Investment Rating - The investment rating for the company is "Buy" and is maintained [7]. Core Views - The company has faced pressure across various business lines, with a significant decline in revenue and net profit for Q1 2024. Revenue decreased by 37.6% year-on-year to 3.87 billion HKD, and net profit fell by 45.1% to 1.24 billion HKD. The weighted average return on equity (ROE) dropped by 1.29 percentage points to 1.21% [5][6]. - Despite the challenges, the long-term outlook remains positive due to the company's strong fee-based business and balance sheet management capabilities, which are expected to enhance competitive advantages in brokerage, investment banking, asset management, and trading [6]. Summary by Sections Financial Performance - For Q1 2024, the company reported revenues of 3.87 billion HKD, a decrease of 37.6% year-on-year, and a net profit of 1.24 billion HKD, down 45.1%. The weighted ROE was 1.21%, reflecting a decline of 1.29 percentage points. The leverage ratio, excluding client funds, was 4.96x, down 11.7% year-on-year [5][6]. - The breakdown of net income by business lines showed declines in brokerage, investment banking, asset management, and proprietary trading, with respective revenues of 0.83 billion, 0.45 billion, 0.27 billion, and 1.85 billion HKD, reflecting year-on-year changes of -32.8%, -25.0%, -17.9%, and -49.0% [5][6]. Business Development - The company is leveraging financial technology to enhance business development and customer acquisition, with online assets under management (AUM) nearing 10 billion HKD. The app has transitioned from a functional to an operational model, supporting business growth [5]. - The average daily trading volume in the two markets for Q1 2024 was 895.37 billion HKD, an increase of 1.89% year-on-year. Although brokerage revenue decreased by 32.8%, the agency trading volume increased by 4.9% to 86.34 billion HKD, indicating a potential recovery in brokerage business [5]. International Expansion - The company is intensifying its internationalization efforts, having received approval to become one of the first "HKD-RMB" dual-counter market makers. It has also been approved as a market maker for the Beijing Stock Exchange and the Shanghai Stock Exchange's Sci-Tech Innovation Board, enhancing its international competitiveness [5][6]. - The company is expanding its cross-border derivatives business, focusing on interest rate, credit, and foreign exchange products, and is ranked among the top in the market for key commodities [5]. Underwriting and Market Position - The scale of equity underwriting has decreased by 76.1% year-on-year to 9.48 billion HKD, with a market share of 11.3%, maintaining the second position in the industry. The scale of bond underwriting in Q1 2024 decreased by 8.7% year-on-year to 221.40 billion HKD, with a market share of 8.1%, ranking fourth in the industry [5][6]. Asset Quality - The income from funding-related businesses fell by 62.9% year-on-year to 1.25 billion HKD in Q1 2024. The financial asset scale decreased by 8.0% year-on-year to 320.22 billion HKD, leading to a decline in static investment returns [6]. - The company reported a net interest income of -0.59 billion HKD, down from the previous year, primarily due to a decrease in income and an increase in costs [6]. Future Projections - The company is expected to achieve net profits of 6.29 billion HKD and 6.93 billion HKD for 2024 and 2025, respectively, with corresponding H-share price-to-earnings (PE) ratios of 7.49 and 6.81, and price-to-book (PB) ratios of 0.43 and 0.40 [6].
中金公司2024年一季报点评：资金类业务有所承压，投行龙头地位稳固