CGS(601881) 国泰君安·2024-10-31 18:36Investment Rating - The report maintains an "Accumulate" rating for China Galaxy Securities (601881) with a target price raised to 16.68 CNY, corresponding to a 2024 price-to-book ratio of 1.7x [3][5]. Core Insights - The company has benefited from investment boosts, achieving positive profit growth in the first three quarters of 2024. The long-term view indicates that the company is halfway through its three-year strategic plan, continuously enhancing its professional capabilities, and is expected to seize opportunities for first-class investment banking development, leading to better-than-expected growth [4][5]. Financial Performance Summary - For the first three quarters of 2024, the company reported revenue and net profit attributable to shareholders of 27.09 billion CNY and 6.96 billion CNY, respectively, representing year-on-year increases of 6.3% and 5.5%. In Q3 alone, the net profit attributable to shareholders was 2.58 billion CNY, showing a year-on-year increase of 54.8% but a quarter-on-quarter decrease of 6.5%, which aligns with expectations. The weighted average return on equity (ROE) decreased by 0.9 percentage points to 5.80% [5][6]. - The investment business net income for the first three quarters increased by 49.9% to 8.74 billion CNY, with Q3 alone contributing 3.82 billion CNY, a year-on-year increase of 226% and a quarter-on-quarter increase of 16%. The investment income in Q3 reached a historical high, primarily driven by a significant improvement in yield, with an investment return rate of 3.76%, up by 2.56 percentage points year-on-year and 0.61 percentage points quarter-on-quarter [5][6]. Strategic Developments - The acceleration of supply-side reforms in the industry is ongoing, and the company is advancing its three-year strategic plan, which is expected to enable it to capitalize on opportunities for building a first-class investment bank. The new "National Nine Articles" focuses on returning to the essence of the industry and strengthening leading institutions through mergers, reorganizations, and organizational innovations to enhance core competitiveness [5][6].