Orient Securities(SH:600958) KAIYUAN SECURITIES·2024-08-31 07:00Investment Rating - The investment rating for Dongfang Securities is "Buy" (maintained) [1] Core Views - The company's performance is supported by investment income and cost reduction, with a focus on deepening the transformation towards buy-side advisory services [1][2] - The current stock price reflects a valuation with a safety margin, corresponding to a price-to-book ratio (PB) of 0.9 for 2024-2026 [2] Financial Performance Summary - For H1 2024, the total revenue and net profit attributable to shareholders were 8.57 billion and 2.11 billion yuan, respectively, showing a year-on-year change of -1% and +11% [2] - The annualized return on equity (ROE) was 5.3%, an increase of 0.44 percentage points year-on-year, with a leverage ratio of 3.38 times [2] - The company expects net profits of 3.49 billion, 4.01 billion, and 4.76 billion yuan for 2024-2026, with corresponding earnings per share (EPS) of 0.4, 0.5, and 0.6 yuan [2][3] Asset Management Performance - Dongzheng Asset Management reported revenue and net profit of 740 million and 220 million yuan, respectively, down 37% and 43% year-on-year [3] - Huatai Asset Management's revenue and net profit were 2.22 billion and 690 million yuan, down 20% and 13% year-on-year [3] Wealth Management Transformation - The brokerage business net income was 1.05 billion yuan, down 29% year-on-year, primarily due to low trading volumes and reduced commissions [3] - The company is transitioning to a buy-side advisory model, with a fund advisory business scale of approximately 14.6 billion yuan [3] Cost Management and Investment Returns - Investment income (including fair value changes) was 2.49 billion yuan, up 34% year-on-year, with an annualized self-operated investment return rate of 4.1% [3] - Management expenses decreased by 9% year-on-year, reflecting effective cost reduction measures [3]