Haitong Securities·2024-05-06 03:32Investment Rating - The report maintains an "Outperform" rating for the company [5][6][16] Core Views - The company reported a net profit of 2.97 billion HKD for Q1 2024, a year-on-year decrease of 13%, primarily due to market weakness [5][6] - Total revenue and other income for Q1 2024 were 5.201 billion HKD, down 6% year-on-year [5][6] - The report estimates total revenue for the company to be 22.874 billion HKD in 2024, with a year-on-year growth of 11% [12][16] Financial Performance Summary - The company's Q1 2024 revenue from the cash market segment was 1.881 billion HKD, a decrease of 11.6% year-on-year, accounting for 36% of total revenue [2] - The average daily trading volume in the cash market decreased by 22% to 99.4 billion HKD [2] - The average daily trading volume for the Northbound and Southbound of the Stock Connect was 133 billion HKD and 31 billion HKD, representing increases of 37.1% and decreases of 17.3% respectively [2] - The bond market's Northbound daily trading volume increased by 22%, reaching a record high for the quarter [2] Revenue and Profit Forecast - The estimated revenues for the company for the years 2024, 2025, and 2026 are projected to be 22.874 billion HKD, 24.639 billion HKD, and 26.160 billion HKD respectively, with year-on-year growth rates of 11%, 8%, and 6% [12][16] - The net profit attributable to shareholders is expected to be 13.231 billion HKD, 14.190 billion HKD, and 14.894 billion HKD for the years 2024, 2025, and 2026, reflecting year-on-year growth of 12%, 7%, and 5% [12][16] Valuation - The reasonable value range for the company's stock is estimated to be between 320.00 and 333.40 HKD, corresponding to a 2024E PE ratio of 30.7 to 31.9 times [6][16] - The report uses a two-stage Dividend Discount Model (DDM) for valuation, assuming a dividend payout ratio of 90% and a long-term growth rate of 4% [16]