CITIC Securities (600030): Investment and investment bank contributions continue to benefit from registration reform

CITIC Securities (600030): Investment and investment bank contributions continue to benefit from registration reform

Guide to this report: In consideration of the company’s reduction in CITIC Construction Investment’s progress beyond expectations, the company’s profit forecast has been lowered.

The company’s investment banking and direct investment businesses have prominent advantages and will continue to benefit from deepening capital market reforms; leading companies should give estimated premiums and maintain overweight ratings.

Key points of investment: Maintain the “overweight” rating and raise the target price to 30.

4 yuan / share.

The company disclosed the performance quick report, and realized operating income / net profit attributable to mothers in 2019 of 431.

8/122.

900 million, previously +16.

0% / + 30.

9%, ROE 7.

8% for one year.

6pct; Q4 net profit 17.

700 million, -57% MoM, exceeding our expectations.

The growth of the company’s performance is expected to be mainly contributed by the two major business incomes of investment and investment banking. Considering that the company’s reduction in holdings of CITIC Construction Investment is gradually expected, we lower the company’s 杭州夜网论坛 EPS forecast for 2019-2021 to 1.

01/1.

21/1.

40 yuan (1 before adjustment).

19/1.

32/1.

56 yuan).

The amendment to the securities law has been implemented with a clear registration system. As a leader in the industry, the company is expected to benefit from the comprehensive deep reform of the capital market, which is expected to exceed expectations and raise its target price to 30.

4 yuan / share, corresponding to P / B 2 in 2020.

1X, overweight.

The difference between the net profit of the monthly report and the consolidated statement is expected to come from the influence of subsidiaries.

1) Excluding the dividend income of 2.5 billion subsidiaries in the company’s October monthly report, the net profit of the Q4 consolidated statement is less than the monthly report of the parent company3.

800 million, the difference is expected to be mainly affected by the dividends of other subsidiaries and the performance of subsidiaries is not up to expectations.

2) According to the announcement of CITIC Construction Investment, the company reduced its holding of CITIC Construction Investment from July 17 to October 14, 19.

577% of shares, no further reductions until January 10, 2020, the progress of reductions is gradually expected.

It is expected that the investment and investment banking business will contribute the main performance increase, and the brokerage and asset management will increase slightly several times.

1) Benefiting from the science and technology board, it is expected that the company’s investment bank and direct investment business income will increase significantly in 2019.

In 2019, the company’s IPO / refinancing (including convertible bonds) / debt commitment scales were +255% / + 47% / + 19%, 9 out of 28 IPOs of 9 science and technology board projects.Fair change gains and losses) 10 years + 73%.

2) The company’s brokerage business structure is diversified and the scale is expanded. Huaxia Fund’s 19-year revenue growth + 7%. CITIC Asset Management actively expanded the management scale. It is expected that the company’s brokerage and asset management business revenue will increase slightly in 19 years.

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.