Zhi Tong Cai Jing·2025-09-16 02:30Core Viewpoint - The report from Xingzheng International highlights the growth potential in wealth management and institutional services, expressing optimism about Huatai Securities (06886) leveraging technology to create long-term performance advantages. The company is projected to achieve a net profit of 138.37 billion and 154.97 billion yuan in 2025 and 2026, respectively, with an initial "Buy" rating assigned [1]. Group 1: Financial Performance - In the first half of 2025, Huatai Securities reported operating revenue and net profit attributable to shareholders of 162.19 billion and 75.49 billion yuan, reflecting year-on-year increases of 31.0% and 42.2% [1]. - For Q2, the company achieved operating revenue and net profit of 79.87 billion and 39.07 billion yuan [1]. - The weighted average ROE increased by 1.12 percentage points to 4.3%, while the operating leverage, excluding client funds, rose by 6.0% to 3.48 times compared to the beginning of the year [1]. Group 2: Revenue Breakdown - In the first half of 2025, the company generated revenue from fee-based and capital-based businesses of 59.64 billion and 97.22 billion yuan, respectively. Management expenses increased by 0.8% year-on-year to 72.62 billion yuan, with the management expense ratio decreasing by 12.63 percentage points to 45.7% [2]. Group 3: Investment Banking and Brokerage - The investment banking sector showed recovery, with net income from brokerage, investment banking, and asset management at 37.54 billion, 11.68 billion, and 8.93 billion yuan, respectively. The brokerage business benefited from increased trading activity, leading to significant growth in agency securities trading revenue [3]. - The scale of fund advisory business grew by 16.4% compared to the beginning of the year, contributing to the brokerage business strategy and cross-border collaboration. The main underwriting amount increased by 150.7% year-on-year, ranking second in the industry for IPO underwriting scale [3]. - Bond underwriting achieved a year-on-year increase of 24.3% due to the comprehensive investment banking capabilities [3]. Group 4: Interest Cost Optimization and Investment Income - In capital-based businesses, net interest income and investment income reached 20.37 billion and 76.85 billion yuan, reflecting year-on-year increases of 186.6% and 52.1%, respectively. The strong performance in interest income was driven by a decline in interest expenses due to lower costs of interest-bearing liabilities [4]. - Investment income surged by 122.2% due to gains from the disposal of trading financial assets. The company accelerated its balance sheet expansion, with financial assets increasing by 20.6% to 4,340.59 billion yuan compared to the beginning of the year [4]. - The scale of bond investments grew, leading to year-on-year increases of 19.0% and 112.0% in trading financial assets and other debt investments, respectively. Non-trading equity investments significantly increased to 7.394 billion yuan, generating approximately 148 million yuan in dividend income [4].