Zheshang Securities(SH:601878) Haitong Securities·2024-04-13 16:00Investment Rating - The investment rating for the company is "Outperform the Market" and is maintained [2][4]. Core Views - The company, headquartered in Zhejiang, has established a comprehensive financial industry layout including securities, futures, funds, asset management, and venture capital. The wealth management transformation is continuously upgrading, aiming to strengthen investment banking operations, and the progress in public fund management is promising. The reasonable value range is estimated at 11.18-11.92 CNY per share, maintaining the "Outperform the Market" rating [4][5]. Financial Performance - In 2023, the company achieved operating revenue of 17.64 billion CNY, a year-on-year increase of 4.9%. The net profit attributable to the parent company was 1.75 billion CNY, up 6.0% year-on-year, with an EPS of 0.46 CNY and ROE of 6.6%. In Q4, the operating revenue was 5.02 billion CNY, down 4.1% year-on-year but up 20.4% quarter-on-quarter. The net profit for Q4 was 420 million CNY, down 15.0% year-on-year but up 1.0% quarter-on-quarter [4][6]. Business Segments - The brokerage business revenue was 1.65 billion CNY, down 11.7% year-on-year, accounting for 9.4% of total revenue. The revenue from selling financial products was 255 million CNY, down 15.9% year-on-year, making up 15.4% of brokerage revenue. The scale of sold financial products reached 43.8 billion CNY, up 27.3% year-on-year. The margin trading balance was 19.5 billion CNY, up 14% from the beginning of the year, with a market share of 1.18%, an increase of 0.07 percentage points year-on-year [4][5]. - The investment banking business revenue grew against the trend, reaching 880 million CNY, up 12.6% year-on-year. The underwriting scale for equity business increased by 10.8% year-on-year, while the bond underwriting scale surged by 73.4% year-on-year. The main underwriting scale for equity was 9.66 billion CNY, ranking 35th, with 3 IPOs raising 3.1 billion CNY and 10 refinancing projects totaling 6.6 billion CNY. The bond underwriting scale was 140.7 billion CNY, ranking 22nd [4][5]. - The asset management revenue slightly declined to 420 million CNY, down 3.4% year-on-year, with an asset management scale of 91.1 billion CNY, a decrease of 0.7% year-on-year. The total sales of public funds and various collective products reached 79.8 billion CNY, with 158 new products launched, totaling 7.5 billion CNY in issuance [5][6]. - The proprietary trading segment saw significant growth from a low base, with investment income (including fair value) reaching 1.02 billion CNY, up 49.6% year-on-year. In Q4, the investment income was 140 million CNY, a staggering increase of 706.3% year-on-year [5][6]. Earnings Forecast - The estimated EPS for 2024-2026 is projected to be 0.49, 0.53, and 0.57 CNY respectively, with BVPS of 7.45, 7.86, and 8.25 CNY. Using comparable company valuation methods, a PB of 1.5-1.6x for 2024 is suggested, corresponding to a reasonable value range of 11.18-11.92 CNY per share, maintaining the "Outperform the Market" rating [5][11].