Event: the company disclosed its 2023 semi-annual report that in the first half of the year, the operating income was 1.256 billion yuan (year-on-year + 29%), the return net profit was 599 million yuan (year-on-year + 28%), the EPS was 0.1172 yuan (year-on-year-0.26%), and the weighted average ROE was 3.63% (year-on-0.11pct).

Explore business transformation and upgrading around the new classification of trusts. The company's 2023H1 realized a net income of 605 million yuan in fees and commissions,-8% of the same period last year, 252 new trust projects, 134.826 billion yuan in project size, and 25.057 billion yuan in safe payment at maturity. By the end of 2023H1, the company's trust assets were 361.024 billion yuan, 26% higher than at the beginning of the year. Under the background that the new rules of "three classifications" of trust have been landed, the company continues to promote the transformation of business innovation, including accelerating the landing of asset service trust business, mining new models of asset management trust, equity investment and so on.

The return on investment has improved significantly, and the quality and efficiency of inherent business investment has been continuously optimized. The company's 2023H1 realized investment income + fair value change income of 336 million yuan, which was + 220% compared with the same period last year, mainly due to the increase of merger structured main body income and securities investment income. The company continues to strengthen the asset allocation investment ability and professional investment level of its inherent business, improve the efficiency of the use of its own funds, and gradually increase the project yield to about 10%; at the same time, it focuses on exploring scientific and technological innovation investment business, screening high-end manufacturing quality projects, and working with key universities to explore the transformation of scientific and technological achievements.

Investment advice: maintain a buy-An investment rating. We believe that the company relies on the Shaanxi Provincial SASAC, grasps the outstanding ability of high-quality projects in the province, actively explores business transformation and development, and has a certain growth and competitive advantage. We estimate that the EPS of the company from 2023 to 2025 is 0.20,0.23,0.26 yuan respectively, and the 6-month target price is 3.46 yuan, corresponding to 1.0x 2023 EPS B.

Risk hint: macro economic downturn / regulatory policy change / trust project default