SINOLINK SECURITIES·2025-04-30 03:23Investment Rating - The report maintains a "Buy" rating for the company, with an expected price-to-book (PB) ratio of 0.9 for 2025 [4]. Core Insights - The company reported significant growth in Q1 2025, with total revenue reaching 11.8 billion RMB, a year-over-year increase of 47%, and a net profit attributable to shareholders of 12.2 billion RMB, up 392% year-over-year [2]. - The substantial increase in net profit is attributed to the absorption of Haitong Securities, which generated additional non-operating income due to negative goodwill [2]. - The company's performance is driven by a low base effect from the previous year and an improved market environment, particularly in brokerage and investment businesses [2]. Summary by Sections Performance Review - In Q1 2025, the brokerage business net income increased by 77% year-over-year to 2.7 billion RMB, benefiting from a market recovery with an average daily trading volume of 17.5 trillion RMB, up 71% year-over-year [2][3]. - Investment banking revenue saw a 10% increase year-over-year to 700 million RMB, although IPO and refinancing activities faced declines of 13% and 75%, respectively [3]. - Asset management revenue rose by 27% year-over-year to 1.2 billion RMB, with significant growth in public fund sizes for various funds [3]. - Proprietary trading income increased by 67% year-over-year to 4 billion RMB, supported by a 39% rise in proprietary asset scale [3]. Profit Forecast and Valuation - The company is expected to achieve net profits of 20.1 billion RMB, 18.5 billion RMB, and 21.9 billion RMB for the years 2025 to 2027, reflecting growth rates of 54%, -8%, and 18%, respectively [4]. - The report emphasizes that the merger will enhance competitiveness across wealth management, investment banking, asset management, and institutional business lines, facilitating the company's goal of becoming a leading international investment bank [4].