EASTMONEY(SZ:300059) KAIYUAN SECURITIES·2024-04-25 23:30Investment Rating - The investment rating for the company is "Buy" (maintained) [2][12]. Core Views - The company's total revenue and net profit attributable to shareholders for Q1 2024 were 2.46 billion and 1.95 billion yuan, respectively, showing a year-on-year decline of 12.6% and 3.7%. However, the non-recurring net profit increased by 2.4% year-on-year to 1.94 billion yuan. The decline in fund distribution revenue was below expectations, while the securities business showed an increase in market share and significant growth in proprietary investment income [3][4]. - The company has revised its net profit forecasts for 2024-2026 to 8.6 billion, 10.1 billion, and 11.7 billion yuan, respectively, reflecting year-on-year growth of 5%, 17%, and 16%. The corresponding EPS is projected to be 0.54, 0.63, and 0.74 yuan [3][4]. - The company has canceled a previous share repurchase of 1 billion yuan, which accounted for 0.45% of the total share capital, enhancing earnings per share and demonstrating confidence in its own value [3][4]. - The company has launched a restricted stock incentive plan for 871 individuals, granting 40 million shares at 13.75 yuan, which represents 0.25% of the total share capital, with performance assessments targeting an average net profit growth of nearly 10% per year [3][4]. - The company benefits from increased trading activity among retail clients, and its current valuation has a safety margin. Attention is drawn to potential catalysts from the stock market and fund beta, as well as upcoming reforms in public fund channel fees [3][4]. Summary by Sections Revenue and Profitability - The company's revenue from fund distribution was 750 million yuan, down 30% year-on-year and 9% quarter-on-quarter, which was below expectations. The decline was attributed to a 2.8% drop in the equity fund index and net redemptions in the market [4][5]. - The net income from commissions and fees was 1.18 billion yuan, showing a slight increase of 0.3% year-on-year, while net interest income decreased by 5% to 520 million yuan [5]. Market Position - The company's market share in brokerage and margin financing continues to rise, with proprietary investment income reaching 810 million yuan, a year-on-year increase of 65% [5]. - The company's financial investment assets totaled 77.9 billion yuan, reflecting a year-on-year increase of 12% [5]. Financial Forecasts - The financial summary indicates a projected revenue of 11.02 billion yuan for 2024, with a year-on-year decline of 0.6%, followed by growth of 17.3% and 17.1% in 2025 and 2026, respectively [9]. - The projected net profit for 2024 is 8.63 billion yuan, with a year-on-year increase of 5.4% [9]. Valuation Metrics - The current stock price corresponds to a PE ratio of 22.7, 19.5, and 16.8 for 2024-2026 [3][9]. - The projected P/B ratios are 2.5, 2.2, and 2.0 for the same periods [9].