Zhongtai Securities(SH:600918) CAITONG SECURITIES·2024-05-30 00:22Investment Rating - The report assigns an "Accumulate" rating for the company, marking its first coverage [1]. Core Views - The company is the only provincial state-owned securities firm in Shandong, with strong shareholder support and collaboration capabilities. It has integrated local financial resources and has seen significant improvements in market share for equity, IPO, and bond underwriting in 2023 [2]. - The company has enhanced its asset management landscape by increasing its stake in Wanji Fund, which has shown strong growth in public fund business, with non-monetary fund scale reaching 157.7 billion yuan by the end of 2023 [2]. - The company's balance sheet has optimization potential, which is expected to improve future profitability. The company has reduced its equity self-operated scale from 19.2% in 2018 to 5.0% in 2023, allowing for greater flexibility in fixed-income asset expansion [2]. Summary by Sections Company Overview - The company is the only provincial state-owned securities firm in Shandong, established in May 2001, with a history of multiple capital increases and shareholder changes [10]. - It has a comprehensive business layout, including securities, futures, funds, and investments, with a presence in 28 provinces and over 280 securities offices [13]. Financial Performance - The company's revenue and net profit have shown high volatility compared to industry averages, with significant losses in 2022 due to market fluctuations. However, there has been a notable recovery in 2023 [18][21]. - The company’s net income for 2023 was 1.8 billion yuan, with a projected revenue of 13.03 billion yuan for 2024, reflecting a year-on-year growth of 2.13% [3]. Industry Position - The company maintains a stable position in the upper-middle tier of the industry, with its revenue ranking consistently between 14th and 17th from 2018 to 2023. Its asset management revenue has improved significantly due to the consolidation of Wanji Fund [28][29]. Highlights - The company benefits from direct management by the Shandong Provincial Party Committee, enhancing its strategic cooperation and market development capabilities [30]. - Shandong's strong economic foundation supports the company's wealth management and investment banking businesses, with a GDP of 9.21 trillion yuan in 2023 [34].