Tianfeng Securities·2024-11-01 01:01Investment Rating - The report maintains a "Buy" rating for Guotai Junan Securities with a target price of 18.66 CNY, indicating an expected return of over 20% within the next six months [1][7]. Core Views - Guotai Junan's performance in the first three quarters of 2024 exceeded expectations, with a notable increase in self-operated business profits contributing significantly to overall earnings growth [1]. - The capital market has shown signs of recovery, leading to a substantial increase in self-operated business revenue, which is expected to enhance profits further [1]. - The report highlights the challenges faced in brokerage, investment banking, and asset management due to regulatory tightening and market conditions, but emphasizes the resilience of the credit business [1]. Summary by Sections Financial Performance - In Q3 2024, Guotai Junan achieved adjusted revenues of 93 billion CNY, a year-on-year increase of 33.2%, and a net profit of 45 billion CNY, up 56.2% year-on-year. For the first three quarters, revenues reached 227 billion CNY, growing 3.1% year-on-year, with net profits of 95 billion CNY, reflecting a 10.4% increase [1]. - The self-operated business saw a remarkable revenue increase of 127.8% in Q3 2024, contributing to a total of 107.2 billion CNY for the first three quarters, a 38.5% increase year-on-year [1]. Business Segments - Brokerage business revenue declined by 12.7% year-on-year to 44.5 billion CNY due to low market activity, with average daily trading volume down 8.6% [1]. - Investment banking revenue fell by 32.3% to 18.0 billion CNY, impacted by tightened regulations on IPOs and refinancing [1]. - Asset management revenue decreased by 8.4% to 28.6 billion CNY, primarily due to reduced fees in public funds [1]. Market Outlook - The report anticipates that Guotai Junan will benefit from increased market activity and new capital market tools, which will enhance the flexibility of its self-operated business [1]. - Future profit forecasts for 2024, 2025, and 2026 have been adjusted to 110 billion CNY, 152 billion CNY, and 157 billion CNY respectively, with expected year-on-year growth rates of 17.2%, 38.1%, and 3.5% [1].