Core views

The shareholders have a strong background, and the advantages of a full license are remarkable. Capital Securities is a small to medium brokerage firm belonging to Capital Group. The actual controller is the Beijing State-owned Assets Administration Commission. The shareholders have a strong shareholder background, and the company is based in Beijing and has spread all over the country. The management team is mature and stable, with rich industry experience, which is conducive to the long-term development of the company.

The company has a full operating license, and the company's performance has grown rapidly in recent years.

The asset management business was laid out in a forward-looking manner, and the scale of the business grew against the trend. The company laid out active management earlier and accumulated rich net worth management experience, laid a good foundation for the rapid growth of subsequent asset management business, and seized the business development window brought about by regulatory policy adjustments. In a context where the overall management scale of the industry continues to shrink, contrarian growth has been achieved by strengthening investment and research team building and improving consignment channels.

Focus on fixed income business development, and maintain stable revenue and yield. The company adheres to the principle of prudent investment and a sound investment style, strengthens investment and research team building, has strong self-operated investment and research capabilities, and an excellent level of quantitative investment. The return on fixed income investments has greatly outperformed the index all year round, achieving steady development, which is an important support for the company's performance.

Profit forecast and investment rating: We expect Capital Securities to achieve total operating income of 2239.93/265587/307.397 million yuan in 2023-2025; net profit of 82932/956.18/1,10402 million yuan respectively. The 2023-2025 EPS is expected to be 0.30/0.35/0.40 yuan respectively, corresponding to the 2023 PE of 43.04x. The first coverage gave the company an “increase in holdings” rating.