HTSC(601688) Huachuang Securities·2024-11-05 11:37Investment Rating - The report maintains a "Recommended" rating for Huatai Securities with a target price of 23.25 CNY, compared to the current price of 19.66 CNY [1]. Core Views - The report highlights significant net profit growth driven by the sale of AssetMark, with a reported net profit of 12.52 billion CNY for the third quarter of 2024, representing a year-on-year increase of 30.6% [1]. - Excluding the investment income from AssetMark, the net profit would have been 6.29 billion CNY, reflecting a year-on-year decrease of 34.4% [1]. - The report indicates that the company's self-operated business revenue remains stable when excluding AssetMark's investment income, with a total of 71.2 billion CNY in net income from heavy capital business [1]. Financial Performance Summary - Total operating revenue for the third quarter of 2024 was 241 billion CNY, a slight decrease of 0.5% year-on-year, with a quarterly revenue of 118 billion CNY, showing a significant quarter-on-quarter increase of 51.8 billion CNY [1]. - The company's self-operated business revenue, excluding AssetMark, was 58.1 billion CNY, with a quarterly revenue of 15.9 billion CNY, reflecting a quarter-on-quarter decrease of 7.4 billion CNY [1]. - Interest income from credit business was reported at 9.94 billion CNY, with a quarter-on-quarter decrease of 209 million CNY [1]. - The report projects earnings per share (EPS) for 2024, 2025, and 2026 to be 1.73 CNY, 1.52 CNY, and 1.88 CNY respectively, with corresponding book values per share (BPS) of 18.32 CNY, 19.38 CNY, and 20.67 CNY [1][3]. Business Segment Performance - Brokerage business revenue was reported at 39.7 billion CNY, with a quarterly revenue of 12.4 billion CNY, showing a quarter-on-quarter decrease of 9% [1]. - Investment banking revenue increased quarter-on-quarter, reaching 13.6 billion CNY, with a quarterly revenue of 4.3 billion CNY, reflecting a quarter-on-quarter increase of 0.7 billion CNY [1]. - Asset management revenue decreased to 30.3 billion CNY, with a quarterly revenue of 8.1 billion CNY, showing a quarter-on-quarter decline [1]. Valuation Metrics - The report provides a projected price-to-book (PB) ratio of 1.01 for 2024, decreasing to 0.89 by 2026, indicating a favorable valuation compared to peers [1][3]. - The return on equity (ROE) is projected to be 9.45%, 7.85%, and 9.11% for 2024, 2025, and 2026 respectively [1].