2023 Annual Report Overview: Orient Securities achieved operating income of 17.090 billion yuan in 2023, -8.75%; realized net profit to mother of 2,754 billion yuan, -8.53% year over year; basic earnings per share of 0.30 yuan, -14.29% year over year; weighted average return on net assets of 3.45%, -0.71 percentage points year on year. It is proposed to pay 1.50 yuan (tax included) in 2023.

Comment: 1. In 2023, the share of the company's net interest income and investment income (including changes in fair value) increased, and the share of brokerage, investment banking, asset management, and other revenue declined. 2. The market share of brokerage business revenue remained stable. The scale of consignment sales, institutions and high-net-worth customers continued to grow, and the net revenue from consolidated brokerage business fees was -9.85% compared to the same period. 3. The scale of equity financing declined significantly. The principal underwriting amount of various types of bonds continued to increase, and the net revenue from processing fees for consolidated investment banking operations was -12.87%. 4. Market factors put pressure on brokers' asset management business. Public fund performance contributions declined at the same time, and net revenue from processing fees for consolidated asset management operations was -23.29% year-on-year. 5. Fixed income self-employment drove the total scale of self-operated business to a new high. The trading stock business operated at low positions, and consolidated investment income (including changes in fair value) was +15.82% year-on-year. 6. The balance share of the two loans was stable, further reducing the size of stock pledges. Credit impairment losses remained high, and net income from consolidated interest was +7.56% year-on-year.

Investment advice: Affected by the market environment during the reporting period, the company's asset-light business was under pressure. In particular, maintaining a high level of credit impairment dragged down the company's overall operating performance. At the same time, the company has accelerated the construction of a buyers' wealth management system, and the number of brokerage customers continues to grow; Eastern Securities Asset Management and Huitianfu Fund have vigorously enhanced investment and research capabilities and stabilized the market advantage of the company's asset management brand; self-management promoted the transformation of sales transactions, and the continuous growth in the scale of fixed income investment helped to increase the stability of the company's investment income. The company's EPS for 2023 and 2024 is expected to be 0.31 yuan and 0.34 yuan, respectively, and the BVPS will be 8.88 yuan and 9.14 yuan respectively. Based on the closing price of 8.13 yuan on April 9, the corresponding P/B will be 0.92 times and 0.89 times, respectively, maintaining an investment rating of “increase in holdings”.

Risk warning: 1. The weakening equity and fixed income market environment has led to a decline in the company's performance; 2. Risk of market fluctuations; 3. The policy effects of investment-side reforms fall short of expectations