HUAXI Securities·2024-08-31 13:03Investment Rating - The report maintains an "Accumulate" rating for the company, with a target price of 11.13 CNY per share [2][6]. Core Insights - The company reported a total revenue of 9.85 billion CNY, a year-on-year decrease of 5%, and a net profit attributable to shareholders of 4.39 billion CNY, down 11% year-on-year. However, the second quarter of 2024 saw a significant recovery with revenue of 5.78 billion CNY, a quarter-on-quarter increase of 42%, and a net profit of 2.76 billion CNY, up 69% quarter-on-quarter [2][3]. - The revenue structure is heavily reliant on securities investment, brokerage, and interest income, which together account for 94% of total revenue. Brokerage and interest income saw declines of 13% and 17% respectively, while investment banking and proprietary trading showed growth of 42% and 6% [3][4]. - The company benefited from a unique business structure, with its brokerage, investment banking, and asset management businesses performing better than the industry average. The investment banking revenue increased by 42% year-on-year, primarily driven by bond underwriting, which accounted for a significant portion of its business [4][5]. Revenue and Profitability Analysis - The company's proprietary trading income surged to 4.92 billion CNY, reflecting a year-on-year increase of 6%. The financial asset investment scale reached 397.8 billion CNY, up 3% year-on-year, with an investment return rate of 1.27%, a slight decrease of 0.05 percentage points year-on-year. The second quarter alone saw a remarkable 3.3 billion CNY in proprietary trading income, a 46% increase year-on-year and a 102% increase quarter-on-quarter [5][6]. - The company plans to distribute a dividend of 20.93% of the net profit attributable to shareholders for the first half of 2024 [2]. Financial Forecasts - The revenue forecasts for 2024 and 2025 have been adjusted down to 32.54 billion CNY and 36.65 billion CNY respectively, while the forecast for 2026 has been increased to 42.25 billion CNY. The earnings per share (EPS) estimates for 2024 and 2025 have been revised down to 0.61 CNY and 0.79 CNY respectively, with an increase for 2026 to 1.04 CNY [6][7].