Shenwan Hongyuan Securities·2026-01-12 10:13Investment Rating - The report maintains a "Buy" rating for Guotai Junan Securities, with a target valuation indicating a potential upside of 28% from the current levels [4][7]. Core Insights - The merger of Guotai Junan and Haitong Securities is showing initial positive results, with the company positioned to align closely with CITIC Securities, enhancing its market presence and operational efficiency [4][6]. - The report highlights the company's improved valuation metrics and operational capabilities post-merger, suggesting that Guotai Junan is on track to catch up with CITIC Securities in terms of fundamental performance [4][6]. - The report emphasizes the favorable external environment, including a potential decline in overseas financing costs and a shift in resident deposits, which could enhance the company's operational flexibility [4][6]. Financial Data and Profit Forecast - Revenue projections for Guotai Junan are as follows: - 2023: 36,141.29 million - 2024: 43,397.13 million (20.08% YoY growth) - 2025E: 62,138.06 million (43.18% YoY growth) - 2026E: 68,576.14 million (10.36% YoY growth) - 2027E: 72,304.30 million (5.44% YoY growth) [5] - Net profit attributable to the parent company is forecasted as: - 2023: 9,374.15 million - 2024: 13,024.08 million (38.94% YoY growth) - 2025E: 27,657.89 million (112.36% YoY growth) - 2026E: 29,528.10 million (6.76% YoY growth) - 2027E: 31,607.95 million (7.04% YoY growth) [5] - The report anticipates a return on equity (ROE) of 6.02% in 2023, increasing to 9.80% by 2025E, before stabilizing around 7.13% in 2026E and 7.35% in 2027E [5]. Strategic Developments - The merger has led to a significant enhancement in the company's organizational structure, with a focus on functional committees to streamline operations and improve efficiency [6][22]. - Guotai Junan is expected to leverage its expanded asset base and improved capital efficiency to enhance its cross-border derivative and international business capabilities [6][9]. - The company aims to strengthen its wealth management and asset management capabilities, with a focus on expanding its client base and service offerings [33][34]. Market Positioning - Guotai Junan has positioned itself as a leading player in the financial services sector, with a significant increase in its market presence and operational metrics post-merger [6][19]. - The company is now ranked among the top ten global investment banks, reflecting its enhanced capabilities and market positioning [17][19]. Valuation and Market Outlook - The report suggests that Guotai Junan's valuation should align with that of CITIC Securities, with a target price-to-book (P/B) ratio of 1.53x, indicating a substantial upside potential [7][19]. - The anticipated growth in net profit and revenue, coupled with improved operational metrics, positions Guotai Junan favorably for future performance [5][7].