Core views:
The company disclosed its 2023 annual report, with total revenue of 11.081 billion yuan in 2023, -11.25% year-on-year; net profit to mother was 8.193 billion yuan, -3.71% year-on-year. Q4 Total revenue in a single quarter was -11.33% YoY, and net profit was 1.985 billion yuan, +3.62% YoY. In 2023, brokerage and consignment business revenue declined 10% and 16% year over year, respectively, due to market and rate adjustments, while proprietary business increased 77% year over year.
Consignment revenue highlights resilience, and fund holdings rank third. The company achieved fund sales of 1547.9 billion yuan in 2023, -23% year-on-year, of which non-cargo-based sales were 908.5 billion yuan, -24% YoY, and the share of non-goods was basically stable. Due to the high proportion of end commissions in the company's fund sales structure, the year-on-year decline in escrow fund revenue was even smaller. In 2023, e-commerce service revenue was 3.625 billion yuan, -16% over the same period last year. The quality advantage of customers continued, and the market share of mixed equity funds increased steadily, reaching 8.9% in 23Q4.
The market share of brokerage business continues to rise, and revenue fluctuates due to declining commission rates. The company's stock base transaction volume in 2023 was 19.27 trillion yuan (bilateral), +0.16% year over year, with an estimated market share of 4.54%, up 0.24pct from 2023. Mainly due to the decline in commission rates, the company's net revenue from agent trading was 3,765 million yuan, -10% year-on-year, and seat rental revenue was 335 million yuan, -20.5% year-on-year. The total estimated commission rate declined from 2.39 per 10,000 in 2022 to 2.13 per 10,000 in 2023. The share of the two financing markets continued to rise, with a market share of 2.93 percent of financing capital, an increase of 0.39 pct over 2012.
Proprietary business has grown dramatically, and additional benefits have increased flexibility. In 2023, the company's own revenue was 1,588 billion yuan, +76.97% year-on-year. Among the company's transactional financial assets in 2023 were 44.9 billion yuan in bonds and 8.966 billion yuan in stocks, a significant increase from 230 million yuan in 2022, and funds of 7.8 billion yuan, a decrease of 26% over the previous year.
Profit prediction and investment advice: The implementation of a new round of equity incentives, higher performance targets, shows confidence in development, and has a strong motivating effect. The company continues to invest in R&D, which is expected to deepen traffic barriers and enhance monetization potential. The company's card is a traffic gateway for the development of the wealth management industry, and has high growth potential and performance flexibility. As the market recovers, the company's profit is expected to improve. The company's net profit from 2024-2025 is estimated to be 8.698 billion yuan and 9.495 billion yuan. Referring to the company's historical valuation center, considering the company's increasing profit model, the company will be given a 2024 valuation of 30xPE, corresponding to a reasonable value of 16.46 yuan/share, and maintain an “increase in holdings” rating.
Risk warning: capital market fluctuations; economic downturn; policy progress falling short of expectations, etc.