Guotai Junan Securities·2024-08-30 22:33Investment Rating - The report maintains a "Buy" rating for the company with a target price of 12.06 CNY per share, corresponding to a PE ratio of 28.71x and a PB ratio of 1.34x [4][6]. Core Insights - The company has actively seized investment opportunities in the fixed income market, resulting in a significant year-on-year increase in net investment income, which has driven better-than-expected performance. The asset management business is strategically positioning itself in actively managed equity funds, supported by policy initiatives to enhance performance [3][4]. Financial Performance Summary - For the first half of 2024, the company reported revenue and net profit attributable to shareholders of 8.571 billion CNY and 2.111 billion CNY, respectively, reflecting a year-on-year change of -1.42% and +11.04% [4]. - The weighted average ROE increased by 0.22 percentage points to 2.66%, outperforming expectations [4]. - The company has adjusted its earnings per share (EPS) forecasts for 2024-2026 to 0.42 CNY, 0.43 CNY, and 0.45 CNY, respectively, up from previous estimates of 0.33 CNY, 0.37 CNY, and 0.40 CNY [4]. Investment Business Performance - The net income from investment business increased by 33.56% year-on-year to 2.491 billion CNY, contributing 80.98% to the adjusted revenue growth. This growth is attributed to the company's proactive engagement in the fixed income market, with an investment yield increase of 0.19 percentage points to 1.26% [4]. - The company's financial asset scale grew by 2.17% compared to the end of 2023, reaching 200.014 billion CNY, further boosting investment income [4]. Cost Management and Risk Mitigation - The company has effectively controlled business costs, with business and management expenses decreasing by 8.97% to 3.240 billion CNY. Credit impairment losses have significantly reduced by 67.3% to 312 million CNY, contributing to improved performance [4]. Strategic Positioning - In the context of strong policy support for the development of equity public funds, the company's asset management business is strategically expanding into actively managed equity funds, which is expected to enhance performance. The new policies emphasize the development of equity public funds and improving the investment research capabilities of fund companies [4].