Changjiang Securities·2024-03-31 16:00Investment Rating - The investment rating for Huatai Securities is "Buy" and is maintained [8]. Core Views - Huatai Securities demonstrated stable operations in 2023, with profitability improving against market trends, primarily driven by significant growth in proprietary income. The company achieved operating revenue of 36.58 billion yuan, up 14.2% year-on-year, and a net profit attributable to shareholders of 12.75 billion yuan, up 15.4% year-on-year. The weighted average return on equity (ROE) increased by 0.63 percentage points to 8.12% [6][7]. Summary by Sections Business Performance - The revenue breakdown by business lines shows brokerage, investment banking, asset management, interest income, and proprietary income at 5.96 billion, 3.04 billion, 4.26 billion, 0.95 billion, and 14.26 billion yuan, respectively, with year-on-year changes of -15.8%, -24.5%, +12.9%, -63.8%, and +96.7% [6][7]. Retail Brokerage - The "Zhangle Wealth" platform continues to empower retail brokerage, maintaining a stable market share. In 2023, the trading volume of stock and fund transactions was 37.2 trillion yuan, down 4.1% year-on-year, with a market share of 7.7%, a decrease of 0.10 percentage points. The net commission rate was 0.013%, down 9.6% year-on-year. The monthly active users of the Zhangle Wealth app reached 9.064 million, up 2.2% year-on-year, with 96.8% of transactions conducted through the app, an increase of 0.05 percentage points [6][7]. Proprietary Investments - The expansion of proprietary assets accelerated, with the total financial assets reaching 480 billion yuan, up 16.8% year-on-year. The static investment return rate was 3.2%, an increase of 1.4 percentage points year-on-year. Regulatory indicators such as the net stable funding ratio and liquidity coverage ratio were 130.8% and 152.5%, respectively, remaining above warning standards [6][7]. Asset Management - The asset management scale stabilized at 475.5 billion yuan, down 0.9% year-on-year, with public funds accounting for 20.2%, an increase of 0.8 percentage points. The public fund subsidiaries performed well, with Huatai Baichuan and Southern Fund achieving net profits of 0.5 billion and 2.01 billion yuan, respectively, contributing 1.9% and 6.5% to the net profit attributable to the parent company [6][7]. Investment Banking - The investment banking sector saw a decline in IPO market share, with the scale of IPOs, refinancing, and bond financing at 17.4 billion, 38.4 billion, and 666.2 billion yuan, respectively, with year-on-year changes of -45.7%, -24.4%, and +34.6%. The estimated market shares were 4.8%, 5.4%, and 0.9%, with changes of -1.28, +0.85, and +0.13 percentage points [6][7]. Future Outlook - Huatai Securities is positioned as a pioneer in technology-enabled brokerage services, with successful platforms like "Zhangle Wealth" and "Xingzhi." The leading layout in wealth management and financial technology is expected to continue yielding positive effects. The projected net profits attributable to shareholders for 2024 and 2025 are 13.19 billion and 15.83 billion yuan, respectively, with corresponding price-to-earnings (PE) ratios of 9.5 and 7.9, and price-to-book (PB) ratios of 0.65 and 0.60 [6][7].