Haitong Securities (600837) 2018 Annual Report Comment: Self-operated Substitution Will Slow Performance, Internationalization Business Maintains Superior Position

Opinion report / Non-bank finance I. Overview of the event Haitong Securities released the 2018 annual report on March 27, achieving operating income of 237.

7 ‰, at least -15.


  Attributable net profit 52.

1 ppm, ten years -39.

5%, with an expected average ROE of 4.


  Second, the analysis and judgment of the decline in performance was in line with the industry. The decrease of 60% in self-operated business income was significantly affected by changes in market conditions, sluggish transactions and IPO supervision. The company’s 18-year return to net profit decreased by -39.

5%, which is basically the same as the industry’s overall net profit of -41%. Among them, the decrease in investment income by 52% has significantly dragged down performance. The brokerage business income is -24% and the asset management business income is -10%.

Interest income is dazzling at + 30% per year.

Other income increased by 29%, mainly due to the continued growth in business income of subsidiaries.

  Promote the transformation and development of the brokerage business, give play to the advantages of customers’ scale, and concentrate the wealth management company’s brokerage business to exceed 20%.

On the basis of 7%, the company accelerated the transformation and development of wealth management.

1) Integrate wealth management investment and research, product, sales and R & D business lines, and vigorously develop value-added services.

e Haitongcai APP has over 23 million users, and APP transaction customer coverage exceeds 80%.

2) The development of large-scale asset allocation products for high-net-worth customers has achieved positive returns, and the average annualized return after fees is over 8%.

  Revenue from investment banks remained stable and comprehensive strengths were high. The advantages of overseas investment banking business were obvious. Investment banking revenues remained stable, achieving a total net income of 32 million US dollars, a total financing underwriting scale of 46.3 billion US dollars, and debt financing of 267.6 billion US dollars, occupying the seventh place in the industry.

Among them, corporate bond underwriting ranked second, debt financing instruments ranked second, and corporate bonds ranked fifth.

The total transaction value of M & A and restructuring was 6杭州桑拿网6.3 billion, ranking second in the industry.

Haitong International ranked first in the number of equity financings and IPOs in the Hong Kong market.

And completed 2 single US IPO projects.

  The financial leasing business has a good momentum of development, expanding income sources, boosting interest income and realizing interest income of $ 17.9 billion for 18 years, +18 per year.

7%, diversified income sources, achieving net income of $ 4.8 billion, + 32% per year.

Among them, the income from stock pledged repurchase income was US $ 4.2 billion, one year + 30%; Haitong Hengxin achieved revenue growth of + 32% and net profit of at least + 10% around its main leasing business, contributing 3.7 billion in financing lease income, accounting for20%; interest income from customer loans was $ 12 million, + 44% for the full year.

  Third, investment advice The company’s net asset size and comprehensive strength are at the forefront of the industry, which is estimated to be about 1 below the sector PB.

Seven times the level, it is expected that the company’s PB from 2019 to 2020 will be 1.

2, 1.

1x coverage for the first time.

  Fourth, risk warning: the transformation and development of the brokerage business is less than expected.