驾乘财富管理东风，重整旗鼓蓄势待发

GF Securities Co., Ltd. (000776) Equity Research·Company Research·Securities Ⅱ 1 / 8 东吴证券（香港） 请务必阅读正文之后的免责声明部分 [Table_Main] Ride on the tailwinds of wealth management Buy (Initiation) Forecast & Valuation 2021A 2022E 2023E 2024E Revenue (RMB mn) 34,250 25,911 32,943 39,064 Growth (YoY %) 17.48% -24.35% 27.14% 18.58% Net profit (RMB mn) 10,854 8,006 10,584 12,761 Growth (YoY %) 8.13% -26.24% 32.19% 20.57% EPS (RMB) 1.42 1.05 1.39 1.67 P/E (X) 12.44 16.95 12.82 10.64 Investment Thesis ◼ GF Securities has benefited from a market-driven governance structure and local resources that have led to stable improvements in operational efficiency. The company's flexible decision-making mechanism, due to its private background, has enabled it to maintain market-oriented operations. Additionally, the high wealth level of Guangdong residents, combined with favorable development policies for the Guangdong-Hong Kong-Macao Greater Bay Area, has helped the company accumulate a strong customer base. Finally, the company's performance has been consistently stable, with net profit growing from RMB4.3bn to RMB10.9bn between 2018-2021 at a CAGR of 36%. The company's leverage ratio has been rising since 2019, with a corresponding increase in ROE. The overall capital utilization efficiency of the company has been high and stable. ◼ We see rapid development and sustained profitability in the wealth management industry. At the industry level, we expect equity wealth management to see significant growth as resident wealth gradually shifts towards financial assets. This trend is driven by the increasing attractiveness of financial assets due to regulatory policies and a shift away from speculative property investment. Moreover, we believe that there is still ample room for resident asset allocation to move towards the equity market, given that China's equity market is still underdeveloped compared to those of the US, Japan, and the UK. In fact, actively managed AUM grew at a CAGR of 63% between 2019-2022Q3 and the proportion of investors holding non-money market investments raised by 11.5pcts between 2018-20. At the company level, GF Securities is well-positioned to benefit from this trend as a major shareholder of E Fund and GF Fund, both of which have dominant positions in the mutual fund industry. The stable growth of their AUM has contributed to 20% or RMB937mn of GF Securities' 22H1 net profit, and we expect their market share and asset size to continue to grow. In addition, the company's brokerage business has been steadily growing, with commission rates higher than industry average (0.0325% for GF and 0.0234% for industry) and steady increases in revenue (2018-2021 CAGR of 31%). The company's performance in financial products sales has also been impressive. ◼ The company's comprehensive business layout is poised for growth, with investment banking business expected to recover in the near-term (2022H1 net fee income up 5.30% YoY). The company's invest