Core viewpoints

The operating income of 23Q1-3 was 22.6 billion yuan, + 19% compared with the same period last year, and the net profit was 4.4 billion yuan,-28% compared with the same period last year.

EPS0.33 yuan / share, year-on-year-30%, weighted average ROE2.62% (under-year), year-on-year-1.08pct.

23Q3's single-quarter operating income was 5.6 billion yuan,-18% year-on-year,-34% month-on-month, and its net profit was 500 million yuan,-60% year-on-year and-62% month-on-month. From a business-by-business point of view, investment performance became positive, while credit, brokerage, investment banking and asset management business declined. The increase in revenue and the decrease in net profit are mainly due to the provision of 1.46 billion yuan for large credit impairment losses (only 450 million yuan for 22Q1-3). Taking into account the company's performance in the first three quarters and the current market climate, we predict that the EPS of 2023-25 will be 0.38 0.49max 0.58 yuan, and that of 2023 BPS will be 12.86 yuan.

Taking into account the pressure of the company's credit impairment, we maintain Haitong A shares 1.0 times the 2023 forecast PB valuation (comparable company average: 1.16 times), and give H shares 0.35 times the 2023 forecast PB valuation (comparable company average: 0.57 times), corresponding to A shares price of RMB12.86, H shares price of HK $4.81. Maintain A-share "buy" rating and H-share "hold" rating.

Investment performance improved compared with the same period last year, and impairment loss increased

The investment income of 23Q1-3 is 3.69 billion yuan, which is mainly driven by the performance. 23Q3 single-quarter 410 million yuan, year-on-year become a regular worker, month-on-month-68%. The net interest income of 23Q1-3 is 3.27 billion yuan,-31% compared with the same period last year.

Of this total, interest expenditure was 11.9 billion yuan, an increase of 2.1 billion yuan over the same period last year, or 22% over the same period last year. 23Q3 single quarter 1.09 billion yuan, year-on-year-34%, month-on-month-1.8%. 23Q1-3 provides for a credit impairment loss of 1.46 billion yuan, an increase of 1.01 billion yuan over the same period last year, or 223%, mainly due to impairment losses on financial assets bought and sold back, which is a drag on performance. Affected by the increase in the scale of funds integrated into the re-financing business, the loan funds were + 118% to 13.7 billion yuan at the end of 22 years.

The brokerage business declined with the market, and the investment banking business was under pressure compared with the same period last year.

The net income of brokers fell sharply under the influence of market trading activity. The income of 23Q1-3 brokerage business was 2.87 billion yuan, compared with-21%,-21%, and-22%, respectively, compared with the same period last year.

The investment banking business declined under the influence of the slowing pace of IPO in the market. The net income of 23Q1-3 investment bank was 3.01 billion yuan, compared with the same period last year. The net income of 23Q1-3 investment bank was 1.06 billion yuan per quarter compared with the same period last year, and-20% compared with the same period last year.

The net income of asset management has declined, and the month-on-month ratio has picked up somewhat.

The net income of 23Q1-3 is 1.43 billion yuan,-15% compared with the same period last year. 23Q3 single-quarter 490 million yuan,-18% year-on-year, month-on-month + 7%, somewhat warmer. The net profit contribution of the company's public offering funds Haifu Tong and Wells Fargo Fund is steady. Haitong Capital Management actively plans the transformation of asset management business and layout of the public offering market, and continues to improve its active management capacity, and the asset management business is expected to continue to improve.

Risk tips: business development is not as expected, market volatility risk.