CGS(601881) 海通证券·2024-03-31 16:00Investment Rating - The report maintains an "Outperform" rating for the company [1] Core Views - The company has shown strong performance in proprietary trading, while overall operations remain stable. However, the brokerage business is under pressure due to a decline in market activity. The investment banking sector has seen significant growth in bond underwriting, and the asset management business has completed its public offering transformation, although revenue has slightly decreased year-on-year. The reasonable value range for the stock is estimated at 13.59-14.56 CNY [4][5] Financial Performance - In 2023, the company achieved operating revenue of 33.64 billion CNY, which is essentially flat year-on-year. The net profit attributable to shareholders was 7.88 billion CNY, reflecting a year-on-year increase of 1.5%. The earnings per share (EPS) was 0.65 CNY, with a return on equity (ROE) of 7.5%. In Q4, the operating revenue reached 8.16 billion CNY, up 28.2% year-on-year, while the net profit was 1.28 billion CNY, down 3.4% year-on-year due to credit impairment losses [4][6] Brokerage Business - The brokerage business experienced a slight decline, with the company's brokerage revenue at 5.50 billion CNY, down 13.6% year-on-year, accounting for 16.4% of total operating revenue. The average daily trading volume in the market was 962.5 billion CNY, down 4.0% year-on-year, while the margin financing balance increased by 7% year-to-date [4][5] Investment Banking - The investment banking sector showed strong performance in bond underwriting, with a bond underwriting scale increase of 40.4% year-on-year. The company ranked 12th in bond underwriting with a total of 358 billion CNY. However, equity underwriting saw a significant decline of 68.4% year-on-year [4][5] Asset Management - The asset management business saw revenue growth of 3.7% year-on-year, reaching 460 million CNY. The total asset management scale was 94.6 billion CNY, down 17.8% year-on-year. The company has been actively developing and enhancing its product offerings, focusing on themes such as ESG and dividends [5] Proprietary Trading - The proprietary trading segment performed exceptionally well, contributing significantly to the company's growth. The total investment income (including fair value) for 2023 was 7.66 billion CNY, up 37.0% year-on-year, with Q4 investment income reaching 1.83 billion CNY, a remarkable increase of 153.6% year-on-year [5] Earnings Forecast - The company is expected to achieve EPS of 0.81, 0.87, and 0.91 CNY for the years 2024, 2025, and 2026 respectively, with book value per share (BVPS) projected at 9.70, 10.27, and 10.87 CNY for the same years [5][6]