 in 2017.
We expect the average daily stock-based trading volume in 2019 to maintain a level of more than US $ 600 billion, and the company’s stock-based trading volume market share will steadily increase to 6.
15%, the commission rate may face some pressure to reduce (substitute 4 ten thousandths.
8), one year brokerage business income is forecast to grow by 40% per year.
Credit transactions: Liangrong’s stock quality income is stable, and impairment expectations are flushed back.
The company achieved a net interest income of US $ 2.4 billion, an annual increase of 1% (industry-27%, monarch + 2%).
Among them, the interest income of Liangrong and fair interest on pledge dropped by 1% and 2%, respectively.
In 2018, the balance of equity pledged financing funds has decreased by 51% to US $ 38.5 billion (Monarch 383 trillion, -50%). Through regulatory policies to resolve equity pledge risks and the gradual recovery of the secondary market, some of the company’s asset impairment provisions are expected to be offsetreturn.
Investment bank: The business advantage is obvious, benefiting from the introduction of the science and technology board policy.
The company’s investment bank revenue was US $ 3.6 billion, a year-on-year decrease of 17% (industry-27%, monarch-26% / China Construction Investment 6%).
The company has rich reserves of high-quality projects, outstanding investment banking capabilities, a solid institutional customer base and leading capital strength. It 杭州桑拿网 is expected that the company’s investment banking, direct investment, and institutional sales will all benefit from the introduction of the science and technology board policy.
Self-employed: transformational transaction investment bank.
The company’s self-employed business income was 8 billion US dollars, a 37% decrease every year. The growth in performance was related to the downturn in the stock market and the above-mentioned focus in the fourth quarter of 2017 to form a high base effect.
In the future, the company will transform into a trading and investment bank and realize derivatives market-making business with significant door biological effects and high ROE characteristics, which is expected to significantly improve the company’s overall profitability.
Asset Management: Active transformation has 上海夜网论坛 advantages.
In 2018, the company’s asset management revenue was US $ 5.8 billion, an increase of 2% year-on-year (industry -11%, monarch -16%), of which fund management revenue was US $ 4.1 billion, an increase of 9% year-on-year.
The company’s active management scale is in a leading position in the industry. At the end of 2018, the company’s active management scale was US $ 552.8 billion, maintaining the number one in the industry, and its proportion rose to 41% (2017: 35%).
It is planned to purchase the Guangzheng to make up for the shortcomings, and employee shareholdings show confidence.
The company intends to issue shares to acquire Guangzhou Securities. After the completion of the acquisition, the company will supplement the company ‘s South China network with shortcomings at low prices (1.
2xPB) to obtain high-quality assets and expand the leading edge of the industry.
At the same time, the company’s employee shareholding plan, referring to Guoyuan and Industrial, refers to the gap between employee shareholdings of CITIC Securities but not comprehensive coverage. For key employees, the overall cycle is continuous and the lock-up period is shorter, which promotes employee motivation and also demonstrates consensus and confidence.
Investment advice: Buy-A investment rating.
In 2019, we are optimistic about the fundamental rebound of securities stocks, and the negative factors in the market are expected to be gradually digested; CITIC Securities will continue to lead the trend of centralization under the trend of upgrading the capital market, shape the core competitiveness with intelligent gates, and maintain its advantage in market competition.The copyright must estimate the premium bonus.The company’s EPS for 2019-2021 is expected to be 1.
15 yuan, 1.
31 yuan and 1.
5 yuan, giving the company a 2xPB estimate, raising the 6-month target price to 28.
Risk reminder: risk of severe contraction of trading volume / risk of equity mortgage default / risk of policy change