Haitong Securities (600837) 2019 First Quarterly Report Review: Investment Business Flexibility Reveals Credit Business Risks Effectively Relieved

Haitong Securities (600837) 2019 First Quarterly Report Review: Investment Business Flexibility Reveals Credit Business Risks Effectively Relieved

This report reads: The rebound in the market has led to the release of the company’s investment business elasticity. If the subsequent liquidity is expected to improve, the company’s performance flexibility can be improved; the short-term securities firm’s largest catalyst comes from the market beta.

Investment Highlights: Maintain “Overweight” rating and raise target price to 17 due to better-than-expected results.

56 yuan / share, still corresponds to January 2019.

6 times PB.

The company’s 2019Q1 achieved revenue / net profit of 99.

54/37.

70 trillion, +74 for ten years.

48% / + 117.

66%, ROE 3.

14%, the net assets of the mother is 1226.

490 thousand yuan before the end of 2018 +4.

06%, exceeding expectations.

Considering that the first-quarter report performance exceeds expectations, the company’s EPS for 2019-2021 is raised to 0.

77/0.

91/1.

12 yuan (0 before the increase).

68/0.

78/0.

94 yuan).

At present, the largest catalyst for the brokerage sector comes from the market beta. At the current estimated level, the sector beta attributes are stronger than the industry’s high growth and policy dividends.

The significant recovery in the market has led to the rapid release of the elasticity of investment business, and the pressure on credit loss caused by market growth has been severely relieved. If the subsequent liquidity is expected to improve, the company’s self-operated 苏州桑拿网 elasticity will further increase its room for improvement.

① The elasticity of investment business is greatly released: the report increases investment income by +268.

8%, revenue accounted for 49.

0%, directional investment in equity is expected to be the main force for performance contribution; ② The company’s increase in credit impairment losses in the first quarter of 2019 was only 2.
.

Through the market recovery and gradual improvement of corporate credit, the credit risk of the company’s stock pledge and financial leasing business has been effectively mitigated, and it has continued to improve gradually. ③ Reported that the net income of the brokerage business increased by +6.

73%, the previous stock’s trading volume +20 per year.

At 7%, the elasticity of the brokerage business has decreased. It is expected 杭州桑拿网 that the commission rate will further decline as the market picks up.

According to the latest announcement, the company’s refinancing plan of no more than 20 billion has been confirmed by Shanghai Guosheng Group and four existing shareholders to subscribe in large amounts, of which Shanghai Guosheng intends to subscribe for 10 billion, and the other three intend to subscribe for no more than 4.8 billion.It is confident that after the successful issuance, the company’s capital strength and comprehensive competitiveness will be greatly enhanced.

Catalysts: The launch of relevant innovative businesses; increased market activity; loosening of regulatory policies.

Risk reminders: Innovation falls short of expectations; stock market drops sharply; industry regulation strengthens