Guotai Junan Securities·2024-08-31 14:40Investment Rating - The report maintains a "Buy" rating for the company with a target price of 17.50 CNY per share, corresponding to 1.14x PB for 2024 [2][7] Core Views - Q2 2024 profit showed significant improvement, exceeding expectations, driven by strong investment income from the bond market [6][7] - The company's competitive advantage as a leading securities firm and its stake in top-tier public funds are expected to strengthen under the guidance of building a first-class investment bank and investment institution [6][7] - The company's asset management and institutional services are continuously enhancing their professional capabilities, with its public fund brands having a clear advantage and leading investment research capabilities [7] Financial Performance - Q2 2024 single-quarter profit reached 2.82 billion CNY, a year-on-year increase of 18.6% and a quarter-on-quarter increase of 83.6% [7] - Investment income in Q2 2024 was 2.67 billion CNY, a year-on-year increase of 119% and a quarter-on-quarter increase of 142% [7] - The company's financial investment assets expanded by 3% compared to the beginning of the year, with trading bond assets increasing by 20% to 82.5 billion CNY [7] - The company's public fund subsidiaries, GF Fund and E Fund, contributed 8.2 billion CNY and 15.2 billion CNY in profits respectively in H1 2024, with a combined profit contribution ratio of 18%, down 4.5 percentage points year-on-year [7] Financial Forecasts - Revenue for 2024E is projected to be 23.836 billion CNY, with a year-on-year growth of 2.3% [6][10] - Net profit attributable to the parent company for 2024E is expected to be 7.084 billion CNY, with a year-on-year growth of 1.5% [6][10] - EPS for 2024E is forecasted to be 0.93 CNY, with a slight upward revision from the previous forecast of 0.87 CNY [7][10] - ROE for 2024E is expected to be 4.9%, slightly lower than the 5.0% in 2023A [6][10] Industry and Company Positioning - The company is positioned as a leading securities firm with a strong competitive edge in asset management and institutional services [7] - The industry is expected to see accelerated supply-side reforms, with the government focusing on building a "national team" in the financial sector and promoting the strengthening and optimization of leading securities firms [7] - The company's asset management business and institutional services are continuously improving their professional capabilities, which will help meet the wealth management needs of residents and the service demands of medium- and long-term institutional funds [7]