Minsheng Securities·2025-05-01 10:55Investment Rating - The report maintains a "Recommended" rating for the company, indicating an expected price increase of over 15% relative to the benchmark index within the next 12 months [7]. Core Insights - In Q1 2025, the company reported operating revenue of 17.8 billion yuan, a year-on-year increase of 29.1%, and a net profit attributable to shareholders of 6.5 billion yuan, reflecting a year-on-year growth of 32.0% [1][7]. - The revenue structure shows significant growth in fee-based income, while proprietary trading income rebounded quarter-on-quarter but showed mixed performance in year-on-year comparisons [1][2]. - The company is expected to achieve revenues of 69.5 billion yuan, 74.9 billion yuan, and 80.7 billion yuan for the years 2025, 2026, and 2027 respectively, with net profits projected at 23.1 billion yuan, 25.0 billion yuan, and 27.1 billion yuan for the same years [7][9]. Revenue Breakdown - Proprietary Trading: In Q1 2025, proprietary trading income was 8.9 billion yuan, with a year-on-year growth of 62% and a quarter-on-quarter increase of 89.3% [2]. - Brokerage Business: The brokerage business net income grew by 36.2% year-on-year, with total transaction volume in the stock market reaching 100 trillion yuan, a 68% increase year-on-year [3]. - Asset Management: Asset management income increased by 8.7% year-on-year, with a stable contribution from Huaxia Fund, which reported a total AUM of 1.91 trillion yuan [4]. - Investment Banking: Investment banking revenue saw a significant year-on-year increase of 212% in refinancing, although IPO underwriting scaled down [4][6]. - Credit Business: The credit business faced challenges with net interest income turning negative due to reduced interest income and increased interest expenses [6]. Financial Metrics - The company maintained a high return on equity (ROE) of 9.5% annualized, with a net profit margin of 36.9%, both reflecting strong operational efficiency [7]. - The projected price-to-earnings (PE) ratios for 2025, 2026, and 2027 are 16, 15, and 14 respectively, indicating a favorable valuation outlook [9].