HTSC(601688) Soochow Securities·2024-11-01 16:38Investment Rating - The investment rating for Huatai Securities is "Buy" (maintained) [1] Core Views - The report highlights that Huatai Securities' Q1-Q3 2024 revenue increased by 15.41% year-on-year to 31.424 billion yuan, and net profit attributable to shareholders rose by 30.63% to 12.521 billion yuan. However, the net profit excluding non-recurring items decreased by 35.29% to 6.319 billion yuan [1] - The sale of AssetMark significantly boosted investment income, with the transaction generating a total of 6.229 billion yuan in the third quarter, leading to a 261% year-on-year increase in investment income to 9.431 billion yuan [1] - The report notes a decline in proprietary business income, while net interest income saw substantial growth, increasing by 52% year-on-year to 1.3 billion yuan in Q1-Q3 2024 [1] - The investment banking business faced challenges due to tightened regulations, resulting in a 41% year-on-year decline in investment banking revenue to 1.357 billion yuan [1] - The asset management business revenue decreased by 4% year-on-year to 3.03 billion yuan in Q1-Q3 2024, with a 24% decline in Q3 alone [1] Summary by Sections Revenue and Profit Forecast - The report projects Huatai Securities' net profit attributable to shareholders for 2024-2026 to be 16.153 billion, 13.488 billion, and 14.400 billion yuan respectively, with corresponding growth rates of 26.68%, -16.50%, and 6.76% [1] - The expected EPS for the same period is 1.79, 1.49, and 1.60 yuan, with the current market capitalization corresponding to PB valuations of 0.94, 0.89, and 0.84 times [1] Business Segments - Proprietary business revenue for Q1-Q3 2024 was 5.810 billion yuan, down 24% year-on-year, while net interest income for the same period was 1.3 billion yuan, reflecting a significant increase [1] - The brokerage business saw a 14% year-on-year decline in revenue to 3.97 billion yuan, with a notable drop in market trading volume [1] - The asset management business reported a revenue decrease of 4% year-on-year to 3.03 billion yuan, attributed to fee reductions [1]