国泰君安：重磅并购落地，规模跃居首位

Investment Rating - The report maintains a "Buy" rating for Guotai Junan (2611 HK/601211 CH) with a target price of HKD 15.02 for the H-shares and CNY 26.28 for the A-shares [3][8] Core Views - Guotai Junan's merger with Haitong Securities is expected to create a strong synergy, combining customer bases, service capabilities, and operational management [3] - The merged entity will have the largest balance sheet in the industry, with a balanced structure and leading positions in retail, institutional, and corporate client segments [5] - The merger is expected to enhance the new company's competitive advantages in investment banking, asset management, and international operations [5] - The report highlights the potential for significant stock price recovery post-merger, given the current undervaluation of both Guotai Junan and Haitong Securities [6] Merger Details - The merger involves a share swap ratio of 1:0.62, with Haitong shareholders receiving 0.62 Guotai Junan shares for each Haitong share [3] - The A-share swap prices are set at CNY 8.57 for Haitong and CNY 13.83 for Guotai Junan, while the H-share swap prices are HKD 4.79 for Haitong and HKD 7.73 for Guotai Junan [4] - The merger will be accompanied by a private placement of up to CNY 10 billion, with the Shanghai State-owned Assets Company subscribing to the entire issuance [4] Financial Projections - The report forecasts EPS for Guotai Junan to increase from CNY 1.18 in 2024 to CNY 1.83 in 2026, up from previous estimates of CNY 0.95, CNY 1.05, and CNY 1.13 respectively [3] - Revenue is expected to grow from CNY 37.66 billion in 2024 to CNY 51.37 billion in 2026, with net profit attributable to shareholders rising from CNY 10.5 billion to CNY 16.31 billion over the same period [7][17] - The ROE is projected to improve from 6.17% in 2024 to 8.75% in 2026 [17] Market Context - The report notes a significant recovery in market activity during the suspension period, with A-share trading volumes hitting record highs [6] - The current PB ratios for Guotai Junan A-shares and H-shares are 0.88x and 0.43x respectively, indicating potential for price recovery post-merger [6] - The merged entity is expected to benefit from increased market share in key areas such as wealth management, investment banking, and asset management [5] Valuation and Peer Comparison - The report applies a discount to the 2024E PB ratios for Guotai Junan A-shares and H-shares, setting them at 1.35x and 0.70x respectively, compared to the Wind consensus averages of 1.49x and 0.77x [3] - Peer comparisons show that Guotai Junan's valuation is lower than that of leading competitors such as CITIC Securities and CICC, suggesting room for valuation expansion [13][14]