China Galaxy (601881): Brokerage Revenue Ranks Top to Accelerate Channel Network Conversion

China Galaxy (601881): Brokerage Revenue Ranks Top to Accelerate Channel Network Conversion

Investment points: Strengthen quantitative trading platforms, PB systems, etc., and optimize customer structure; regional coordinated development and integration strategy; vigorously develop “enterprise-centric” service-oriented investment banking business; actively manage the proportion of revenue to continue to rise and return to the transformation of capital managementobvious.

Reasonable value range 11.

74-12.

43 yuan, maintain the “excellent than the market” rating.

[Event]In the first half of 2019, China Galaxy realized an operating income of US $ 7.4 billion, every + 71%; a net profit of US $ 2.6 billion, + 98% per year; corresponding to EPS 0.

26 yuan.

In the second quarter, the operating income was 3.7 billion yuan, + 117% for the whole year, -1% MoM; the net profit attributable to mothers was 1.1 billion yuan, + 258% per year, -31% MoM.

In the first half of 2019, brokerage / underwriting / asset management 南京夜网论坛 / index / investment income accounted for 33% / 3% / 4% / 22% / 29% of operating income, respectively.

Two-wheel drive, coordinated development and top brokerage revenue.

19H1 achieved brokerage income of $ 2.4 billion, + 24% for the full year.

The company is dominated by retail customers. The number of securities brokerage customers is 10.84 million, of which institutional and product customers1.

650,000 households.

The company’s consignment of financial products business continued to implement centralized and unified management, coordinated by the product center, and established a vertical business echelon from headquarters to branches and business departments to promote the company’s wealth management transformation.

In the first half of the year, we realized net income from consignment of financial products2.

600 million, ranking third in the industry.

It sold 47.3 billion financial products, ranking third in the industry.

As of the end of June, the company’s financial product holdings were 117.4 billion, adjacent + 16%.

Regional coordinated development integration strategy, vigorously develop “enterprise-centric” service-oriented investment banking business.

19H1 realized underwriting income of 3 trillion, -23% a year.

The scale of underwriting of stocks and bonds is -18% and -33% each year.

The scale of equity underwriting was 74 trillion; 2 of them were refinancing and the scale of underwriting was 17 trillion.

The scale of bond underwriting was 30.4 billion, ranking 23rd; the underwriting scale of corporate bonds, financial bonds, and local government bonds reached US $ 4, 105, and 2.4 billion, respectively.

The company has 17 IPO reserve projects, ranking 32nd, including 1 main board, 1 small and medium board, and 1 science and technology board.

The proportion of active management income continued to rise, and the return to the origin of asset management was clearly transformed.

19H1 realized asset management income of 30,000 yuan, -15% per year.

Yinhe Jinhui’s entrusted management scale is 2406 trillion, of which -18%, of which, the active management scale is US $ 84.6 billion, + 14% per year, accounting for 35%, which is an average increase of 10% over 18 years.

Optimize asset allocation in a timely manner and increase self-operated income by 7 times.

In 19H1, a net investment income of 21 trillion was achieved, a 7-fold increase in one year.

A guide to adjusting investment strategies and converting investments in equity-type private investment businesses.

Bond self-employed businesses actively grasped the market rhythm and achieved good returns.

The progressive trading volume of corporate government bond futures was 2 in the same period last year.

The interest rate swap increased the transaction volume by 12 times compared to the same period last year; the bond pledged quotation repurchase business (“Tiantianli”) continued to lead, and its business scale and number of customers ranked first in the market.

[Investment recommendation]We expect the company’s EPS in 2019-21E to be 0.

40, 0.

43, 0.

45 yuan, BVPS is 6 respectively.

91, 7.

26, 7.65 yuan.

We give it 1 of 2019.

70-1.

80x P / B, corresponding to a reasonable value interval of 11.

74–12.

43 yuan.

Maintain “Highest Market” rating.

Risk Warning: The continued downturn in the market will lead to the expansion of business scale and further strengthening of market supervision.