GF SECURITIES·2024-04-25 12:32Investment Rating - The report maintains a "Buy" rating for the company, with a target price of 312 HKD per share, indicating an expected performance that exceeds the market by 5%-15% over the next 12 months [3][10]. Core Insights - The company reported a total revenue of 5.2 billion HKD for Q1 2024, reflecting a year-on-year decline of 6%. The decrease is primarily attributed to a drop in trading volume in the Hong Kong stock market, with the average daily turnover (ADT) falling by 22% to 99.36 billion HKD compared to Q1 2023 [1][2]. - The decline in revenue was somewhat mitigated by growth in derivatives and commodity trading, with net profit attributable to shareholders for Q1 2024 at 2.97 billion HKD, down 13% year-on-year. The EBITDA margin decreased to 72%, a decline of 4 percentage points [1][2]. - The report highlights that the stock trading revenue was impacted by the macroeconomic environment, with a 12% year-on-year decrease in the cash segment revenue, while settlement fees benefited from a 37% increase in northbound trading [1][2]. - The derivatives and commodities market showed resilience, with trading volumes for derivatives and LME metal contracts increasing by 14% and 31% year-on-year, respectively [1][2]. - Investment income contributed significantly to the company's performance, with a net return rate on margin and settlement funds rising to 1.8% from 1.6% in the previous year, although total investment income decreased by 13% to 1.34 billion HKD [1][2]. Financial Summary - For the fiscal year 2024, the company is projected to achieve a net profit of 13.2 billion HKD, with an earnings per share (EPS) of 10.41 HKD. The price-to-earnings (PE) ratio is expected to be 30 times [2][3]. - The revenue forecast for the upcoming years shows a steady growth trajectory, with expected revenues of 22.77 billion HKD in 2024, 25.91 billion HKD in 2025, and 29.66 billion HKD in 2026, reflecting growth rates of 11% and above [2][3].