HTSC·2024-09-03 08:03Investment Rating - The investment rating for the company is "Buy" with a target price of HKD 8.28 and RMB 16.59, maintaining the previous rating [7]. Core Views - The company achieved a revenue of RMB 11.78 billion in H1 2024, a year-over-year decrease of 11%, and a net profit attributable to shareholders of RMB 4.36 billion, down 4% year-over-year. However, Q2 showed improvement with revenue of RMB 6.83 billion, up 1% year-over-year and 38% quarter-over-quarter, and a net profit of RMB 2.82 billion, up 19% year-over-year and 84% quarter-over-quarter. Investment performance was particularly strong, with a year-over-year increase of 133% and a quarter-over-quarter increase of 123% [2][3]. Summary by Sections Revenue and Profitability - In H1 2024, the company reported a revenue of RMB 11.78 billion, a decrease of 11% year-over-year, and a net profit of RMB 4.36 billion, down 4% year-over-year. Q2 revenue was RMB 6.83 billion, reflecting a 1% increase year-over-year and a 38% increase quarter-over-quarter. The net profit for Q2 was RMB 2.82 billion, which is a 19% increase year-over-year and an 84% increase quarter-over-quarter [2]. Investment Performance - Investment income for H1 2024 reached RMB 3.65 billion, up 43% year-over-year. Q2 alone saw investment income of RMB 2.53 billion, marking a 133% increase year-over-year and a 123% increase quarter-over-quarter, the highest quarterly revenue since Q3 2020. The company effectively utilized multi-strategy investment tools to reduce income volatility and captured structural opportunities in fixed income investments [3][4]. Brokerage and Market Share - The brokerage business recorded a net income of RMB 2.76 billion in H1 2024, down 9% year-over-year. The trading volume of Shanghai and Shenzhen stock funds reached RMB 9.34 trillion, with a market share increase of 0.11 percentage points to 4.05%. The company also maintained a strong position in margin financing and securities lending, with a market share of 5.45% [5]. Investment Banking and Asset Management - Investment banking net income was RMB 340 million in H1 2024, up 13% year-over-year. Equity underwriting decreased by 15% to RMB 6.9 billion, while bond underwriting increased by 65% to RMB 152.4 billion. Asset management net income was RMB 3.38 billion, down 19% year-over-year, but the company’s affiliated funds maintained leading positions in the industry [4][5]. Earnings Forecast - The company’s earnings per share (EPS) for 2024-2026 are projected to be RMB 0.92, RMB 1.00, and RMB 1.10 respectively, with a book value per share (BPS) of RMB 18.43 for 2024. The price-to-book (PB) ratio is expected to be 0.90 for A shares and 0.41 for H shares [2][6].