Guolian Securities·2024-04-28 12:30Investment Rating - The investment rating for the company is "Buy" (maintained) with a target price of 27.57 CNY, compared to the current price of 19.16 CNY [1]. Core Views - The report highlights that the company has maintained its leading position in the investment banking sector, with a significant improvement in quarterly profits despite a year-on-year decline in net profit [4][6]. - The company is expected to continue its industry-leading performance with steady revenue growth projected for the years 2024 to 2026 [6]. Financial Performance Summary - In Q1 2024, the company achieved a total operating revenue of 13.76 billion CNY, a year-on-year increase of 10.4% but a quarter-on-quarter decrease of 4% [4]. - The net profit attributable to shareholders for Q1 2024 was 4.96 billion CNY, reflecting a year-on-year decline of 8.5% but a quarter-on-quarter increase of 50% [4]. - The return on equity (ROE) for Q1 2024 was 1.88%, a decrease of 0.19 percentage points compared to the same period last year [4]. Business Segment Performance - Brokerage business revenue for Q1 2024 was 2.44 billion CNY, down 6% year-on-year but up 2% quarter-on-quarter, accounting for 19.4% of the main securities revenue [4]. - Asset management revenue for Q1 2024 was 2.36 billion CNY, a decrease of 6% year-on-year and 4% quarter-on-quarter, with the company's controlled public fund, Huaxia Fund, contributing 5.18 billion CNY in net profit [4]. - Investment banking revenue for Q1 2024 was 870 million CNY, down 56% year-on-year and 16% quarter-on-quarter, with the company maintaining the highest market share in IPOs and refinancing [4]. Investment and Credit Business - The company reported investment net income (including exchange gains) of 6.33 billion CNY in Q1 2024, a year-on-year decrease of 6% but a quarter-on-quarter increase of 38% [5]. - Credit business faced some pressure, with net interest income of 330 million CNY in Q1 2024, down 44% year-on-year and 57% quarter-on-quarter due to increased interest expenses [5]. Revenue and Profit Forecast - The company is projected to achieve revenues of 60.2 billion CNY, 63.5 billion CNY, and 81 billion CNY for the years 2024, 2025, and 2026, respectively, with year-on-year growth rates of 0.2%, 5.5%, and 6% [6]. - The net profit attributable to shareholders is expected to be 20 billion CNY, 21.3 billion CNY, and 27.9 billion CNY for the same years, with growth rates of 1.5%, 6.4%, and 6.5% [6].