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Investment Rating - The report assigns a "Buy" rating for China Galaxy Securities [3] Core Views - China Galaxy Securities is expected to benefit from the optimization of risk control indicators and has the potential to expand capital through mergers and acquisitions due to its status as a leading state-owned enterprise under the Central Huijin Investment Company [2][7] - The company has accelerated its international expansion, particularly in Southeast Asia, with the completion of the acquisition of 100% of Galaxy-CIMB Securities and Galaxy-CIMB Holdings by the end of 2023 [2][7] Summary by Sections Company Overview - China Galaxy Securities is a leading comprehensive financial service provider in the domestic securities industry, backed by strong shareholder strength and a broad business network [10] Development History - Established in 2000, the company has steadily expanded its business and capital, issuing convertible bonds worth 7.8 billion yuan in 2022, which significantly enhanced its capital strength [11] Shareholder Structure - Central Huijin Investment Company holds 49.15% of the shares, making it the largest shareholder, with the central government being the ultimate controller [13] Financial Summary - For the first three quarters of 2023, the company reported operating revenue of 25.48 billion yuan and a net profit attributable to shareholders of 6.60 billion yuan, with a year-on-year change of -6.6% and +2.5% respectively [16] ROE Analysis - The company ranks third in the industry for weighted ROE at 6.7%, driven by high operational leverage, particularly in self-operated fixed-income assets [17][20] Business Analysis - The company has a strong offline channel and customer base, with 479 securities branches, significantly higher than its peers [6][22] Wealth Management - The company has a robust brokerage business, with 15 million brokerage clients and a market share of 5% in margin financing [22][31] Asset Management - The asset management scale has decreased due to regulatory changes, with a total of 110.85 billion yuan as of mid-2023, while actively enhancing its management capabilities [25] Investment Banking - The investment banking segment is currently a weakness, with a net income from securities underwriting of 330 million yuan, ranking 24th in the industry [29][30] Credit Business - The margin financing market share remains stable at around 5%, with a total margin financing balance of approximately 800 billion yuan [31] Proprietary Investment - The company has seen rapid growth in its financial asset scale, with a total of 387.2 billion yuan as of mid-2023, and self-operated income has become a stable revenue source [33][34]