Introduction to this report:

Weak market sentiment combined with large cash expenses on asset restructuring affected interest income, and the company's performance declined; the newly acquired securities business increased and public funds were laid out, so the company's future growth is worth looking forward to.

Key points of investment:

Maintain the increase rating and maintain the target price of 70.96 yuan, corresponding to 61 xP/E in 2025. The company's 2023 revenue/net profit was 11.13/73 billion yuan, -11.33%/-78.54% YoY, slightly lower than expected. We adjusted net profit for 2024-2026 to $268/473/657 million ($271/473 million before 24/25), and EPS to $0.66/1.16/1.62 (before 24/25). Maintain the “gain” rating and maintain the target price of 70.96 yuan, corresponding to 61 xP/E in 25 years.

Weak market sentiment combined with large amounts of cash from asset restructuring expenses affected interest income, and the 2023 results declined. There are two main reasons for the decline in the company's net profit: 1) The company's financial information service business is highly correlated and lagging behind. The market sentiment in 2022 was not as good as 2021, market transactions were still sluggish in 2023, and the company's financial information service business revenue fell 20% year on year. 2) The company participated in the restructuring and investment of McGow Securities. The cumulative expenditure was 2 billion yuan, its own capital was drastically reduced, interest and financial management income were drastically reduced, and financial expenses changed from negative to positive, affecting current profits.

The company's securities business is growing rapidly, and the acquisition of fund licenses improves the business layout, and is optimistic about future growth. The company's securities business developed rapidly. In 2023, it achieved revenue of 125 million, an increase of 403% over the previous year. The brokerage business and proprietary business both increased significantly, with net profit of 5.93 million, turning a loss into a profit. Furthermore, the company competed for 34% of Pioneer Fund's shares with 110 million dollars, and plans to become the largest shareholder of Pioneer Fund, and further improve its wealth management layout. It is expected to establish a new “one, two wings” pattern with financial information services as the main body and securities and public funds as the two wings, and is optimistic about the company's future growth.

Catalyst: The customer conversion rate of the company's securities business exceeded expectations.

Risk warning: The capital market fluctuates greatly, and the company's securities business falls short of expectations.