Guolian Securities·2024-05-08 15:30Investment Rating - The report maintains a "Buy" rating for the company [5]. Core Views - The company reported a total revenue of 3.61 billion yuan for Q1 2024, a year-on-year decrease of 18.6%, and a net profit attributable to shareholders of 890 million yuan, down 38% year-on-year [1]. - The decline in revenue is attributed to fluctuations in fee-based businesses and pressure on investment operations, with significant drops in brokerage and asset management revenues [1][2]. - The company is expected to benefit from a recovery in market activity and new fund issuance, leading to a potential performance rebound [3]. Summary by Sections Revenue and Profitability - Q1 2024 revenue breakdown includes: - Brokerage fees of 490 million yuan, down 30% year-on-year [1]. - Asset management income of 360 million yuan, down 39% year-on-year [1]. - Investment banking revenue of 270 million yuan, down 1% year-on-year [1]. - The company's return on equity (ROE) for Q1 2024 was 1.11%, a decrease of 0.76 percentage points compared to the same period last year [1]. Investment Business - Investment net income for Q1 2024 was 810 million yuan, a decline of 31% year-on-year, primarily due to a high base from the previous year and reduced derivative investment income [2]. - The financial investment scale at the end of Q1 2024 was 190.6 billion yuan, an increase of 9% year-on-year [2]. Financial Forecast and Valuation - Projected revenues for 2024-2026 are 17.4 billion, 18.4 billion, and 20.2 billion yuan, representing year-on-year growth rates of 2%, 5.8%, and 9.7% respectively [3]. - Expected net profits for the same period are 2.9 billion, 3 billion, and 3.3 billion yuan, with growth rates of 3.6%, 6.0%, and 10.1% respectively [3]. - The target price is set at 11.61 yuan, based on a price-to-book (PB) ratio of 1.2 times for 2024 [3].