Events:

On August 24, 2023, Caitong Securities released its financial report for the first half of the year: the company realized consolidated operating income of 3.475 billion yuan, an increase of 56.15% over the same period last year; net profit belonging to shareholders of the parent company was 1.037 billion yuan, an increase of 63.89% over the same period last year; earnings per share were 0.22 yuan per share, an increase of 46.67% over the same period last year. By the end of the reporting period, the company's total consolidated assets were 129.787 billion yuan and net assets were 33.68 billion yuan, a slight increase over the end of last year.

Main points of investment:

In the first half of the year, Caitong Securities gave full play to its regional, industrial and professional advantages, deeply cultivated the economy of Zhejiang and Zhejiang people, and comprehensively promoted the differentiated and characteristic development of investment banking business. we will actively create new business cards with the characteristics of "science and technology innovation investment bank", "state-owned investment bank" and "common wealth investment bank", and achieve high-quality development of stock and debt business. Among them, the equity business of the investment banking sector completed two IPO offerings, one refinancing issue and one IPO pass in the first half of the year. IPO accounted for more than 70 per cent of "specialized and innovative" enterprises in the review and guidance. In terms of bond business, the amount of bond underwriting exceeded 70 billion yuan in the first half of the year, double that of the same period last year, covering corporate bonds, corporate bonds, ABS and financial bonds. The underwriting scale of corporate bonds and corporate bonds ranked ninth in the country and first in Zhejiang. The total underwriting scale of ABS is 3.85 billion, which has exceeded the underwriting scale of 2022 for the whole year.

Wealth management is in a steady transition, Internet channel layout scale breakthrough: wealth business, during the reporting period, the company's wealth sector institutional customer asset scale and proportion have increased, institutional customer business income of more than 100 million yuan. In the first half of the year, the cumulative sales of total wealth products were nearly 7 billion yuan, an increase of 33.8% over the same period last year, becoming a bright spot in Caitong's product line.

The performance of subsidiaries has increased significantly: all subsidiaries have achieved good results in the first half of the year. Caitong Innovation, an alternative subsidiary of the company, has always been guided by national strategic support, focusing on investing in "hard technology" enterprises, with science and technology projects accounting for more than 95%, and cumulative investment projects accounting for about 50% in the field of digital economy. In the first half of the year, there were 233 new Zhejiang business projects, accounting for 36%. We actively expanded the financing channels, increased the investment pry volume by 1.99 billion yuan, and the cumulative investment pry scale was about 24.8 billion yuan. By the end of June, Caitong Capital, a private equity subsidiary of the company, had 20 government industrial funds under management, with a management scale of 48.4 billion yuan, an increase of 47% over the same period last year, and 35 equity investment funds under management, with a management scale of 15.7 billion yuan, an increase of 115% over the same period last year. According to the statistics of China Fund Industry Association, the paid-up scale of Caitong Capital successfully ranked among the top 20 in the industry in the second quarter of 2023. As a shareholding company of the company, the operation and development of Yongan futures has made steady progress, with an operating income of 11.966 billion yuan and a net profit of 412 million yuan in the first half of the year, an increase of 30.40% over the same period last year. The trading volume of futures brokers was 104 million hands, up 10.3% from the same period last year, and the transaction volume was 7.67 trillion yuan. The average daily rights and interests of customers was 48.7 billion yuan, an increase of 8% over the same period last year.

Solid income development is steady, continue to open up the "one main body and two wings" development pattern: the management scale of Caitong securities assets management is nearly 300 billion yuan, an increase of 20% over the beginning of the year, and the income in the first half of the year ranks fourth in the industry. In the case of light market issuance in the first half of the year, the issuance of Caitong Securities Management ABS bucked the trend, with a total issuance size of 13.824 billion yuan, ranking 10th and 14th in the industry, respectively, with an increase of 59% over the same period last year and 33.3% over the same period in 2021. As of the end of June, the size of Caitong securities management was 294.9 billion, up 20 per cent from the beginning of the year.

The company's overall revenue-side and profit-side growth in the first half of the year are relatively excellent, maintaining the company's "overweight" rating.

Key issues of concern

Stock price catalyst (positive): macroeconomic recovery exceeds expectations, equity market performance exceeds expectations, and so on.

Risk hints (negative): market fluctuation risk, market activity risk, fund sales market competition aggravating risk and so on.