Investment Rating - The report maintains a "Recommended" rating for the company, with a target price of 22.37 CNY, compared to the current price of 18.17 CNY [5][11]. Core Insights - The company's ROE has shown significant improvement, with a reported ROE of 8%, up by 0.8 percentage points year-on-year. The quarterly ROE stands at 2.5%, reflecting a 0.6 percentage point increase quarter-on-quarter and a 0.5 percentage point increase year-on-year [2]. - The total revenue for the reporting period, excluding other business income, reached 20.7 billion CNY, marking a 14.1% increase year-on-year. The net profit attributable to the parent company was 10.39 billion CNY, up 18.5% year-on-year [8][11]. - The company has demonstrated a robust performance in its brokerage business, with revenues of 6.18 billion CNY, which is a 100.5% increase year-on-year and a 128.9% increase quarter-on-quarter [10]. Financial Performance Summary - The company's financial leverage ratio at the end of the reporting period was 3.96 times, a decrease of 0.41 times year-on-year [2]. - The asset turnover ratio improved to 4%, with a quarterly turnover of 1.3%, reflecting a 0.3 percentage point increase quarter-on-quarter [2]. - The net profit margin for the reporting period was 50.1%, an increase of 1.9 percentage points year-on-year [2]. - The company's interest income from credit business was 10.02 billion CNY, with a quarterly income of 2.68 billion CNY, showing a quarter-on-quarter increase of 3.75 billion CNY [3][10]. Regulatory Indicators - The company's risk coverage ratio stands at 216.7%, an increase of 39.5 percentage points from the previous period, indicating a strong regulatory position [4]. - The net capital is reported at 87.4 billion CNY, reflecting a 10.1% increase from the previous period [4].

Core Viewpoint - The company is actively seizing opportunities in both equity and bond markets in 2024, driving significant performance growth [1][3]. Financial Performance - The company maintains a "Buy" rating with a target price of 21.09 CNY per share, corresponding to a PE ratio of 16.93x and a PB ratio of 1.49x [2]. - Projected revenue and net profit for 2024 are 20.891 billion CNY and 10.386 billion CNY, respectively, reflecting year-on-year growth of 5.4% and 18.51% [2]. - The weighted average ROE is expected to increase by 0.91 percentage points to 8.82%, aligning with performance expectations [2]. - The EPS forecast for 2025-2026 has been slightly adjusted to 1.26 CNY and 1.30 CNY, respectively, with a new EPS estimate of 1.36 CNY for 2027 [2]. Investment Business - The net income from the investment business increased by 33.23% to 11.01 billion CNY, contributing 108.16% to the adjusted revenue growth, marking it as the primary driver of performance improvement [3]. - The investment business growth is attributed to favorable market conditions in the bond market, with a year-on-year investment return increase of 0.57 percentage points to 2.57% [3]. - In Q4 2024, the company reported investment income of 2.361 billion CNY, showing a quarter-on-quarter decrease of 2.16%, indicating stable investment performance [3]. Brokerage Business - The brokerage business is expected to significantly contribute to profitability, with a projected share of 30% in adjusted revenue for 2024, positioning the company favorably within the industry [4]. - The brokerage business saw a year-on-year increase of 11.79% to 6.183 billion CNY, contributing 25.69% to the adjusted revenue growth [3][4]. - The company is enhancing user engagement through content operations and increasing support for ETF products, which is expected to strengthen its competitive advantage in the brokerage sector [4]. Market Activity - The stock market is experiencing sustained trading activity, which is anticipated to support the performance of brokerage firms [5].

Investment Rating - The report maintains an "Outperform" rating for the company [2] Core Insights - The company reported a revenue of 20.89 billion yuan for 2024, a year-on-year increase of 5.4%, and a net profit attributable to shareholders of 10.39 billion yuan, up 18.5% year-on-year [5] - The company's brokerage business revenue reached 6.18 billion yuan, growing 11.8% year-on-year, with a significant increase in the number of normal trading clients [7] - The investment banking business showed resilience, with a focus on enhancing its service capabilities and expanding its market presence [7] - The asset management business remained stable, with contributions from joint ventures like Bosera and China Merchants Fund [7] - The self-operated investment net income increased by 42.15% year-on-year, reflecting a stable growth strategy [7] - The company is expected to benefit from a recovering capital market, with adjusted profit forecasts for 2025-2027 showing net profits of 11.68 billion yuan, 13.45 billion yuan, and 15.19 billion yuan respectively [7] Financial Data and Profit Forecast - The company’s projected revenues for 2025, 2026, and 2027 are 24.01 billion yuan, 27.09 billion yuan, and 29.89 billion yuan respectively, with corresponding net profits of 11.68 billion yuan, 13.45 billion yuan, and 15.19 billion yuan [6][8] - The return on equity (ROE) is expected to improve from 8.84% in 2024 to 10.47% by 2027 [6] - The price-to-earnings (P/E) ratio is projected to decrease from 15.83 in 2024 to 10.63 in 2027, indicating potential value appreciation [6]

Investment Rating - The report assigns a "Buy" rating for the company, indicating a positive outlook for the stock's performance in the near term [1]. Core Insights - The company achieved a total revenue of 20.89 billion yuan in 2024, representing a year-on-year growth of 5.4%. The net profit attributable to shareholders reached 10.39 billion yuan, up 18.5% year-on-year, with an EPS of 1.13 yuan and a ROE of 8.8%, an increase of 0.9 percentage points year-on-year [9]. - The wealth management transformation has entered a new phase, with brokerage business revenue of 6.18 billion yuan, a year-on-year increase of 11.8%, accounting for 29.9% of total revenue. The company’s market share in brokerage decreased by 0.7 percentage points to 4.51% [9]. - Investment banking revenue declined by 34.2% to 860 million yuan, with a significant drop in equity underwriting scale by 42% to 13.84 billion yuan, ranking 6th in the industry. However, bond underwriting increased by 30.9% to 426.5 billion yuan, ranking 8th [9]. - The asset management business saw a slight revenue increase of 0.6% to 720 million yuan, with total asset management scale at 267.4 billion yuan, a decrease of 9.3% [9]. - The company’s investment strategy remains stable, with net investment income (including fair value) increasing by 41.6% to 9.53 billion yuan [9]. - The forecast for net profit attributable to shareholders for 2025-2027 is 12.3 billion, 13.1 billion, and 14 billion yuan, respectively, with expected year-on-year growth rates of 18%, 7%, and 7% [9]. Financial Summary - Total revenue for 2023 is projected at 19.82 billion yuan, with a year-on-year growth of 3.13%. The net profit for 2023 is estimated at 8.76 billion yuan, reflecting an 8.57% increase [1]. - The company’s P/E ratio is expected to decrease from 19.33 in 2023 to 11.30 by 2027, indicating a potentially undervalued stock as earnings grow [1]. - The company’s total assets are projected to grow from 721.16 billion yuan in 2024 to 821.19 billion yuan by 2027 [15].

Core Viewpoint - The performance of China Merchants Securities (600999.SH) is primarily driven by investment and trading income, while investment banking revenue has significantly declined, indicating a reliance on market conditions for profitability [2][5]. Financial Performance - In 2024, China Merchants Securities achieved operating revenue of 20.891 billion yuan, a year-on-year increase of 5.40%, and a net profit attributable to shareholders of 10.386 billion yuan, up 18.51% [2]. - The core driver of revenue growth was the substantial increase in investment and trading income, which rose by 79.14% year-on-year [4]. - The company reported its best quarterly performance in Q4 2024, with operating revenue reaching 6.612 billion yuan and net profit of 3.236 billion yuan [3]. Business Segments - The main business segments and their revenues for 2024 were as follows: Wealth Management and Institutional Business (10.233 billion yuan), Investment Banking (0.858 billion yuan), Investment Management (0.924 billion yuan), Investment and Trading (6.334 billion yuan), and Other Businesses (2.543 billion yuan) [3]. - The proportion of revenue from investment and trading increased by 12.48 percentage points compared to 2023, while other segments saw a decline in their revenue share [3]. Regulatory Issues - China Merchants Securities has faced multiple regulatory penalties in recent years, involving issues such as compliance failures and misconduct by employees [7][8]. - The company received a warning from the Shenzhen Stock Exchange for violations related to its underwriting and sponsorship of IPOs, including inadequate internal control checks [7][8]. - In February 2024, the China Securities Regulatory Commission penalized numerous employees for illegal stock trading, resulting in a total fine of 81.73 million yuan and various administrative measures against the company [8].

Investment Rating - The investment rating for the company is "Outperform the Market" [6][4]. Core Views - The company achieved a revenue of 20.891 billion yuan in 2024, a year-on-year increase of 5.4%, and a net profit attributable to shareholders of 10.386 billion yuan, up 18.51% year-on-year. The return on equity (ROE) was 8.82%, an increase of 0.91 percentage points, and earnings per share (EPS) rose by 20.21% to 1.13 yuan [1][4]. - The company's brokerage business net income from fees reached 6.183 billion yuan, an increase of 11.79% year-on-year, with a significant growth in wealth management and institutional business [2][4]. - Investment income, including fair value changes, was 9.527 billion yuan, a 41.57% increase year-on-year, driven by favorable market conditions and active trading [3][4]. Summary by Sections Financial Performance - In 2024, the company reported total revenue of 20.891 billion yuan, with a year-on-year growth of 5.4%. The net profit attributable to shareholders was 10.386 billion yuan, reflecting an 18.51% increase. The EPS was 1.13 yuan, up 20.21% [1][5]. - The company’s financial assets totaled 378.8 billion yuan, a 1.13% increase year-on-year, supported by favorable capital market policies [3]. Wealth Management and Institutional Business - The company’s wealth management assets reached 4.27 trillion yuan, a 14.78% increase year-on-year, with a notable rise in the number of high-net-worth clients [2]. - The institutional business saw a significant increase in outsourced custody scale, reaching 3.46 trillion yuan, with a market share of 21.72% in private fund product custody [2]. Investment and Asset Management - The company’s investment income was 9.527 billion yuan, a 41.57% increase year-on-year, attributed to improved market conditions and successful equity investments [3]. - The asset management business showed steady growth, with net income from asset management fees reaching 717 million yuan, a slight increase of 0.61% year-on-year [3]. Future Earnings Forecast - The earnings forecast for 2025 and 2026 has been adjusted upwards by 7.8% and 5.0%, respectively, with projected net profits of 10.814 billion yuan and 11.638 billion yuan for those years [4][5].

Investment Rating - The investment rating for the company is "Buy" for both A and H shares, maintaining the previous rating [8]. Core Views - The company's 2024 performance shows a revenue of 20.891 billion RMB, a year-on-year increase of 5.40%, and a net profit attributable to shareholders of 10.386 billion RMB, up 18.51% year-on-year. The fourth quarter alone saw a revenue of 6.612 billion RMB, a significant increase of 33% year-on-year and 41% quarter-on-quarter [1][2]. - Investment business is identified as the core driver of growth, with annual investment income reaching a record high of 9.5 billion RMB, a 42% increase year-on-year, accounting for 46% of total revenue [2][3]. - The brokerage and asset management businesses continue to show growth, benefiting from market recovery, with net income from brokerage services increasing by 12% year-on-year [3]. - The investment banking and credit business saw a decline, with net income from investment banking down 34% year-on-year due to a significant drop in IPO and refinancing activities [4]. Summary by Sections Financial Performance - The company reported a total revenue of 20.891 billion RMB for 2024, with a year-on-year growth of 5.40%. The net profit attributable to shareholders was 10.386 billion RMB, reflecting an 18.51% increase [1][7]. - The investment business generated 9.5 billion RMB in revenue, marking a 42% increase year-on-year and contributing 46% to total revenue [2]. Business Segments - Brokerage business net income reached 6.2 billion RMB, up 12% year-on-year, while asset management business net income was stable at 700 million RMB, a 1% increase [3]. - The investment banking segment faced challenges, with net income dropping to 860 million RMB, a 34% decline year-on-year due to reduced market activity [4]. Profit Forecast and Valuation - The earnings per share (EPS) forecast for 2025 is set at 1.36 RMB, with a projected book value per share (BPS) of 15.78 RMB. The target price is set at 23.91 RMB for A shares and 17.27 HKD for H shares, reflecting a premium to the expected price-to-book (PB) ratio [5][8].

Core Viewpoint - The company has demonstrated resilience and growth in various business segments despite a challenging market environment, with significant increases in revenue and market share in key areas such as wealth management, investment banking, and asset management [5][19][30]. Group 1: Company Overview - The company is focused on providing a wide range of financial products and services to individual, institutional, and corporate clients, with major business segments including wealth management, investment banking, investment management, and trading [7][28]. - The company has appointed a new securities affairs representative effective February 21, 2025 [4]. Group 2: Financial Performance - In 2024, the company reported a total revenue distribution across its business segments: wealth management and institutional business (102.33 billion RMB), investment banking (8.58 billion RMB), investment management (9.24 billion RMB), trading (63.34 billion RMB), and other businesses (25.43 billion RMB) [7]. - The company plans to distribute a cash dividend of 3.77 RMB per 10 shares to shareholders, totaling approximately 3.28 billion RMB based on the total share count as of December 31, 2024 [3]. Group 3: Market Environment - The overall economic environment in China remained stable in 2024, with a focus on high-quality development and increased support for capital markets [5]. - The total market size of ETFs reached 3.78 trillion RMB by the end of 2024, reflecting an 85.05% year-on-year increase [5]. - A-share listed companies distributed dividends totaling 2.39 trillion RMB, marking a 7.15% increase year-on-year, the highest in history [5]. Group 4: Wealth Management and Institutional Business - The A-share market saw a significant increase in trading volume, with stock fund trading volume reaching 29.58 trillion RMB, a 22.90% increase year-on-year [8]. - The company has enhanced its wealth management services by focusing on digital transformation and improving customer experience through various initiatives [9][10]. Group 5: Investment Banking - The A-share equity financing market experienced a significant decline, with total equity financing down 72.76% year-on-year, while the Hong Kong IPO market saw a substantial increase of 89.47% [21][22]. - The company ranked 7th in A-share equity underwriting and 8th in IPO underwriting, showing resilience in a challenging market [24]. Group 6: Investment Management - The asset management sector is growing, with the company’s total asset management scale reaching 2.67 trillion RMB by the end of 2024 [30]. - The company has successfully launched new public fund products and is expanding its cross-border business [30]. Group 7: Trading and Investment - The company has actively developed its trading strategies, focusing on high-dividend investments and utilizing advanced technologies for market analysis [39][41]. - The company’s foreign exchange business has expanded significantly, maintaining a strong market presence [42]. Group 8: Future Outlook - The company aims to strengthen its wealth management and investment banking capabilities while enhancing digital services and risk management practices [19][27][36].

Financial Performance - In 2024, the company achieved operating revenue of 20.89 billion, a year-on-year increase of 5.40% compared to 19.82 billion in 2023 [3] - The net profit attributable to shareholders reached 10.39 billion, reflecting an 18.51% increase from 8.76 billion in the previous year [3] - The net profit after deducting non-recurring gains and losses was 10.38 billion, up 18.84% from 8.73 billion in 2023 [3] - The net cash flow from operating activities was 54.73 billion, a significant increase of 101.97% compared to 27.10 billion in 2023 [3] Business Segmentation - The wealth management and institutional business accounted for the highest revenue share at 48.98%, followed by investment banking at 4.11%, investment management at 4.42%, trading and investment at 30.32%, and other businesses at 12.17% [2] - Wealth management and institutional business generated revenue of 10.23 billion, with a year-on-year growth of 2.22% [4] - Investment banking revenue was 857.64 million, down 33.75% due to a slowdown in the A-share equity financing market [5] - Investment management revenue was 924.04 million, showing a slight decrease of 0.30% [6] - The trading and investment business saw a substantial increase in revenue to 6.33 billion, up 79.14% [6] User Metrics - As of the end of 2024, the company had approximately 19.30 million active trading clients, an increase of 8.68% year-on-year [4] - The total assets under custody reached 4.27 trillion, reflecting a growth of 14.78% [4] - The company's app ranked fifth in terms of monthly active users among securities firms, with the highest average daily usage time per user [4] Executive Compensation - The total compensation for the company's directors and senior management decreased by 30.64% to 17.47 million from 25.19 million in 2023 [7] - Only three executives received salaries exceeding 2 million, with the chairman earning 2.47 million, the president 2.36 million, and a vice president 2.01 million [7]

Group 1 - The meeting of the Supervisory Board of China Merchants Securities Co., Ltd. was held in Shenzhen, with all six supervisors present [1] - The Supervisory Board approved the 2024 Annual Report, which includes both A-share and H-share reports, prepared according to relevant listing rules and accounting standards [1] - The meeting also approved the 2024 Annual Business Report, 2024 Internal Control Evaluation Report, 2024 Compliance Report, 2024 Sustainable Development Report, 2024 Compliance Management Effectiveness Assessment Report, and 2024 Supervisory Board Work Report, all with unanimous approval [2][2][2][2][2][2] Group 2 - All resolutions passed by the Supervisory Board are subject to review at the 2024 Annual General Meeting of Shareholders [2][3]