SINOLINK SECURITIES·2025-04-30 02:56Investment Rating - The report maintains a "Buy" rating for the company, with a target price set at 0.9 times the price-to-book (PB) ratio for 2025 [4]. Core Insights - The company reported significant growth in Q1 2025, achieving total revenue of 11.8 billion yuan, a year-over-year increase of 47%, and a net profit attributable to shareholders of 12.2 billion yuan, up 392% year-over-year [2]. - The substantial increase in net profit is primarily attributed to the absorption of Haitong Securities, which generated additional non-operating income due to negative goodwill [2]. - The company's performance is expected to benefit from a low base effect from the previous year and an improved market environment [2]. Summary by Sections Performance Overview - In Q1 2025, the brokerage business net income rose by 77% to 2.7 billion yuan, driven by a 71% increase in average daily trading volume in the market [2][3]. - Investment banking revenue increased by 10% to 700 million yuan, although IPO and refinancing activities saw declines of 13% and 75%, respectively [3]. - Asset management revenue grew by 27% to 1.2 billion yuan, with significant growth in public fund sizes for various funds [3]. - Proprietary trading income surged by 67% to 4 billion yuan, supported by a 39% increase in proprietary asset scale [3]. Financial Forecasts - The company is projected to achieve net profits of 20.1 billion yuan, 18.5 billion yuan, and 21.9 billion yuan for the years 2025, 2026, and 2027, respectively, reflecting growth rates of 54%, -8%, and 18% [4]. - Revenue is expected to grow from 36.1 billion yuan in 2023 to 56.8 billion yuan by 2027, with a compound annual growth rate (CAGR) of approximately 9.43% [8]. Market Position - The merger with Haitong Securities is anticipated to enhance the company's competitiveness across wealth management, investment banking, asset management, and institutional business lines, positioning it as a leading international investment bank [4].