Industrial Securities(SH:601377) Guotai Junan Securities·2024-04-29 05:02Investment Rating - The report maintains a "Buy" rating for the company with a target price of 7.99 CNY per share, which corresponds to a 33.86x PE ratio and a 1.26x PB ratio [1]. Core Views - The company's investment performance has declined year-on-year, leading to overall performance pressure. However, its wealth management and institutional business capabilities are continuously improving, which is expected to enhance functionality and further strengthen its operations [1]. - The report highlights that the company’s wealth management is actively promoting the professionalization of advisory services and the refinement of its client service system, aiming for a transformation centered on asset allocation capabilities [1]. - The report notes that the company’s investment income has been under pressure due to a decline in market trading activity and weak performance in financial product distribution [1]. Summary by Sections Financial Performance - The company reported a revenue of 10,627 million CNY in 2023, a slight decrease of 0.3% year-on-year. The net profit attributable to shareholders was 1,964 million CNY, down 25.5% year-on-year [1]. - The report indicates a significant drop in the company's investment income, which fell by 43.85% year-on-year to 3.36 billion CNY, primarily due to a high base from the previous year [1]. - The report projects an EPS of 0.24 CNY for 2024, with a downward adjustment from previous forecasts [1]. Market Position and Strategy - The company is focusing on enhancing its wealth management and institutional business capabilities to better serve client needs throughout their lifecycle, aiming to provide comprehensive financial services [1]. - The report identifies a catalyst for growth as the introduction of state-owned financial capital management initiatives [1]. Valuation Metrics - The report provides a comparison of the company's valuation metrics with peers, indicating a P/E ratio of 25.15 for 2023 and a projected P/E of 24.24 for 2024 [15]. - The company’s book value per share (BVPS) is projected to be 6.18 CNY for 2023, with a P/B ratio of 0.93 [15].