Main points of investment
The founder certificate issued three quarterly reports in 2023, with revenue and net profit of 1.936 billion yuan respectively during the reporting period,-4.0% and-0.2% respectively compared with the same period last year; revenue and net profit of 16.14 yuan and 496 million yuan respectively in the third quarter alone, compared with-29.2% and-43.8% respectively. Weighted average ROE-0.2pct to 4.4%; excluding customer funds, operating leverage is 3.91 times, up 13.8% from the beginning of the year.
There is some pressure on the charging business, and the income of the capital business has improved significantly. On the revenue side, in the first three quarters of 2023, the company realized business income of 30.65 yuan for fees and 2.47 billion yuan for funds, respectively, which was-13.4% and + 7.2% compared with the same period last year. The market trading activity declined in the first three quarters, resulting in a decline in the company's fee-based business income. Proprietary investment income increased under the stabilization of the capital market. On the expenditure side, the company's management expenses ranged from-2.0 to 3.579 billion yuan compared with the same period last year, and the management expense rate increased to 63.2 percent from the same period last year, with a credit impairment loss of 3.0352 million yuan, and the asset quality is relatively sound.
The brokerage business income follows the market and plays the role of ballast stone. In terms of fee-based business, the net income of brokers, investment banks and asset management was 24.90,1.88 and 135 million yuan respectively, which was-9.0%,-44.2% and-31.3% respectively compared with the same period last year. In the first three quarters, the turnover of A-shares in the whole market fell 6.5% compared with the same period last year, and the amount of securities bought and sold by company agents only decreased by 1.6% compared with the same period last year. The decline in net income from brokerage business is due to the decline in commission rates and the decline in consignment income under the weakness of newly issued funds. The number of clients of the company's brokerage business ranks first in the industry. The scale of equity and bond financing in the first three quarters was + 24.8% and-49.6% to 41.24 and 14.452 billion yuan respectively compared with the same period last year. The decline in net income from investment banking was mainly due to the decline in the scale of bond financing. As of October 26, 2023, two IPO projects were queuing up. The company's founder Fubon fund public offering management scale is + 7.6% to 25.418 billion yuan compared with the beginning of the year, mainly due to the bond fund scale from + 39.1% to 17.672 billion yuan at the beginning of the year.
The company is actively expanding its balance sheet and the income from its own investment is high. In the capital business, the net interest income and investment business income were 11.26 yuan and 1.344 billion yuan respectively,-14.9% and + 37.0% respectively compared with the same period last year. The decline in net interest income compared with the same period last year was due to the increase in financial investment and leverage, resulting in interest expenditure of + 20.4% year-on-year, while interest income increased by only 5.3% over the same period. After the company's equity adjustment landed, it actively expanded its balance sheet and increased the scale of financial asset allocation. by the end of September 2023, the company's financial assets were + 24.8% to 100.6 billion yuan higher than at the beginning of the year. The company's investment business income has increased significantly, which has become the main performance increase of the company so far this year.
After the equity adjustment, the development of the company is gradually on the right track, and the brokerage business has a solid moat advantage. under the background of the continuous improvement of capital market activity, the brokerage business income is expected to improve and the performance is expected to accelerate upward. We estimate that the company's net profit from 2023 to 2024 will be 23.29 and 2.644 billion yuan, respectively, compared with the same period last year. The closing price on October 26, 2023 corresponds to 1.36 and 1.29 times of PB, respectively.
Risk hints: capital market volatility risk, macroeconomic downside risk, market share increase less than expected risk, new business promotion less than expected risk.