Guotai Haitong Securities(SH:601211) KAIYUAN SECURITIES·2025-04-11 10:23Investment Rating - The investment rating for Guotai Haitong (601211.SH) is "Buy" (first coverage) [1] Core Views - The merger between Guotai Junan and Haitong Securities is the first major merger among leading brokerages since the release of the new "National Nine Articles" in 2024, marking a significant consolidation in China's capital markets [4] - The merger is expected to enhance the company's customer base, service capabilities, and operational efficiency, leading to a long-term improvement in ROE [4] - The projected net profit for Guotai Junan from 2025 to 2027 is estimated at 15.6 billion, 18.7 billion, and 21.3 billion yuan, respectively, with year-on-year growth of 20%, 20%, and 14% [4] - Post-merger, the expected net profit for the combined entity from 2025 to 2027 is projected to be 26 billion, 27.3 billion, and 33.4 billion yuan, with year-on-year growth of 187%, 5%, and 22% [4] Summary by Sections Merger and Integration - The merger is characterized as a strong union, with the combined entity expected to have the highest capital strength in the industry, with total assets of 1.73 trillion yuan and net assets of 328.3 billion yuan post-merger [5] - The merger is anticipated to create significant synergies, enhancing ROE beyond the individual peaks of both companies [5][6] - The integration process has been efficient, taking approximately eight months from planning to completion [15] Financial Performance and Projections - The financial summary indicates that the operating revenue for 2023 is 36.14 billion yuan, with projections of 43.4 billion, 47.35 billion, 52.05 billion, and 56.08 billion yuan for 2024 to 2027, respectively [6] - The net profit margin is expected to improve from 25.9% in 2023 to 37.9% by 2027, reflecting enhanced operational efficiency [6] - The projected ROE is expected to rise from 5.8% in 2023 to 10.5% by 2027, indicating a robust return on equity trajectory [6] Competitive Positioning - Guotai Junan has consistently demonstrated superior ROE compared to its peers, benefiting from a higher equity multiplier and stable self-investment returns [5][27] - The merger is expected to enhance the competitive positioning of the combined entity, allowing it to rank among the top global investment banks [4][5] - The combined customer base is projected to reach nearly 40 million retail clients, with significant monthly active users on their app, further solidifying their market leadership [5]