Guotai Junan Securities·2024-04-28 02:32Investment Rating - The report maintains a "Buy" rating with a target price of 35.04 CNY per share, corresponding to a PE ratio of 26.55x and a PB ratio of 1.84x [3][5]. Core Views - The company's Q1 2024 performance was under pressure due to a decline in investment and underwriting business revenues, but it is expected to benefit from the acceleration of supply-side reforms in the industry [3]. - The company reported Q1 2024 revenue and net profit attributable to shareholders of 137.55 billion CNY and 49.59 billion CNY, respectively, representing year-on-year declines of 10.38% and 8.47% [3]. - The weighted average ROE decreased by 0.19 percentage points year-on-year to 1.88%, with performance in line with expectations [3]. - The investment business net income fell by 17.96% to 55.20 billion CNY, contributing negatively to adjusted revenue growth [3]. - The underwriting business was further impacted by the market environment, with a year-on-year decline of 56.11% to 8.69 billion CNY [3]. - The report highlights the company's strengthening competitive advantages and professional capabilities in investment services, which are expected to enhance its performance amid industry reforms [3]. Financial Summary - For 2024E, the company forecasts revenue of 58.974 billion CNY, a slight decline of 1.8% from 2023A, with a projected net profit of 19.596 billion CNY [4][17]. - The company’s operating profit for 2024E is estimated at 25.949 billion CNY, reflecting a decrease of 0.6% from 2023A [4][17]. - The EPS for 2024E is projected to be 1.32 CNY, with a gradual increase to 1.57 CNY by 2026E [4][17]. - The report indicates a decline in the company's revenue growth rate, with a forecasted decrease of 1.8% for 2024E, followed by a recovery in subsequent years [4][17]. Industry Context - The report notes that the acceleration of supply-side reforms in the financial industry is a key catalyst for potential growth, as the government aims to strengthen state-owned financial enterprises [3]. - The company is positioned to benefit from these reforms, enhancing its service capabilities in wealth management and institutional business [3].