First coverage of Cinda Securities (601059): mature and stable brokerage business, rapid rise of large asset management business

The first AMC in China is a securities firm with significant advantages in shareholder resources. Cinda Securities is the first domestic AMC securities company, and its controlling shareholder is China Cinda. It is the first financial asset management company controlled by the Ministry of Finance and approved by the State Council, and the first Chinese financial asset management company to enter the international capital market. Cinda Securities is expected to rely on China Cinda's platform to explore more financial service businesses, accelerate the company's resource integration and professional division of labor, and achieve stable performance development.

    The brokerage business is mature and stable, and the construction of investment advisers helps the transformation of financial management. In recent years, the proportion of the company's brokerage business revenue has declined, but in terms of absolute revenue, the company's brokerage business revenue is still rising steadily.

    The company has formed obvious leading advantages in key areas such as Liaoning, and its commission rate is higher than the industry average. Based on the hierarchical management of customers, the company has built a Cinda wealth service brand, strengthened the construction of investment advisory team, and promoted the transformation of brokerage business to wealth management.

    The large asset management business has developed rapidly, and the proportion of revenue has increased year by year. Cinda Australia Asia, a fund subsidiary of the company, has seen rapid growth in its performance in recent years. In 2022, it will achieve a net profit of 213 million yuan,+342.32% year-on-year. Its profit contribution rate continues to rise, reaching 9.31%, up 7.11 pct. The company's asset management business performance also grew steadily, with both revenue and share rising. The large asset management business has become a new performance growth point of the company.

    Earnings forecast and investment rating: we expect Cinda Securities to achieve total operating revenue of 4183.92/453783/48468500 yuan respectively from 2023-2025; The net profit attributable to the parent company was 155879 yuan/168735 yuan/179982 yuan respectively. It is estimated that the EPS will be RMB 0.48/0.52/0.55 respectively from 2023 to 2025, and the corresponding PE will be 30.58x in 2023. For the first time, the company will be rated as "overweight".