The company released its annual performance report for 2022, and achieved an annual operating revenue of 65533 million yuan, -14.36% year-on-year, and a net profit attributable to the parent company of 21121 million yuan, -8.57% year-on-year. The net assets attributable to the parent company were 252.985 billion,+20.95% YoY, ROE 8.59, down 3.48 PCT YoY.
Performance overview: The performance is resilient and the leading position is stable. In 2022, the company will achieve an operating revenue of 65533 million yuan, -14.36% year-on-year, and a net profit attributable to the parent company of 21121 million yuan, -8.57% year-on-year. After the relaxation of epidemic prevention policy, the impact of the first round of group infection dragged down the active trading and investment as well as the fluctuation of the bond market. The Q4 revenue only achieved a small repair on a month on month basis. The Q4 single quarter revenue reached 15.712 billion yuan, -16.03% year-on-year,+5.20% month on month basis; In Q4, the net profit attributable to the parent company in the single quarter was 4.554 billion, -16.50% year-on-year and -15.21% month on month. In Q4, the main reason why the revenue increased month on month but the net profit attributable to the parent company decreased month on month was that the current net profit margin was 28.98%, and the month on month decrease was 6.98PCT (or it was caused by the seasonal increase of administrative expenses due to the provision of employee bonuses at the end of the year). Influenced by the decline of market scale and dilution effect of rights issue, the ROE in 22 years was 8.59%, a year-on-year decrease of 3.48 PCT. After the completion of 27.3 billion shares allotment in 22 years, the capital advantage continued to consolidate. At the end of the year, the total assets reached 1310.149 billion,+2.46% year-on-year, and the net assets attributable to the parent company was 252.985 billion,+20.95% year-on-year.
The company has significant business advantages and has become an important stabilizer of performance through the cycle. The trend of A-share institutionalization continues, generating huge opportunities for institutional business. The demand of institutional customers shows a trend of integration, customization and cross-border, which puts forward higher comprehensive requirements for securities companies. CITIC Securities is ahead of the industry in terms of organizational structure, license qualification, capital strength, product design, risk management, sales channels, etc., and has formed scale effect and first mover advantage. The relevant business contribution is expected to drive the company's profits to continue to outperform the industry.
The leading position of big investment banks is stable, with leading indicators. In 2022, the IPO scale of the company will reach 150.3 billion yuan, achieving a high growth from a high base of+77% year on year, with a market share of 25.60%, ranking first in the industry; The refinancing scale was 227.9 billion yuan,+11.93% year on year, with a market share of 20.04%, ranking first in the industry; The bond underwriting scale was 1526.1 billion yuan,+0.57% year on year, ranking first in the industry. So far, there are 573 recommendation representatives of the company, 11 IPO projects have been approved to be issued, and 107 IPO projects are under review, all of which are the first in the industry. The company has abundant human resources and project reserves. After the implementation of the comprehensive registration system, the competitive advantage of the company's investment bank is expected to continue to be realized.
The transformation of big wealth management continued to advance, and high-quality customer resources became a long-term competitive advantage. The number of investment advisers of the company is 3901, ranking the second in the industry; The product spectrum is complete, the customer resource advantage is significant, and the retention scale in the first three quarters of the market fluctuation shows resilience. At the end of 22 years, the scale of equity biased funds of Huaxia Fund was 406.8 billion, ranking the second in the industry, and the scale of non monetary funds was 726.9 billion, ranking the third in the industry. It is expected that the net profit of funds will form a significant performance contribution. At the end of 22, the establishment of CITIC Asset Management Company was approved by the CSRC, and is expected to apply for public offering license in the future, further giving play to the natural advantages of its own channels.
Maintain a "highly recommended" investment rating. In 22 years, the industry prosperity is under pressure, the company's performance shows resilience, and is expected to still lead the leading brokerage firms. As an aircraft carrier level securities dealer, the company's investment business has passed through the cycle, the market share of toll business has continued to increase, the institutional business is in the lead in all aspects, and the advantages of capital strength and scale effect are obvious. It is expected to continue to benefit from the reform of A-share institutionalization and comprehensive registration system. Looking forward to the future, 23Q1 is expected to usher in interest rate reduction, the comprehensive registration system reform is poised, and the market risk appetite and favorable policies are expected to form a catalyst for the brokerage sector. Based on the change of prosperity, the net profit attributable to the parent company of our company in 22/23/24 years was 21.1 billion/26.6 billion/30.8 billion respectively, - 9%/+26%/+16% year-on-year. Considering the improvement of the scene of capital market in 23 years, which is expected to drive the company's profit rebound and the repair of ROE, we revised the company's valuation target and gave it a target of 16 times PE in 23 years (16.7 times PE in the past three years), corresponding to a target price of 28.68 yuan, about 40% of the space, maintaining a strongly recommended rating.
Risk tips: 1) The comprehensive registration system reform is not as expected; 2) The equity market fluctuated significantly and the trading was light.
