Month: April 2020

China Merchants Securities (600999) Company Annual Report Commentary

China Merchants Securities (600999) Company Annual Report Commentary

Investment points: The PB business remains the industry’s No. 1 for a long time. The 合肥夜网 scale of corporate bond investment is high, the initiative management capability is leading, and the profit growth rate exceeds that of its peers.

Reasonable value range 17.


05 yuan, maintain the “preliminary market” rating.

[Event]China Merchants Securities achieved an operating income of 11.3 billion yuan in 18 years, -15% for half a year; a net profit of 4.4 billion yuan, -24% per year; corresponding to EPS 0.

54 yuan (display value, consider perpetual debt).

In the fourth quarter, it realized operating income of 3.5 billion US dollars, -8% per year; net profit attributable to mothers was 1.4 billion US dollars, -16% per year.

Credit impairment losses were initially accrued1.


In 2018, brokerage / underwriting / asset management / index / self-employment accounted for 28% / 13% / 11% / 16% / 19% respectively.

Comprehensively transform the wealth management platform; PB business has maintained industry first for many years.

In 18 years, it achieved 3.2 billion brokerage income, twice -22%.

The share-based trading volume accounted for 3.


As of the end of December, the balance of the two financial institutions was 38.7 billion, with a market share of 5.

12%, a reduction of 0 per year.

21 units.

The undecompressed market value of stock pledges was US $ 202.6 billion, + 22% from the end of the previous 17 years and + 5% from the mid-18 years; the balance of financial expenditure on own capital was US $ 22.8 billion.

The PB business continued to lead the industry, with 18,465 expansion products in hosting, + 13% per year, and a hosting scale of $ 1980.2 billion, 5% per year.

The company has a leading edge in serving very large (more than US $ 5 billion) private equity securities managers; private equity fund custody expanded the number and size of products, and public equity fund custody maintained the first in the industry for five consecutive years.

Getting ready, investment banks will focus on the “new economy”.

18 years to achieve investment bank income of 1.4 billion US dollars, the whole year -34%.

The stock and debt underwriting scales are -29% and + 22% each year, respectively.

Equity lead underwriting scale of 40.3 billion; 8 of which were IPOs, with an underwriting scale of 7.9 billion, ranking fifth; 11 refinancings, with an underwriting scale of 17.8 billion.

The underwriting scale of bonds was 4281 trillion; the underwriting scale of corporate bonds and corporate bonds reached 66.8 billion and 1.9 billion yuan, respectively.

The IPO reserve project is rich, with a total of 111, 7 main boards, 9 small and medium boards, and 7 GEM.

The entire layout, focus on efforts, and actively promote the scale of management.

In 18 years, the income from asset management reached 1.2 billion, an increase of + 5%.

The scale of China Merchants asset management was 713.5 billion yuan, -8% year-on-year; of which, the scale of active management was 231.3 billion yuan, exceeding + 82%.

The management scale of Boshi Fund is USD 863.9 billion, of which the public offering scale is 5568 ppm, and the non-monetary public offering fund ranks first.

The scale of China Merchants Fund management is 4,937 trillion, of which the public offering scale is 3832 ppm, and the non-monetary public offering fund ranks 8th.

The adjusted net investment interest rate is 21%.

The company’s accounting standards have been adjusted to take into account other claims and 1.2 billion interest income on debt investment. In 18 years, it realized a net investment income of 3.3 billion US dollars, an increase of + 16%.

In 18 years, the company’s directional investment business income has declined, and it has actively carried out neutral investment business through quantification and hedging, and obtained stable excess returns with low risk returns.

The yield on bond investment outperformed the ChinaBond Comprehensive Wealth Index.

Investment suggestion: We expect the company’s EPS for 2019-21E to be 0.


86/0.93 yuan, BVPS is 10 武汉夜生活网 respectively.



17 yuan.

Considering that the company’s investment bank reserves are abundant, the scale of active management has been significantly improved, and the PB business has been leading the industry for many years, we give it a P / E ratio of 24-26 times in 2019, which is equivalent to a reasonable value range of 20.


58 yuan; or give it 1 in 2019.


8 times PBR, corresponding to a reasonable value range of 17.


05 yuan; sum up to give a reasonable value range 17.


05 yuan, maintain the “preliminary market” rating.

Risk reminder: The transaction volume continues to decline, and the growth of the equity market causes the investment income to continue to decline.

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