Founder Securities(SH:601901) Haitong Securities·2024-03-19 16:00Investment Rating - The investment rating for the company is "Outperform the Market" and is maintained [2][5][12]. Core Views - The report indicates that major risks for the company have largely been resolved, which is expected to lead to a recovery in leverage and ROE. The heavy asset business shows growth potential. With China Ping An becoming the controlling shareholder, there is an expectation for better synergy, and the valuation has room for upward adjustment. The target price is set at a reasonable value range of 8.95-9.54 CNY, based on a 1.5-1.6x 2024E PB [5][6][12]. Summary by Sections Financial Performance - In 2023, the company achieved operating revenue of 7.12 billion CNY, a year-on-year decrease of 8.5%. The net profit attributable to the parent company was 2.15 billion CNY, a slight increase of 0.2%, resulting in an EPS of 0.26 CNY and an ROE of 4.9%. The company's leverage ratio improved to 4.26 times, up by 0.75 times from 2022 [5][7][12]. - The fourth quarter saw operating revenue of 1.45 billion CNY, down 22.5% year-on-year and 10.1% quarter-on-quarter. The net profit for the fourth quarter was 220 million CNY, up 4.3% year-on-year but down 56.4% quarter-on-quarter [5][6]. Business Segments - The brokerage business revenue was 3.27 billion CNY, down 9.1% year-on-year, accounting for 46.0% of total revenue. The company’s income from selling financial products grew by 6.6% year-on-year to 250 million CNY, representing 7.6% of brokerage income. The margin trading balance increased by 18% year-to-date to 30.9 billion CNY, with a market share of 1.87%, up 0.17 percentage points year-on-year [5][6][12]. - Investment banking faced challenges, with revenue dropping by 60.4% year-on-year to 210 million CNY. The underwriting scale for equity and debt also declined, with equity underwriting down 22.1% and debt underwriting down 51.3% [5][6]. Asset Management - The asset management business generated revenue of 180 million CNY, a decrease of 23.2% year-on-year, with total assets under management declining by 19% to 57.7 billion CNY due to various market factors [6][12]. - The self-operated business saw significant growth, with investment income (including fair value) reaching 1.7 billion CNY, up 53.5% year-on-year, and total self-operated assets growing by 39.9% to 105.8 billion CNY [6][12]. Future Projections - The company expects EPS for 2024-2026 to be 0.30, 0.33, and 0.36 CNY respectively, with BVPS projected at 5.96, 6.24, and 6.68 CNY [6][12].