Zhongyuan Securities·2024-04-07 16:00Investment Rating - The report maintains an "Accumulate" rating for Huatai Securities, indicating an expected price increase of 5% to 15% relative to the CSI 300 index over the next six months [36]. Core Views - The company achieved significant recovery in investment income, with a year-on-year increase of 96.77% in investment income (including fair value changes) [5][23]. - International business revenue grew by 19.49% year-on-year, further enhancing its revenue share [28]. - Despite a slight decline in brokerage and investment banking fee income due to market conditions, the overall performance exceeded expectations [30]. Summary by Sections Financial Performance - In 2023, Huatai Securities reported operating income of 36.578 billion yuan, up 14.19% year-on-year, and a net profit attributable to shareholders of 12.751 billion yuan, up 15.35% year-on-year [5][8]. - The basic earnings per share (EPS) was 1.35 yuan, reflecting a 14.41% increase year-on-year [5][8]. - The return on equity (ROE) was 8.12%, an increase of 0.63 percentage points year-on-year [5][8]. Business Segments - Investment income (including fair value changes) accounted for 39.0% of total income in 2023, a significant increase from 22.6% in 2022 [9]. - Brokerage business net income decreased by 15.75% year-on-year, while investment banking fees fell by 24.53% [5][13]. - Asset management business net income increased by 12.92% year-on-year, indicating growth in public fund business [20]. Future Projections - Expected EPS for 2024 and 2025 are projected at 1.30 yuan and 1.43 yuan, respectively, with corresponding book value per share (BVPS) of 17.75 yuan and 18.67 yuan [30]. - The report anticipates a price-to-book (P/B) ratio of 0.80 and 0.76 for 2024 and 2025, respectively, based on the closing price of 14.12 yuan on April 3, 2024 [30]. Market Position - Huatai Securities maintained a strong position in the market, ranking fourth in equity underwriting and third in bond underwriting [14][28]. - The company’s international business platform, Huatai International, has assets exceeding 200 billion HKD, solidifying its position among the top Chinese brokers in Hong Kong [28].