Event description
The company released the performance express report for 2022. During the reporting period, it realized an operating revenue of 65533 million yuan, -14.36% YoY, and a net profit attributable to the parent company of 21121 million yuan, -8.57% YoY. The weighted average ROE was 8.59%, down 3.48 pct from the previous year.
Event comments
The downturn in the market dragged down the performance and improved month on month in the fourth quarter. In 2022, under the impact of the COVID-19 epidemic, geopolitics, the Federal Reserve's interest rate hike and other events, the financial market volatility intensified, the secondary market was deeply adjusted, and the annual performance declined slightly, in line with expectations. In Q4, the company's performance improved month on month, and the operating revenue in a single quarter was 15.712 billion yuan, up 5.19% month on month; The net profit attributable to the parent company was 4.553 billion yuan, down 15% month on month.
The investment banking business is firmly in the lead, and the IPO project reserve is rich. The company's investment banking business has ranked first for many consecutive years. In 2022, it helped 151 enterprises achieve equity financing of 312.752 billion yuan,+5.21% year-on-year, with a market share of 21.82%,+3.67 pct year-on-year, of which the IPO amount was 125.958 billion yuan,+16.47% year-on-year, with a market share of 24.12%,+6.19 pct year-on-year. There are 3555 creditor's rights financing projects, with a financing amount of 1.58 trillion yuan,+1.03% year on year, and a market share of 14.74%,+1.03 pct year on year. The company's IPO project reserve ranks first in the industry. As of January 13, 2023, there are 107 reserve projects, 40.79% higher than the second in the industry.
The asset management subsidiary was approved, and business growth points emerged. CITIC Securities conducts asset management business through the company itself and its holding Huaxia Fund. As of January 13, 2023, the public AUM of Huaxia Fund has reached 1.11 trillion,+11.58% compared with the same period last year, and the industry ranking has risen 2 places to 3. According to the data of China Infrastructure Association, by the end of the third quarter of 2022, the company's monthly average private equity management scale reached 1.19 trillion yuan, making it the only securities company in the market with a private equity management scale of more than one trillion yuan. On December 30, 2022, the company announced the approval of the establishment of an asset management subsidiary. The approval of an asset management subsidiary will help enterprises apply for a public offering license, thus bringing new business growth points.
Market making trading funds are well prepared. In 2022, the company was approved to be qualified for market making transactions on the science and technology innovation board. Market making transactions have a high demand for capital. In February 2022, the company raised more than 27 billion yuan through A+H rights issue. By the middle of 2022, CITIC Securities had a net capital of 134.499 billion yuan and a risk coverage rate of 194.29%, far above the 100% regulatory red line. Higher capital reserves will help the company to carry out new business smoothly and seize market share quickly.
Investment advice
The company is the industry leader, and the investment bank market share is stable first in the industry. In the future, it is expected to benefit from the incremental opportunities brought by the registration system and the strong competition pattern. It is estimated that from 2022 to 2024, the company will achieve operating revenue of RMB 65.533 billion, RMB 78.922 billion and RMB 90.716 billion respectively, with an increase of -14.36%, 20.43% and 14.94%; Net profit attributable to the parent company was RMB21.121 billion, RMB26.431 billion and RMB30.073 billion, up by -8.57%, 25.14% and 13.78%; PB was 1.22/1.13/1.03 respectively, maintaining the rating of "overweight - A".
Risk warning
The financial market fluctuated significantly, business promotion was less than expected, and the company had major risk events.
