The annual income in 22 is not less than 2.2 billion yuan, and the positive profit is expected to be better than the profit warning issued by peer companies in 2022. The annual income in 22 years is expected to be no less than 2.2 billion Hong Kong dollars, compared with 3.96 billion Hong Kong dollars in the same period in 21 years. The after-tax net profit is between 70 million Hong Kong dollars and 90 million Hong Kong dollars, which is expected to decline by about 91.8 percent to 93.6 percent year on year. Under the influence of adverse factors such as the tightening of the global financial market caused by the Fed's interest rate hike in the past 22 years, the wave of defaults on internal housing bonds and the repeated epidemic situation of COVID-19, the overall market conditions of Hong Kong stocks have been in the doldrums, the profits of sub-brokerages in Hong Kong have generally declined, and their investment losses have increased greatly. in this context, the company's profits have plummeted, but it is still able to maintain profits, which is better than the average level of the industry. In the first half of 22, the company's revenue fell 56 per cent year-on-year to HK $1.09 billion, while net profit fell 83 per cent to HK $161 million. In the second half of the year, there was a serious decline in business such as market making and investment and corporate financing, which was a drag on overall profits.

The deep adjustment of stock and debt aggravates the loss of proprietary income.

The double killing of stocks and bonds in 22 years led to the poor performance of Hong Kong equity and fixed income products, and the low trading mood and lack of liquidity put great pressure on the company's market-making business. In 22 years, the Chinese dollar bond market remained dark, and the scale of default reached an all-time high. in 22 years, the net trading and investment volume of H1 company changed from profit to loss to-323 million Hong Kong dollars, of which the loss on market-making trading of bonds more than tripled compared with the same period last year. Losses recorded at fair prices continued to erode profits, and it is expected that 22-year credit losses on bond products will still be a significant drag on proprietary income. The company's management said in August last year that it had significantly reduced its positions in high-risk Chinese dollar debt in real estate, reduced its own volume and transformed into a light-asset business.

The performance of the brokerage and investment banking business has also declined under the impact of market conditions. In 23 years, the growth rate of the Hang Seng Index is expected to return to 15.5% for the whole year, with an average daily turnover of HK $124.9 billion, down 25% from the same period last year. The weak market also directly affected the company's brokerage commission and margin financing income. The company's wealth management income fell 44% to HK $562 million in 22 years compared with the same period last year. The amount and amount of capital raised by Hong Kong IPO fell 68 per cent and 8.3 per cent respectively, and the company's corporate financing income fell 62 per cent to HK $146 million in 22 years compared with the same period last year. The Hang Seng Index continued to decline in the first 10 months of the year, and in the last two months of the year, it was boosted by the marginal slowdown of interest rate hikes by the Federal Reserve, the optimization of epidemic prevention policies in the mainland and the frequent introduction of stable growth policies. The Hang Seng Index rose 34.7% in January, compared with the previous month in 23 years. It is expected that the warmer market will help securities firms in the Hong Kong development industry return to growth. At present, the company is still increasing its capital and expanding its balance sheet, and investment assets still account for a relatively large proportion. In the past 22 years, the scale of financial products held by H1 valet has grown strongly, driving the growth of interest income on financial products by 16%. The company will continue to rely on the resources of its parent company to expand its cross-border derivatives business, and it is expected that the growth rate of cross-border business will remain strong for 23 years.

Maintain the "overweight" rating and fine-tune the target price to HK $0.90

With the gradual recovery of market trading volume, the primary and secondary markets of Hong Kong stocks are expected to pick up significantly, and the company is expected to achieve a rebound in performance under the background of a low base. The company has a diversified income structure, strong anti-cyclical, self-operating scale shrinking to light asset business transformation, ROE leading the industry and stable dividend, it is expected that before and after the report is expected to gradually out of the haze, some increments of brokerage business or to a certain extent affected by the tightening regulatory policies on cross-border transactions of mainland customers. According to the company's 22-year profit warning, the 22-year profit forecast is lowered, and the 23-year ADT forecast of Hong Kong stocks is revised upwards according to the 23-year earnings forecast of 23-year EPS. The company adjusts the target price of HK $0.07 from 22-24e to 0.01 EPS (0.07 pound before adjustment), and the BPS is 1.68 shock 1.74 shock 1.79. The target price is fine-tuned to HK $0.90 by DDM and relative valuation method. Corresponding to 0.54X 2022EPB.

Risk tips: (1) the return on investment is lower than expected due to the sharp fluctuations in the financial market; (2) the regulatory policy is tightened