China Merchants Securities (600999) Third Quarterly Report of 2019: Net Profit Reduction + 57% Improvement of Employee Stock Ownership

China Merchants Securities (600999) Third Quarterly Report of 2019: Net Profit Reduction + 57% Improvement of Employee Stock Ownership

Event China Merchants Securities released the third quarter report of 2019.

In the first three quarters of 2019, the company achieved operating income of 128.

99 trillion, +65 ten years ago.

56%; realized net profit attributable to mother 48.

24 ppm, +57 a year.

03%, with an expected average return on equity of 6.

27%.

As of the end of the third quarter of 2019, the company returned to its parent shareholders’ equity 834.

170,000 yuan, +3 from the beginning of the year.

34%; BVPS 10.

21 yuan / share.

The brief evaluation results were in line with expectations, and the investment income was dazzling.

(1) In the third quarter, the company realized operating income of 43.

5.9 billion, up from +45.

04%; net profit attributable to mother 13.

21 trillion, ten years +4.

41%; The growth rate of operating income is higher than the growth rate of net profit, mainly due to the substantial increase in revenue from the commodity trading business with low gross profit margin.

(2) According to the income statement caliber, in the first three quarters, brokerage / investment bank / asset management / index / investment income accounted for 24% / 9% / 6% / 11% / 37% of total operating income, respectively.

The brokerage business trades for price, and the investment banking business benefits from IPOs and debt commitments.

(1) In the first three quarters, the company realized net income from brokerage business24.

19 trillion, +23 a year.

99%, the previous market-wide stock base transaction amount is +34 per year.

19%, the company’s brokerage business net income growth rate is not as fast as the industry stock base transaction growth rate, the commission rate decline is the leader.

On its own, the company’s market share in the first half of the year was 3 from the same period last year.

91% increased to 4.

14%, maintaining an upward trend.

(2) In the first three quarters, the company realized net income from investment banking business24.

19 trillion, ten years +13.

57%, mainly due to the increase in the amount of IPOs and debt commitments.

According to Wind statistics, the company achieved a total of 91 IPO underwriting amounts in the first three quarters.

1.5 billion, +38 a year.

32%; realized refinancing underwriting amount of 260.

750,000 yuan, at least -11.

02%; the amount of debt underwriting reached 2,950.

57 trillion, +12 for ten years.

51%.

The asset management business continued to transform, with both investment volume and price rising.

(1) In the first three quarters, the company realized net income from asset management business7.46 ‰, at least -14.

61%, mainly due to the decline in the scale of channel business and active management transformation.

(2) In the first three quarters, the company realized investment income + income from changes in fair value47.

91 trillion, ten years +104.

92%, mainly due to the increase in both the size of financial assets and investment yields. At the end of the third quarter, the total size of financial assets was 1896.

310,000 yuan, +26 from the beginning of the year.

14%, the return on investment in the first three quarters rose to 2.

82%.

The credit business is open source to expand the flow, and the impairment accrues multiple reductions.

In the first three quarters, the company realized net interest income14.

75 ppm, ten years +0.

31%, mainly due to the simultaneous increase in interest income and interest expenses; accrued credit impairment losses of 0.

69 ppm, 0 from the same period last year.

97 ppm, mainly due to the mitigation of the default risk of stock pledges.

As of the end of the third quarter, the company’s monetary funds were 611.

19 trillion, +28 from the beginning of the year.

85%; fund balance of 512.

44 trillion, +19 from the beginning of the year.

24%; buy-back financial assets 323.

73 trillion, earlier -0.

02%.

The earliest, the company should deal with bonds and +22 for short-term financing bonds.

77%, 6.

83%.

Employee shareholding plans improve governance mechanisms.

The company issued an employee shareholding plan in October 2019. It is intended to provide no more than 10% of the company’s share capital to no more than 1157 company directors, supervisors, senior management personnel, level D and above personnel, and other core employees., The total subscription amount does not exceed RMB 8.
.

08, 000 yuan, the subscription price is in principle equal to the previous average repurchase price.

This will help to establish and improve the mechanism of benefit sharing and risk sharing between shareholders, the company and employees, and attract and retain outstanding talents and business backbones, so as to better promote the company’s 南宁桑拿 long-term development.

Investment suggestion: “Buy” rating.

The performance of the securities brokerage sector in 2019 will continue to benefit from the easing of liquidity and the catalysis of capital market reforms. The long-term market is worth looking forward to; the industry’s supply-side reforms continue to advance, and the capital strength is reduced (net assets rank 6th in the industry at the end of the first half of 2019). Wind controlChina Merchants Securities, which has a complete degree (achieved Class A and A rating from the China Securities Regulatory Commission for 10 consecutive years), and improved innovation capabilities (wealth management, main brokers, and product creation businesses are gradually leading the way) will be one of the beneficiaries.

We expect China Merchants Securities to have a BVPS 武汉夜网论坛 of 10 in 2019-2020.

24 yuan, 10.

98 yuan, corresponding to the current expected PB of 1.

60 times, 1.

49X, give “Buy” rating.

Risk warnings: stock market recovery fails to meet expectations; marginal easing of monetary and credit policies fails to meet expectations; capital market reform progress does not meet expectations.