Events: the company released 23Q3 quarterly report in recent days, 23Q1-3 achieved operating income of 12.62 billion yuan, down 3.22% from the same period last year; net profit from its mother was 690 million yuan, down 63.12% from the same period last year, mainly due to: 1) the downturn in the capital market led to negative profit and loss of fair value changes; 2) the transformation of trust business led to a reduction in service fee and commission income. Of this total, 23Q3 realized operating income of 4.31 billion yuan, down 4.96% from the same period last year, and its net profit was-30 million yuan, reversing losses over the same period last year.

Steady improvement of leasing business, optimistic about the aviation background advantage. The leasing-based business income of 23Q1-3 was 8.24 billion yuan, an increase of 5.73% over the same period last year. Of this total, 23Q3's single-quarter operating income was 2.95 billion yuan, an increase of 0.36% over the same period last year. In the future, we will continue to be optimistic about the background of the company's aviation industry, and the advantages of financial leasing business will continue to deepen.

The overall financial business is under pressure, and interest income is higher than the same period last year. From the perspective of sub-business: 1) in terms of trust, AVIC Trust actively implemented the new trust regulations and optimized its business orientation, resulting in a year-on-year drop of 34.67% to 1.95 billion yuan in 23Q1-3 handling fee and commission income; 2) in terms of securities, the average daily stock base turnover in 2023Q1-3 market was 1.01 trillion yuan, down 3.58% from the same period last year, and securities brokerage and asset management business are expected to be under pressure. 3) on the financial side, the interest income of 23Q1-3 increased by 7.51% to 2.42 billion yuan compared with the same period last year. Of this total, 23Q3 interest income rose 5.36 per cent to 790 million yuan compared with the same period last year.

Floating investment losses are a drag on performance, and the company's long-term advantages remain unchanged. 23Q1-3 investment income + fair value change income was 1.79 billion yuan, down 14.49% from the same period last year, mainly due to floating losses caused by fair value changes. As the target of scarce private equity in the military industrial chain, the advantages of industrial investment have been continuously verified, and the investment income of 23Q1-3 has increased by 9.72% to 2.01 billion yuan compared with the same period last year. Benefiting from the development of the military industrial chain, the company is expected to accelerate the performance of industrial investment and bring long-term benefits for shareholders.

Profit forecast and investment advice: considering that the market boom still needs to be improved, we appropriately reduce the company's 2023-2025 net profit to 15.03,28.40 and 3.396 billion yuan respectively, with year-on-year growth rates of-10.54%, 88.91% and 19.58%, respectively. EPS is 0.17,0.32,0.38 yuan per share respectively. Taking into account the large fluctuations in profits, using the PB valuation method, with reference to the comparable company valuation, we give the company 2.26 times PE in 2023 to maintain the "overweight" rating.

Risk hints: the strategic advance is not as expected, the trust transformation is not as expected, and the economy is in the doldrums.