2022-04-02 West China Securities Co., Ltd. Wei Tao, Luo Huizhou, and Lu Xiuhua conducted research on Guotai Junan and released a research report "Comment on 2021 Annual Report: Balanced Business Development, Public Offer Layout Starts Successfully". This report gave a buy rating for Guotai Junan, with the current stock price of 15.9 yuan.
Guotai Junan (601211)
Event Overview
Company released its 2021 annual report. During the reporting period, the company achieved operating income of 42.82 billion yuan, a year-on-year increase of 22%, and net profit attributable to shareholders of 15.01 billion yuan, a year-on-year increase of 35%; the weighted average ROE was 11.05%, an increase of 2.51pct year-on-year.
analysis and judgment:
proprietary brokerage revenue accounts for the highest proportion, and the management expense ratio has dropped significantly
revenue structure, securities proprietary business accounts for the highest proportion, at 27%, brokerage business and other businesses account for 22% and 23%, net interest income accounts for 13%, and investment banks, asset management, and equity investment accounts for 9%, 4%, and 1%, respectively.
From the perspective of incremental income contribution, securities proprietary business income contributed 31% of the revenue increase; commodity business income contributed 44%; investment banking, brokerage, equity investment and asset management business contributed 4%, 14%, 5% and 3% respectively; net interest income contribution was negative. The administrative expense ratio dropped significantly. In terms of administrative expenses/(operating income-other business expenses), the proportion was 42% during the reporting period, a year-on-year decrease of 2.9pct.
proprietary asset management has increased significantly, and the public offering layout has started smoothly
in 2021, a year-on-year revenue of securities proprietary business was 11.44 billion yuan, an increase of 26%. The company moderately increased its leverage, with investment assets reaching 353.7 billion yuan, up 11% year-on-year; annualized investment return rate was 3.55%, up 0.45% year-on-year. The company's trading investment insists on developing low-risk, non-directional businesses, steadily improves transaction pricing capabilities and customer service capabilities, and actively transforms into customer demand business and maintains rapid growth in business scale.
The era of major asset management is approaching, and the company is actively transforming and actively managing. In 2021, the company's asset management business revenue was 1.79 billion yuan, an increase of 16% year-on-year. The company's asset management accelerates the construction of an integrated investment and research system, strengthens the construction of the core talent team, and comprehensively expands market channels. The public offering transformation of the investment and research system has begun to show results. 6 new public offering products were issued throughout the year, with a scale of more than 6.5 billion yuan in funds raised. The products cover multiple categories such as index enhancement, bond type, hybrid type, FOF, etc. At present, the company's acquisition of 15% of Huaan Fund's equity has been approved by the China Securities Regulatory Commission. After this equity transfer, Guotai Junan's shareholding in Huaan Fund will increase from 28% to 43%, and the strategic layout of asset management business will be further improved.
Financial management and investment banks have grown steadily, and investment advisory business has developed rapidly in
During the reporting period, the company's brokerage business revenue was 9.51 billion yuan, an increase of 13% year-on-year. The stock fund trading market share was 4.23%, an increase of 0.06pct year-on-year (both excluded Shanghai Securities). The net income market share of the agency securities trading business is 5.86% (parent company's perspective), continuing to rank first in the industry. During the reporting period, the company's average monthly scale of financial products sold by agencies was 183.6 billion yuan, with a compound growth rate of 26% in the past five years. The company continues to improve the retail customer service system, strives to build a retail customer technology platform, continuously optimizes the collaborative cooperation mechanism of financial products, strengthens the standardization of branch office outlets and the professional construction of investment advisory teams, accelerates the high-quality transformation and development of wealth management, further consolidates the customer base, maintains the industry's leading position, and financial product sales and investment advisory business develops rapidly.
The investment banking business revenue during the reporting period was 4.06 billion yuan, an increase of 9% year-on-year. According to Wind data, the IPO financing scale was 30.28 billion yuan, with a market share of 5.02%, an increase of 0.43% year-on-year; the financing amount of refinancing and core bonds (company bonds, corporate bonds, ABS, convertible bonds and exchangeable bonds) was 33.52 billion yuan and 449.92 billion yuan, respectively, with a market share of 4.71% and 6.12% respectively. The company has deepened the reform of the business unit system, deepened its efforts in key industries, took root in key areas, focused on key varieties, and IPO made up for shortcomings has shown results, project reserves have increased significantly, and the "investment bank +" ecosystem has gradually taken shape.
Investment advice
Company fully implements the requirements of "integrated services, digital operations, international layout, and group control", and its operating performance has steadily improved, and the industry's leading position has been solid; while wealth management and asset management "two punches", innovative businesses such as derivatives have also grown rapidly, and the business structure has continued to be optimized.
Based on the better-than-expected market environment, we raised the company's forecast for revenue of 46.002/48.279 billion yuan in 22-23 to 52.56/64.41 billion yuan, and increased the 24-year forecast to 81.48 billion yuan, raised the 22-23 EPS of 1.74/1.80 yuan to 1.89/2.04 yuan, and increased the 24-year forecast value by 2.19 yuan, corresponding to the closing price of 15.90 yuan/share on April 1, 2022, with PB of 0.94/0.93/0.92 times respectively. Adjusted the company's "overweight" rating to "buy" rating.
risk warning
stock bond market fluctuates significantly and the self-operated investment income declines; the stock market fluctuates risks in stock pledge business; industry talent competition has led to a significant increase in management fees.
Securities Star Data Center calculates based on the research report data released in the past three years, the researcher team of China Securities Dai Zhifeng has conducted in-depth research on the stock, with the average prediction accuracy in the past three years as high as 91.92%. It predicts that the attributable net profit in 2022 will be 16.783 billion yuan, and the predicted PE based on the current price conversion is 8.46.
latest profit forecast details are as follows:
A total of 7 institutions in the stock have given ratings, 5 buy ratings, and 2 increase ratings; the average target price of institutions in the past 90 days is 21.27. Securities Star valuation analysis tool shows that Guotai Junan (601211) has a good company rating of 3 stars, a good price rating of 4.5 stars, and a comprehensive valuation rating of 3.5 stars. (Rating range: 1 ~ 5 stars, up to 5 stars)
or above content is compiled by Securities Star based on public information. If you have any questions, please contact us.
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