GF Securities (000776): 3Q investment returns improved to promote sequential improvement in performance
3Q19 results are in line with expectations. GF Securities announced 3Q19 results: revenue growth + 53% to $ 17.4 billion, net profit growth attributable to mother + 37% to $ 5.6 billion, corresponding to the return on net assets during the reporting period+1.
6ppt to 6.
4%, basically in line with our expectations.
In the third quarter of 19, the net profit attributable to the mother in a single quarter exceeded + 18% / mom + 21% to US $ 1.5 billion, corresponding to a single quarter return on net assets +0.
2ppt / ring ratio + 0.
3ppt to 1.
Excluding other business income in the total revenue, the adjusted management fee rate growth rate is -1.
8ppt / ring ratio + 4ppt to 50.
8%; the company’s ending leverage ratio is -0.
2x to 3.
Development trend Investment business is the main driver of performance boost.
The company’s 3Q investment income had previously turned losses / mom + 96% to 12.
200 million, 杭州夜网 accounting for 28% of adjusted revenue, corresponding to the size of transactional financial assets exceeding -9% / -5% to 82.6 billion, annualized investment return rate +3.
0ppt to 5.
The company’s total financial assets at the end of the period + 2% in the first half of the year were flat at 190.9 billion, accounting for 50% of total assets.
In addition, 3Q credit impairment eased (3Q19: 9.79 million yuan vs.
Q2 19: 3.
300 million) or benefit from the improvement in the impairment of debt and other debt investments.
Equity financing drove a quarter-on-quarter improvement in investment banking business.
3Q investment bank income + 3% per annum / + 72% to 3 per annum.
700 million, accounting for 8% of adjusted income.
The market share of the main underwriter of the stock market for ten years.
1ppt / ring ratio-2.
1ppt to 0.
95%, bond underwriting market share for two years.
2ppt / ring ratio-0.
1ppt to 1.
5% (Wonder Statistics).
At present, the company has completed the listing of one science and technology board, seven of which are queuing (four of which have already passed the conference), accounting for four of the companies that have been listed.
Asset management business continued to decline.
In the third quarter of 19, asset management revenue was -5% / month to -23% to 8%.
500 million, accounting for 17% of adjusted revenue, the performance is weaker than the industry (the industry is flat, ranking 10% sequentially).
The brokerage business is converging with the industry.
3Q brokerage income is + 31% / mo from -15% to 9 per annum.80,000 yuan (vs.
Market transaction quota + 50% / 13% MoM), accounting for 22% of adjusted income, accounting for less than the industry average; it is expected that the marginal commission rate may still have downward pressure.
The scale of stock pledges has been reduced, and the balance of the two financings has increased.
3Q net interest income was -24% / QoQ -11% to 7.
600 million, of which: 1) Financing funds + 14% MoM to 50.8 billion (expected city share +0.
3%); 2) Buyback and resale financial assets, including the balance of stock equity, fell significantly by 36% to 18.6 billion (vs.
The balance of stocks in the market brokers’ balance sheet is -8.
Earnings Forecast and Estimate The company is currently trading in January 19th.
2x / 20 years 1.
1x P / B.
Maintain earnings unchanged, maintain neutral rating and target price.
51 yuan, corresponding to 19e 1.
3x / 20e 1.
2x target P / B and 12% upside.
The amount of risky transactions dropped significantly, the stock / bond market fluctuated significantly, and progress in capital market reform was gradually expected.