Hua Yuan Zheng Quan·2026-03-21 11:45Investment Rating - The report assigns a "Buy" rating for the company, indicating a positive outlook for its stock performance in the near term [5][11][54]. Core Views - The company has a stable and diversified shareholding structure, with no controlling shareholder, which enhances its governance and stability [5][18]. - The asset management business is a key strength, contributing significantly to the company's profitability, with major contributions from its controlled and affiliated funds [7][22]. - The investment banking segment shows signs of recovery, with a notable increase in market share for both A-share IPOs and bond underwriting [8][34]. - International business expansion is supported by capital injections, enhancing the company's growth potential in overseas markets [9][41]. - The company has established a first-mover advantage in digital finance by issuing the first tokenized security in Hong Kong, which may strengthen its market position [43]. Summary by Sections 1. Investment Management - The asset management business is a cornerstone of the company's operations, with significant contributions from both its controlled and affiliated funds [22][23]. - The public fund business has seen a rebound in new fund issuance, with a record high in January 2026, indicating a positive trend for future performance [23][30]. 2. Investment Banking - The investment banking segment is recovering, with market share for A-share IPOs increasing from 0.59% to 1.01% from 2022 to 2025, and bond underwriting market share rising from 1.45% to 2.12% [8][34]. - The company achieved a remarkable 228% year-on-year growth in Hong Kong underwriting, reaching HKD 6.931 billion in 2025, marking its best performance in a decade [8][35]. 3. International Business - The company is actively expanding its international business, with a significant increase in revenue contribution from overseas operations, which rose from 3% to 7% from 2020 to 2025H1 [41]. - Capital injections into overseas subsidiaries are expected to enhance profitability and leverage, with the Hong Kong subsidiary's ROE at 11% as of 2025H1 [41][42]. 4. Financial Projections - The company forecasts net profits of RMB 15.3 billion, RMB 18.9 billion, and RMB 20.8 billion for 2025, 2026, and 2027, respectively, with growth rates of 58%, 24%, and 10% [11][53]. - The current price-to-book (PB) ratio is projected at 0.9 for 2025, indicating potential undervaluation compared to peers [11][54].