Event: The company recently released its 23Q3 quarterly report. 23Q1-3 achieved operating income of 4.955 billion yuan, an increase of 39.78% over the previous year; net profit of the mother was 1,501 billion yuan, an increase of 39.11% over the previous year. Among them, 23Q3 achieved operating income of 1,479 million yuan, an increase of 12.15% over the previous year, and net profit of 464 million yuan, an increase of 4.01% over the previous year.
Self-management drives growth, and allocation strategies are progressing steadily. The 23Q1-3 self-operated business achieved revenue of 1,410 billion yuan, an increase of 9499.50% over the previous year, which is the main factor driving the increase in performance. Among them, changes in fair value increased from -453 million yuan in the same period last year to 1,090 million yuan, which is the main source of flexibility in self-operated business. According to the company exchange meeting, equity positions are currently low, fixed income is focused on securing profits and controlling risk, and derivatives are mainly OTC options. In the future, equity positions may be increased at selected times and efforts will be made to develop income exchange businesses.
The growth rate of investment banks is impressive, and the team continues to expand. In terms of equity underwriting, according to Wind data, as of 23-11-03, the company's equity underwriting scale was 5.124 billion yuan, an increase of 152.14% over the previous year. The market share increased by 0.40pct to 0.55%, and the ranking rose from 53 to 26. Among them, the IPO underwriting scale was 2,783 billion yuan, an increase of 220.66% over the previous year, and the growth rate was impressive. In terms of bond underwriting, as of 23-11-03, the corporate bond underwriting scale was 109.302 billion yuan, an increase of 86.10% over the previous year. The market share increased by 0.33 pct to 0.96%, and the ranking rose from 27 to 20. The company continues to expand its team. According to iFind data, as of 11-03, there were 106 registered sponsor representatives of CaiTong Securities, an increase of 21 compared to the end of '22. Future investment banking business development may continue to benefit from team expansion.
Other businesses are relatively stable, and marginal improvements are obvious. The net income from brokerage, asset management, and interest of 23Q1-3 companies was 9.01 billion yuan, 11.80 million yuan, and 399 million yuan respectively, -1.25%, +11.83%, and -30.91 over the same period last year. Among them, the 23Q3 company's net income from brokerage, asset management, and interest was 323, 4.80, and 143 million yuan respectively, +6.57%, +24.23%, and -0.10% over the previous month, a significant improvement over the previous month.
Profit forecast and investment advice: The company is deeply involved in the Yangtze River Delta market, has obvious regional advantages, and is continuously verified for business development capabilities. With the advancement of the company's investment banking business and the transformation of wealth management, we expect the company's revenue for 2023-2025 to be 63.39, 71.60, and 8.043 billion yuan respectively, with year-on-year growth rates of 31.34%, 12.94% and 12.34%, respectively. Net profit was 21.25 billion yuan, 25.35 billion yuan, and 2,982 billion yuan respectively, with year-on-year growth rates of 40.03%, 19.32%, and 17.65%, respectively. EPS is 0.46, 0.55, and 0.64 yuan, respectively. Referring to comparable company valuations, we gave the company 21.58 times PE in 2023 and upgraded it to a “buy” rating.
Risk warning: business progress falls short of expectations, large fluctuations in financial markets, company-level risk events