Huatai Securities (601688) March 2019 Commentary: Science and Technology Board Drives Surpassed Expected Investment and Investment Banking Revenue Increases MoM
This report reads: The company’s GDR conversion exceeded 50%, and the dividends were basically released; the science and technology board significantly boosted the company’s direct investment and investment bank revenue in the third quarter, and the company’s investment bank has outstanding international business advantages. It will continue to benefit from the capital market reform and opening up and value-added holding.
Investment Highlights: Maintain “Overweight” rating and maintain target price of 29.
87 yuan / share, corresponding to 19P / B 2.
The company’s operating income for the first three quarters / net profit attributable to its parent was 177.
400 million, previously +41.
8% / + 43.
8%, return on equity 5.
83%, ten years +0.
95pct; Q3 returns to net profit of the mother 23.
800 million, +86.
6%, 6 more than the monthly report.
700 million, exceeding our expectations.
Looking at the month-on-month comparison, the third-quarter incremental performance was mainly contributed by investment income and investment bank income, and the science and technology board significantly boosted the company’s direct investment and investment bank revenue.
Maintain the company’s EPS forecast for 2019-21 to 0.
The company’s investment bank has outstanding international business advantages and the science and technology board layout is leading in the industry. It will continue to benefit from the reform and opening up of the capital market. The company currently has 19P / B1.
3 times the increase.
Investment and investment bank revenues have grown strongly, and the market share of the retail business is expected to grow steadily.
1) The company’s Q3 brokerage business income was -12 from the previous quarter.
8% (market share base turnover -13.
At the end of the period, the amount of securities traded at the end of the period was flat, and the scale of the two financial institutions was +6.
5% (market +4.
2%), the company’s retail business market share maintained an upward trend.
2) The company’s investment bank income in the third quarter6.
0 billion, + 68% month-on-month, Wind shows that in the third quarter, the company issued 4 single shares for the first time to reorganize the science and technology board project, and the refinancing raised the amount of funds to increase more than three times.
3) In the third quarter, self-operated investment income and associate investment income were 25.
2 billion / 8.
700 million, +12.
900 million / + 7.
600 million, the listing of science and technology board projects led to a substantial increase in the company’s related investment income.
4) In the third quarter, the company’s asset management revenue was + 15% month-on-month, compared with + 19% in the past, maintaining a rapid growth momentum.
5) At the end of the period, the company repurchased financial assets under resale at -34% MoM to 17.7 billion, and the scale of equity pledge continued to drop.
GDR conversion exceeded 50%, and a 都市夜网 pressure was basically released.
The company disclosed that as of October 24, the company had 3,987 GDRs, which was less than 50% of the initial issuance. At the same time, it closed the closing on October 29, and the company’s A shares were 1 premium to GDR.1%, we think the GDR has released too much previous pressure on A shares.
Catalysts: The implementation of capital market reform and innovation policies; increased market activity.
Risk warning: the stock market has fallen sharply; industry supervision has become stricter.