Core Viewpoint - The report from Xingzheng International highlights the strong performance of Dongfang Securities (03958) in its proprietary business and its proactive asset structure optimization, indicating a positive outlook on the company's transformation in fee-based services and growth potential. The projected net profit attributable to shareholders for 2025 and 2026 is expected to be 4.352 billion and 4.608 billion yuan, representing year-on-year growth of 29.9% and 5.9% respectively, with an initial coverage rating of "Buy" [1]. Financial Performance - In the first half of 2025, Dongfang Securities achieved operating revenue and net profit attributable to shareholders of 8.001 billion and 3.463 billion yuan, reflecting year-on-year increases of 38.9% and 64.0%. In Q2 alone, the operating revenue and net profit were 2.619 billion and 2.027 billion yuan, with quarter-on-quarter changes of -51.3% and +41.2%, primarily due to changes in accounting policies [2]. - The company reported a weighted average ROE of 4.3%, up by 1.61 percentage points year-on-year, with a business leverage ratio of 3.74 times, an increase of 0.1% from the beginning of the year after excluding customer funds [2]. Revenue Breakdown - In the first half of 2025, the company generated revenue from fee-based and capital-based businesses of 2.886 billion and 5.058 billion yuan, marking year-on-year increases of 16.3% and 57.6%. The growth in fee-based income was driven by brokerage and investment banking, while capital-based business continued to be a core profit driver [3]. - The management expenses increased by 16.5% year-on-year to 3.775 billion yuan, with the management expense ratio decreasing by 9.23 percentage points to 47.2% [3]. Business Segments - In the first half of 2025, the net income from brokerage, investment banking, and asset management was 1.371 billion, 720 million, and 601 million yuan, showing year-on-year growth of 31.1%, 31.6%, and a decline of 15.1% respectively. The brokerage business benefited from customer expansion and distribution efforts, adding 228,000 new clients and attracting 24.5 billion yuan in assets, with year-on-year increases of 90% and 45%. The public fund distribution saw a year-on-year increase of 61.3% [4]. - The investment banking sector experienced growth in both equity and debt financing, ranking sixth in the number of equity financing projects and ninth in total bond underwriting volume, which increased by 28.0% year-on-year [4]. - The asset management division is progressing towards public fund transformation, with total AUM increasing by 7.9% since the beginning of the year. The partnership with Huatai Fund has also contributed to a year-on-year increase of 8.7% in the fund management scale to 1.26 trillion yuan [4]. Investment Business - In the first half of 2025, the company reported net interest income and investment business income of 462 million and 4.595 billion yuan, reflecting year-on-year changes of -33.4% and +82.7%. The decline in net interest income was mainly due to rising costs of interbank borrowing and an increase in the scale of bond repos, which led to a year-on-year increase of 16.4% in interest expenses [5]. - The investment business continued to show high growth, with investment income increasing by 67.6% year-on-year to 3.965 billion yuan, driven by dividend returns from equity investments and gains from the disposal of trading financial assets, which rose by 123.4% and 95.1% respectively [5]. - The company is enhancing its financial asset structure by deepening the development of equity derivatives, maintaining a high dividend allocation strategy, and increasing the scale of stocks and equity assets by 1.406 billion yuan to 12.254 billion yuan since the beginning of the year [5].

Core Viewpoint - The report from Xingzheng International highlights the strong performance of Dongfang Securities (600958)(03958) in its proprietary business and its proactive asset structure optimization, indicating a positive outlook for the company's transformation in fee-based services and growth potential. The projected net profit for the company in 2025 and 2026 is expected to be 4.352 billion and 4.608 billion yuan, respectively, representing year-on-year growth of 29.9% and 5.9%, with an initial "Buy" rating assigned [1]. Financial Performance - In the first half of 2025, Dongfang Securities reported operating revenue and net profit attributable to shareholders of 8.001 billion and 3.463 billion yuan, respectively, reflecting year-on-year increases of 38.9% and 64.0%. In Q2 alone, the operating revenue and net profit were 2.619 billion and 2.027 billion yuan, showing a quarter-on-quarter decline of 51.3% and an increase of 41.2%, primarily due to changes in accounting policies [2]. Revenue Breakdown - For the first half of 2025, the company achieved revenue from fee-based and capital-based businesses of 2.886 billion and 5.058 billion yuan, marking year-on-year growth of 16.3% and 57.6%. The growth in fee-based income was driven by brokerage and investment banking, while capital-based business continued to be a core profit driver for the company [3]. Business Segments - In the first half of 2025, net income from brokerage, investment banking, and asset management was 1.371 billion, 720 million, and 601 million yuan, respectively, with year-on-year growth of 31.1%, 31.6%, and a decline of 15.1%. The brokerage business benefited from client expansion and distribution efforts, adding 228,000 new clients and attracting 24.5 billion yuan in assets, with year-on-year increases of 90% and 45%. The public fund distribution saw a significant rise of 61.3% [4]. Investment Business - In the first half of 2025, the company reported net interest income and investment income of 462 million and 4.595 billion yuan, respectively, with year-on-year changes of -33.4% and +82.7%. The decline in net interest income was mainly due to rising costs of interbank borrowing and an increase in bond repurchase scale, while investment income continued to show high growth, with investment returns increasing by 67.6% to 3.965 billion yuan, driven by dividend returns from equity investments and gains from trading financial assets [5].