Founder Securities(SH:601901) Huachuang Securities·2024-04-23 09:32Investment Rating - The report maintains a "Recommended" rating for the company, with a target price of 9.3 CNY, reflecting a valuation of 1.6 times the price-to-book ratio for 2024 [2][5]. Core Insights - The company's Q1 2024 performance exceeded expectations, driven by significant leverage increase and improved self-operated yield, with total revenue reaching 1.98 billion CNY (up 12% year-on-year) and net profit attributable to shareholders at 780 million CNY (up 41% year-on-year) [2]. - The growth in revenue was primarily from heavy capital business, which saw a net income increase of 200 million CNY year-on-year, while light capital business revenue remained stable [2]. - The financial leverage ratio increased to 4.1 times (up 0.58 times year-on-year), indicating potential for further leverage growth [2]. Summary by Sections Revenue and Profitability - Total revenue for Q1 2024 was 1.98 billion CNY, with a year-on-year growth of 12% [2]. - Net profit attributable to shareholders was 780 million CNY, reflecting a year-on-year increase of 41% [2]. - The return on equity (ROE) for the quarter was 1.7%, up 0.4 percentage points year-on-year [2]. Business Segments - Heavy capital business revenue increased significantly, with net interest income at 240 million CNY (down 150 million CNY year-on-year) due to higher interest expenses [2]. - Self-operated income, primarily from fixed income, reached 1.79 billion CNY, up 380 million CNY year-on-year, with a self-operated yield of 0.7% (up 0.2 percentage points year-on-year) [2]. - Light capital business revenue showed mixed results, with brokerage income stable at 810 million CNY and investment banking income down to 40 million CNY [2]. Financial Projections - The report forecasts earnings per share (EPS) for 2024, 2025, and 2026 at 0.31 CNY, 0.35 CNY, and 0.39 CNY respectively, with corresponding book values per share (BPS) of 5.78 CNY, 6.11 CNY, and 6.48 CNY [2]. - The price-to-earnings (P/E) ratios are projected at 29.5, 24.8, and 22.2 for the years 2023, 2024, and 2025 respectively [3].