This report is read as follows:

The differential competitiveness and performance of the company as a characteristic securities firm of the AMC department is gradually taking shape, and it is optimistic that the company's follow-up performance will continue to grow steadily, and there is still room for further repair in the current valuation.

Main points of investment:

Maintain the "overweight" rating, due to strong earnings growth, raise the target price to 17.18 yuan per share, corresponding to 2.2 times PB in 2019. In 2018, the company achieved revenue / return net profit of 33.14 / 1.008 billion yuan, compared with the same period last year, revenue / return net profit was 10.27 / 555 million yuan, + 56.23%, 99.98% and 2019Q1 ROE 2.82%, respectively. The net asset of 19.947 billion yuan was 1.56% higher than that at the end of 2018, which was in line with expectations. Due to the strong growth in the first quarter, the company raised its EPS from 2019-2021 to 0.65-2021 to 0.65-0.75-0.88 yuan (0.58-2020 before 2019-2020). At present, the biggest catalyst in the brokerage plate comes from the market beta, and the company is a characteristic AMC brokerage with better profit growth than the industry, and there is still room for repair in valuation.

The differential competitiveness and performance of the company as a characteristic securities firm of the AMC department are gradually taking shape, and it is optimistic that the company's follow-up performance will continue to grow steadily. ① 18 years investment business income against the trend growth led to a narrowing of the decline in annual performance, the company's own sound and prudent asset allocation and better fixed income performance is the main addition, before the implementation of IFRS9 may also have a certain contribution to investment income ② 19Q1's fee business income growth significantly outperformed the industry, and excellent asset management and brokerage business performance is the main driver. Unlike the industry, the company's investment business income is relatively stable. We believe that the company, as a characteristic securities firm of AMC, will have more significant differential competitiveness and performance in fee business, especially in asset management and investment banking.

In the next step, the company will rely on the major shareholder China Oriental to return to the main business opportunity of non-performing assets, seize the counter-cyclical opportunity of non-performing assets disposal, differentiate competition, focus on building new investment bank competitiveness, enhance buyer's business capacity, achieve steady performance growth and high-quality growth, and create AMC characteristics.

Catalyst: the landing of relevant innovation business; the improvement of market activity; the marginal relaxation of regulatory policy.

Risk tips: innovation falls short of expectations; stock market falls sharply; industry regulation is strengthened