Incident: The company released its 2022 annual report and 2023 quarterly report. In 202A, it achieved operating income of 2.6 billion yuan (YoY -20%), net profit of 400 million yuan (YoY -46%), weighted average ROE of 2.76% (YoY-2.50pct), EPS 0.10 yuan (YoY -44%); 2023Q1 achieved operating income of 690 million yuan (YoY +30%), net profit of 140 million yuan (YoY +96%), weighted average ROE of 0.96% (YoY+) 0.46pct), EPS 0.034 yuan (YoY +100%). Among them, the 2022 results were mainly dragged down by self-employment, and the asset management business still bucked the trend and achieved +12% year-on-year increase in net revenue; self-employment picked up significantly in 23Q1, driving year-on-year improvement in performance.

By business line, the company achieved net revenue of 390 million yuan/280 million yuan/1.03 billion yuan/210 million yuan/190 million yuan/190 million yuan/190 million yuan in 2022, respectively, 19%/-9%/+12%/+5%/-80%, accounting for 18%/13%/49%/10%/9%. The company's 2023Q1 brokering/investment banking/asset management/credit/proprietary business achieved net revenue of 90 million yuan/50 million yuan/230 million yuan/0.3 million yuan/210 million yuan, respectively, -8%/-7%/-38%/+904%, accounting for 15%/8%/38%/5%/35%.

The asset management business was +12% year over year, with a significant “fixed income +” advantage. The company's “fixed income +” characteristics stand out. Net revenue from the asset management business bucked the trend by 12% in 2022 and slightly -7% year-on-year in 23Q1. It is optimistic that the company will continue to diversify customer-centered investment types and product lines, and strengthen the competitiveness and performance of the asset management business. 1) In terms of brokerage asset management, the company continues to improve its active management capabilities and product creation capabilities. As of the end of 2022, the total amount of fiduciary management capital for the asset management business was 55 billion yuan, -5.91% compared to the beginning of the year. 2) In terms of public funds, Chuangjin Hexin, the holding subsidiary of the company, had a total fiduciary management capital of 839.5 billion yuan at the end of 2022, +4% compared to the beginning of the year.

The fixed income business has been steadily shifting to a transaction-driven model, and trading activity has increased. 1) In terms of fixed income sales, the company continues to consolidate the sales advantage of local government bonds. In 2022, the number of underwriters for provincial and municipal local government bonds was added across the country by 4 to 33, leading the industry in the number of groups. 2) In terms of fixed income investment transactions, the company's bond trading volume in the interbank and exchange markets in 2022 was 951.1 billion yuan, +77% year over year; the interbank market trading volume was 2,428.6 billion yuan, +95% year over year.

The investment banking business consolidated regional+industry focus, and fixed increase underwriting ranked relatively high. A venture capital bank insisted on “focusing on the region and focusing on the industry”. The regional side initially formed a “two wing in one” layout in Beijing, Shanghai, and Shenzhen, and the industrial side is deeply involved in the medical, health, military, and new materials industries. According to Wind statistics, a venture capital bank ranked 25th/14th in the 2022 stock principal underwriting amount/fixed increase underwriting scale industry.

Investment advice: Maintain a buy-A investment rating. The company has distinct characteristics in the fixed income and asset management business sector. We expect the company to achieve EPS of 0.13 yuan, 0.14 yuan, and 0.16 yuan respectively from 2023 to 2025, with a target price of 6.7 yuan for 6 months, corresponding to 1.78x the 2023 P/B.

Risk warning: Risk of macroeconomic downgrade/sharp market fluctuation/intensification of industry competition/policy changes.