Increased dividend ratio and steady recovery of investment
In 2023, revenue was 19.8 billion yuan, +3% year-on-year; net profit to mother was 8.8 billion yuan, +9% year-on-year.
Overall, net income from investment and interest increased year on year, while the rest declined. It is proposed to distribute a cash dividend of 2.52 yuan for every 10 shares, with a dividend ratio of 25.01%, an increase of 5.08pct over the previous year. Considering that the market is still fluctuating and the investment banking boom needs to be improved, it is estimated that EPS will be 0.85/0.97 yuan (previous value 0.90/1.00 yuan) in 2024-2025 (previous value 0.90/1.00 yuan), EPS 1.07 yuan in 2026, and 14.66 yuan for BPS in 2024 (previous value 14.66 yuan). A/H Comparable Company 2024 PBWind agreed to have an average expected average of 1.05/0.44 times, giving A/H shares a target PB of 1.05/0.44 times, all maintaining a “buy” rating, and a target price of RMB 15.39/HK$7.12 (previous value of RMB 15.75/HK$7.75).
Stock market share is rising steadily, and net interest income is growing steadily
Net brokerage revenue was 5.5 billion yuan, -14% year over year. The company continued to improve the breadth and depth of customer service. At the end of the period, the number of normal trading customers was about 17.76 million, +8% compared with 3.72 trillion yuan of customer assets; the number of individual wealth management customers was +3%, and the number of high-net-worth customers was +6% year-on-year. The total number of subscribers to the fund investment business “e-Procurement” was 58,600, and the product holding scale at the end of the year was 4.66 billion yuan, +76% over the same period last year.
Stock trading market share increased slightly by 0.01pct to 5.23% in '23 in '23. Net interest income was 1.5 billion yuan, +8% YoY. At the end of the period, the company's financing balance was 82.8 billion yuan, and the balance pending repurchase of the stock pledge repurchase business was 22.8 billion yuan, of which the balance of own capital investment was 18.5 billion yuan.
The scale of financial investment is growing, and the scale of equity investment banks is under pressure
Investment revenue was 6.7 billion yuan, +32% year over year. The total financial investment volume at the end of the period was 367.9 billion yuan, +21% over the same period, with investment in other equity instruments increasing sharply by RMB 161 billion to RMB 17.7 billion. The company adjusted and optimized the investment structure in a timely manner according to changes in the market situation, and estimated the equity and fixed income investment scale at the end of the period was 585/246.6 billion yuan, respectively, +107% and +17% compared with the same period. Investment bank net revenue was -7% YoY, or 1.3 billion yuan.
The IPO/refinancing/bond underwriting scale was $71/132/325.8 billion, respectively, or -30%/-57%/+18% year-on-year.
The company continues to promote the business transformation of the “Lingyue Plan” warehousing enterprises. At the end of the period, the total number of warehousing enterprises reached 441, and a total of 45 enterprises have achieved investment banking business transformation.
Asset management performance has declined, and the profit contribution of participating fund companies is still ahead of net asset management revenue of 700 million yuan, -14% over the same period last year. The total asset management scale of China Merchants Asset Management at the end of the period was 294.9 billion yuan.
The final AUM of Bosch Fund/China Merchants Fund in which the company participated was 1,5649/1,550.4 billion yuan respectively, of which the public fund size (excluding linked funds) was 9496/860.6 billion yuan. During the year, the operating income of Bosch Fund/China Merchants Fund was 4.588/5.294 billion yuan respectively, and net profit was 15.24/17.53 billion yuan respectively. After considering the shareholding ratio, the total operating income contribution was 23.4%, and the total net profit contribution was 17.5%, which continued to maintain a high level.
Risk warning: Business development falls short of expectations, risk of market fluctuations.