2024-04-24 09:02Investment Rating - The report maintains a "Buy" rating for the company [1] Core Views - The company reported a strong recovery in trading activities and improved investment income, leading to a significant increase in revenue and net profit in Q1 2024 [5] - The introduction of five capital market cooperation measures by the China Securities Regulatory Commission is expected to enhance liquidity in the Hong Kong stock market [5] - The report has revised profit forecasts upward due to improved trading conditions and supportive policies, projecting net profits of 12.2 billion, 13.4 billion, and 14.3 billion HKD for 2024-2026, respectively [5] Financial Performance Summary - Q1 2024 total revenue was 5.2 billion HKD, down 6% year-on-year but up 7% quarter-on-quarter; main revenue was 4.66 billion HKD, down 7% year-on-year but up 30% quarter-on-quarter [5] - Net profit for Q1 2024 was 2.97 billion HKD, down 13% year-on-year but up 14% quarter-on-quarter [5] - EBITDA margin was 72%, down 4 percentage points year-on-year but up 4 percentage points quarter-on-quarter [5] Revenue Breakdown - Revenue contributions from trading fees, settlement fees, and investment income accounted for nearly 80% of total revenue [5] - Q1 2024 revenue by segment: cash equities 1.88 billion HKD (-12% YoY), equity securities and derivatives 1.57 billion HKD (-15% YoY), commodities 670 million HKD (+33% YoY), data and connectivity 520 million HKD (+4% YoY) [5] Market Activity - The average daily trading volume (ADT) for Hong Kong stocks in Q1 2024 was 994 billion HKD, down 22% year-on-year but up 9% quarter-on-quarter [5] - Northbound capital inflow was 682 billion RMB, while southbound capital inflow was 1,331 billion HKD in Q1 2024 [10] IPO Market Overview - In Q1 2024, the company completed 12 IPOs, raising 4.8 billion HKD, a decrease of 28% year-on-year and 78% quarter-on-quarter [5] - The report highlights a potential recovery in the IPO market due to improved conditions and regulatory support for mainland companies seeking to list in Hong Kong [5]