Introduction to this report:
The year-on-year decline in 2024Q1 investment performance has put pressure on overall performance; the company's wealth management and institutional business expertise are constantly improving, which is expected to make better use of functionality and further improve and strengthen.
Key points of investment:
Maintain the “overholding” rating and maintain the target price of 7.99 yuan/share, corresponding to 33.86xPe and 1.26xPb in 2024. The company's 2023 revenue/net profit to mother was 10.6.27/1.964 billion yuan, -0.3%/-25.51%, weighted average ROE -2.04pct to 3.70% year over year; 2024Q1 revenue/net profit to mother 23.77/328 billion yuan, -42.99%/-60.38% year over year, weighted average RoE -1.01 pct to 0.56% year over year, performance was lower than expected. Based on the company's current business situation and market environment, the company's profit forecast was lowered to 0.24 /0.27 yuan (0.38/0.42 yuan before adjustment), and the additional forecast for 26 years was 0.31 yuan. Considering the continuous improvement of the company's wealth management expertise, the target price was maintained at 7.99 yuan/share, and the “gain” rating was maintained.
Results were pressured in 2023 by market trading activity and public fund rate reforms; the year-on-year decline in 2024Q1 investment performance weighed on overall performance. 1) In 2023, the company's brokerage business was -18.25% to 2.253 billion yuan, accounting for -48.79% of the adjusted revenue (operating income - other business costs) increase. Meanwhile, due to the reduction in public fund rates, the net revenue from asset management business was -16.37% to 2,421 billion yuan, accounting for -48.78% of the adjusted revenue increase, putting pressure on performance; 2) 2024Q1, the net revenue of the company's investment business was -67.67% to 3.36 billion yuan. It contributed to -43.85% of the adjusted revenue increase, putting pressure on performance; the main reason was that under a high year-on-year basis, the company's return on investment was -0.79pct to 0.27% year over year.
The professional level of the company's wealth management and institutional business continues to improve, and it is expected to make better and stronger functions better and stronger. Wealth management vigorously promotes the level of specialization of investment services and the refinement of customer service systems to achieve wealth management transformation with allocation capabilities as the core; institutional business strengthens one-stop comprehensive financial service capacity building around customer service needs throughout the life cycle, which is expected to make better use of functionality and further improve and strengthen.
Catalyst: State-owned financial capital management action plan introduced.
Risk warning: The equity market fluctuates greatly; the transformation of corporate wealth management falls short of expectations.