Incident: The company recently released its 2019 interim report, achieving operating income of 770 million yuan, an increase of 21.23% over the previous year; Guimu's net profit was 280 million yuan, up 260.31% year on year, ROE was 2.44%; EPS was 0.14 yuan/share.

Securities brokerage business: The number of clients has increased, and the securities brokerage business is developing rapidly. The company enhances the customer experience by creating a wealth management development model, accelerates the construction of intelligent investment and investment, and provides customers with high-quality investment and research services by making full use of the advantages of the research institute, thereby increasing the number of the company's customers and increasing its market share. As of the end of the reporting period, the number of accounts opened increased by 28.77% compared to the beginning of the year, and the amount of managed assets increased 35.65% from the beginning of the year. At the same time, the market share of stock base trading volume increased 11.08% over the full year of 2018. Under the dual influence of market recovery in the first half of the year, an increase in the number of customers, and an increase in market share, the development of the company's securities brokerage business made great progress. In the first half of 2019, the company's securities business revenue was 910 million yuan, an increase of 277.52% over the previous year. Operating margin was 30.16%, up 90.69% year over year. In the first half of the year, the company achieved net revenue from securities brokerage fees and commissions of 226 million yuan, an increase of 68.03% over the previous year. Among them, the net revenue of the securities brokerage business was 170 million yuan, an increase of 31.54% over the previous year.

Investment research business: Improving investment research capabilities promotes the development of brokerage business. The company invests in research business as a strategic business for the present and future. Since Guosheng Research Institute was established in early 2018, the company's fund division revenue has grown rapidly. In 2018, the division revenue growth rate was the highest in the industry, and the division revenue achieved by the research institute in the first half of 2019 reached 80% of the full year of the previous year. I believe that as the company's strategic business, the investment research business strength will be stronger in the future. The net revenue of the trading unit seat leasing business was 53.62 million yuan, an increase of 1678% over the previous year, which strongly promoted the development of the securities brokerage business.

Proprietary securities business: Grasping market conditions and growing revenue rapidly. During the reporting period, the domestic securities market picked up, and companies seized market opportunities and focused on high-grade bonds, thus achieving stable returns. The company's securities proprietary business revenue during the reporting period was 355 million yuan, accounting for 39.04% of revenue, exceeding 32.32% of the brokerage business. Meanwhile, the revenue from securities proprietary business in the same period last year was -150 million yuan. Therefore, the recovery in proprietary securities business is the main reason for the year-on-year increase in revenue and net profit.

Credit brokerage business: Business scale and revenue are growing steadily, market share is rising rapidly, and interest income needs attention. The company has a clear advantage in competition in the Jiangxi region. By the end of the reporting period, the company had 105 branches in Jiangxi Province, ranking first in the number of branches in the province. At the same time, the company is actively developing business outside the province, and the number of branches ranks high in the industry. The size and revenue of the credit intermediary business has been growing steadily. By the end of the 2019 semi-annual period, the company's total credit brokerage business reached 7.589 billion yuan, an increase of 40.24% over the beginning of the year. Among them, the size of the two finance businesses was 3.141 billion yuan, an increase of 81.51% over the previous year. This was mainly due to the increase in customers' willingness to finance. However, there was a decline in the market's financial data. As of the end of the half-year period of 2019, it was 910.790 billion yuan, a year-on-year decline of -0.93%. As a result, the company's financial business scale rose against the market. The market share of the balance of the two banks increased by 48.56% to 0.345% at the beginning of the year, a significant increase in market share; the stock pledge business was 4,448 billion yuan, an increase of 20.84% over the beginning of the year. The credit brokerage business achieved segment revenue of 126 million yuan during the reporting period, an increase of 61.23% over the same period last year.

Investment banking: The team is maturing and the business is growing rapidly. Affected by market recovery, investment banking revenue during the reporting period was 68.19 million yuan, an increase of 185.05% over the previous year. Net income from investment banking fees and commissions was $66.76 million, an increase of 179.10% over the previous year. In terms of bond underwriting, in addition to underwriting corporate bonds, the company also completed underwriting of 4 financial bond products, including financial bonds and credit asset securitization products, during the reporting period, expanding the scope of underwriting business to achieve full coverage of financial bond business products. The financial advisory business grew steadily during the same period, and a total of 10 projects were completed in the first half of the year. The total underwriting amount of corporate bonds in the reporting period ranked 55th in the industry, up 31 places from the previous year, a significant increase. The company's investment banking business is developing rapidly and has potential.

Foreign investment collaborates with the investment banking department to achieve stable returns. The Group's investment sector collaborated with the securities business investment banking department to expand project reserves. The Group's investment business achieved a total of $235 million in fair value change income and investment income during the reporting period.

Investment advice: The company's securities business is developing rapidly, foreign investment is progressing steadily, and maintaining the “increase in holdings” rating.

Risk warning: Company transformation and development fall short of expectations, risks outside the industry, etc.