CGS(SH:601881) Haitong Securities·2024-11-03 06:41Investment Rating - The investment rating for the company is "Outperform the Market" and is maintained [1]. Core Views - The report highlights that the company's brokerage business is under pressure, while proprietary trading has driven performance growth. The investment banking segment has seen impressive bond underwriting results, and the asset management business has completed its public offering transformation, with a slight year-on-year revenue increase and continuous growth in actively managed assets. The reasonable value range is set at 13.62-14.60 CNY, maintaining the "Outperform the Market" rating [4][6]. Financial Performance Summary - For the first three quarters of 2024, the company achieved operating revenue of 27.09 billion CNY, a year-on-year increase of 6.3%. The net profit attributable to the parent company was 6.96 billion CNY, up 5.5% year-on-year, with an EPS of 0.55 CNY and an ROE of 5.8%, down 0.9 percentage points year-on-year. In Q3 alone, operating revenue reached 10.00 billion CNY, a year-on-year increase of 23.9% and a quarter-on-quarter increase of 1.3%. The net profit for Q3 was 2.58 billion CNY, up 54.8% year-on-year but down 6.5% quarter-on-quarter [4][5]. Business Segment Performance - The brokerage business saw a slight decline, with revenue of 3.69 billion CNY in the first three quarters of 2024, down 12.1% year-on-year, accounting for 23.4% of total revenue. The average daily trading volume in the market was 897.6 billion CNY, down 7.8% year-on-year. The company's margin financing balance was 84.7 billion CNY, down 7% from the beginning of the year, with a market share of 5.9%, an increase of 0.4 percentage points year-to-date [5]. - The investment banking segment reported revenue of 370 million CNY, up 11.0% year-on-year, with bond underwriting up 26.3% year-on-year. The company ranked 7th in bond underwriting with a total of 327.2 billion CNY [5][6]. - The asset management business generated revenue of 350 million CNY, a year-on-year increase of 2.1%, with total assets under management reaching 101.7 billion CNY, up 7.6% year-on-year [6]. Investment Projections - The company is projected to have EPS of 0.86, 0.94, and 0.92 CNY for the years 2024, 2025, and 2026, respectively. The BVPS is expected to be 9.73, 10.07, and 10.44 CNY for the same years. The report assigns a P/B ratio of 1.4-1.5x for 2023, corresponding to a reasonable value range of 13.62-14.60 CNY, maintaining the "Outperform the Market" rating [6][9].