东方财富：基金/经纪业务收入持续下滑

Investment Rating - The report maintains a "Sell" rating for the company with a target price adjusted from Rmb10.90 to Rmb10.40 [4][5][17]. Core Views - The company's net profit for 1H24 was Rmb41 billion, down 4% year-on-year, which was below expectations from UBS and the market. The performance was primarily supported by fixed income investments, while core business revenues continued to decline [2][3]. - The fund distribution business saw a significant revenue drop of 29% year-on-year in 1H24, attributed to a decline in market share and trailing commission rates. The brokerage business also experienced a 10% year-on-year revenue decline, with market share expansion slowing [2][3]. - The report anticipates continued pressure on the fund distribution business due to multiple factors, including declining market share, reduced fees for public funds, and potential regulatory changes affecting trailing commission rates [2][4]. Summary by Sections Financial Performance - 1H24 fund distribution revenue decreased by 29% year-on-year, with total fund sales amounting to Rmb8,514 billion, a 4% increase year-on-year. The market for newly issued funds grew by 25% year-on-year, primarily driven by bond funds [3]. - The brokerage business revenue fell by 10% year-on-year, underperforming the industry average decline of 8%. This was mainly due to a 4% drop in commission rates and slowing market share expansion [3]. - Net interest income increased by 7% year-on-year, with a slight market share gain in financing business [3]. Earnings Forecast - EPS forecasts for 2024-2026 have been revised down by 3-5% to reflect the lower-than-expected net profit for 1H24 [4]. - The target price adjustment reflects a valuation based on a sum-of-the-parts approach, implying a 17x P/E for 2025E [4]. Market Position - The company is recognized as a leading financial information service platform in China, with its "East Money" website being one of the most visited financial news sites [9]. - The online trading platform "Tiantian Fund" is noted as the largest fund management platform in China, approved by the CSRC as an independent third-party fund sales institution [9].