Caixin Securities·2024-05-07 08:00Investment Rating - The report maintains a "Buy" rating for Huatai Securities [2] Core Views - The first quarter performance of Huatai Securities was impacted by declines in proprietary trading, investment banking, and brokerage services, while asset management showed growth [5][7] - The sale of AssetMark is expected to enhance future performance, with an estimated gain of approximately $795.73 million if the transaction is completed by the end of 2024 [7][8] - The company aims to leverage technology and digital transformation to drive growth in wealth management and institutional services [8] Summary by Sections Financial Performance - In Q1 2024, Huatai Securities reported operating revenue of 6.105 billion yuan, a year-on-year decline of 32.11%, and a net profit attributable to shareholders of 2.291 billion yuan, down 29.39% [5] - The breakdown of Q1 revenue sources showed significant declines in proprietary trading (-58.90%) and investment banking (-26.06%), while asset management grew by 10.16% [5][6] - The company’s return on equity (ROE) for Q1 was 1.37%, an increase of 0.49 percentage points year-on-year [5] Revenue Projections - Revenue forecasts for Huatai Securities are as follows: - 2024E: 37.959 billion yuan - 2025E: 39.657 billion yuan - 2026E: 42.267 billion yuan [9] - Net profit projections are: - 2024E: 13.277 billion yuan - 2025E: 14.977 billion yuan - 2026E: 16.166 billion yuan [9] Strategic Initiatives - The company is focusing on a strategic transformation towards quantitative trading in fixed income, currencies, and commodities (FICC) and enhancing its digital capabilities [5][8] - The sale of AssetMark is part of a broader strategy to optimize asset allocation and maximize shareholder returns [7][8]