Changjiang Securities·2024-05-06 07:32Investment Rating - The investment rating for the company is maintained as "Buy" [8] Core Views - In Q1 2024, the overall capital market experienced turbulence, but the company operated steadily in a weak market, demonstrating better profit resilience compared to peers. The brokerage business remained stable, the investment banking business maintained its advantages, and the self-operated asset expansion accelerated, contributing to stable performance support. The company, as a leading comprehensive brokerage firm, is expected to gradually benefit from an improved competitive landscape under a tightening regulatory environment [2][6][7] Summary by Sections Financial Performance - In Q1 2024, the company achieved operating revenue and net profit attributable to shareholders of 13.75 billion and 4.96 billion yuan, respectively, representing year-on-year declines of 10.4% and 8.5%. The weighted average return on equity decreased by 0.19 percentage points to 1.88%. The operating leverage, excluding client funds, increased by 4.0% to 4.44 times compared to the beginning of the year [6][7] Business Segments - The brokerage business showed signs of recovery, with a slight year-on-year increase in average daily trading volume of 1.9% to 894.2 billion yuan. The company's brokerage revenue decreased by 5.8% to 2.44 billion yuan, slightly underperforming the market. The financing business market share increased by 0.20 percentage points year-on-year to 7.60% [6][7] - The company's equity underwriting scale significantly declined due to market factors, with IPO and refinancing scales dropping by 76.7% and 75.5% year-on-year, respectively. Despite this, the company maintained its leading position in the industry with market shares of 22.7% for IPOs and 20.6% for refinancing [6][7] Asset Management - The company's asset management segment, particularly through Huaxia Fund, showed solid advantages, with net profit of 520 million yuan in Q1, down 5.8% year-on-year. The scale of non-monetary fund management reached 919.9 billion yuan, up 29.0% year-on-year, indicating a strong wealth management advantage [7] - The self-operated asset expansion accelerated, with financial asset scale increasing by 12.0% to 801.96 billion yuan. The static annualized investment return was 2.8%, down 1.08 percentage points year-on-year [7] Future Outlook - The company is expected to achieve net profits attributable to shareholders of 20.63 billion and 23.52 billion yuan in 2024 and 2025, respectively, with corresponding price-to-earnings ratios of 13.8 and 12.1 times, and price-to-book ratios of 0.98 and 0.91 times. The company is anticipated to benefit from an improved competitive landscape under a tightening regulatory environment [7]