Caitong Securities(601108) 东吴证券·2024-11-19 11:08Investment Rating - The report gives a "Buy" rating for the company, marking its first coverage [1]. Core Views - The company is positioned as a leading securities firm in Zhejiang, leveraging its state-owned background and extensive local partnerships to enhance its market presence and service offerings [1][18]. - The firm is focusing on wealth management through internet-based solutions, aiming to build a competitive edge in asset management and financial services [1][62]. - The company is experiencing stable growth in its core business areas, with a strategic emphasis on low-risk operations and high stability to ensure consistent growth rates [1][3]. Summary by Sections 1. Rooted in Zhejiang, Serving Global Zhejiang Merchants - The company has a strong state-owned background and has been deeply rooted in Zhejiang for over 30 years, with a clear strategy to serve local businesses [1][18]. - It has established strategic partnerships across 11 cities in Zhejiang and collaborates closely with local chambers of commerce [1][36]. - The government industry fund supports the company's goal of becoming a top-tier investment bank, with a focus on enhancing its investment banking capabilities [1][38]. 2. Internet-Driven Wealth Management, Building Core Competitiveness - The company is leveraging its geographical advantages to grow its asset management scale while maintaining effective risk control [1][62]. - It has proactively engaged in internet finance, rapidly increasing its market share in securities brokerage [1][62]. - The asset management subsidiary aims to strengthen its diverse business structure, focusing on traditional and innovative financial products [1][63]. 3. Low-Risk Operations with High Stability Ensuring Growth Rates - The company maintains stable capital intermediation, with its margin financing and securities lending business outperforming the market [1][3]. - It has achieved record-high self-operated income, with a significant turnaround in net gains from fair value changes [1][3]. - The firm is focused on cross-cycle development, enhancing its investment strategies across various asset classes [1][3]. 4. Earnings Forecast and Investment Rating - The company forecasts net profits of 22 billion, 26 billion, and 32 billion yuan for 2024, 2025, and 2026, respectively, with a slight decline in 2024 followed by growth in subsequent years [1][3]. - The report assigns a price-to-book ratio of 1.11, 1.06, and 1.01 for the years 2024, 2025, and 2026, reflecting a strategic transition towards light asset operations [1][3].