Core views:
Performance retracted somewhat under the 24Q1 high base. 2024Q1 achieved revenue of 6.105 billion yuan, -32.11% year-on-year; net profit to mother of 2,291 billion yuan, -29.39% year-on-year. Net exchange loss in 24Q1 was $37 million, up 93.5% from 23Q1. The 24Q1 weighted average ROE was 1.37%, -0.49 pct year on year; after excluding agent payments, the leverage ratio was 3.89 times, down 0.26 times year over year.
The asset management business continues to grow, and brokerage and investment banks have declined due to market influence. (1) Pan-retail revenue declined slightly. The average daily turnover of AB shares in Q1 2024 was 895.7 billion yuan, +1.90% over the same period last year. 24Q1 achieved net brokerage revenue of 1,358 billion yuan, -11.4% year-on-year.
(2) Investment banking revenue declined, and Q1 net revenue reached 576 million yuan, -26.1% year-on-year.
According to Wind, 2024Q1's share underwriting amount reached 7.753 billion yuan, ranking third.
(3) Asset management business grew, with Q1 revenue of 1,106 billion yuan, +10.2% year-on-year.
Q1 The market fluctuated greatly, some quantitative transactions retreated, and pan-proprietary revenue declined significantly under a high base. (1) Shanghai and Shenzhen 300 rose +3.10% in the 24Q1 market (+4.63% in the same period last year); China Securities full debt +2.34% (+0.98% in the same period last year), 24Q1 company's investment income (including fair) of 2.102 billion yuan, -61.0% year over year, mainly due to fluctuations in tier 1 and 2 valuations and derivatives market adjustments. In 24Q1, the company's transactional financial assets, derivative financial assets, and derivative financial liabilities were -3%, +39%, and +40%, respectively. (2) The balance of the two financing markets at the end of the first quarter was -4% year-on-year. The company's 24Q1 net interest income was 230 million yuan, -23.3% YoY, mainly due to interest expenses +3% YoY.
Profit prediction and investment advice: In the context of building a first-class investment bank, the company's key asset business collaborative development, technological empowerment and international layout are leading. Short-term market fluctuations will not change the company's operating resilience and advantages. The company is expected to have net assets of $20.8 and $21.99 per share for 24-25. The Company's A shares are valued at 1.2xPb in 2024, corresponding to a reasonable value of 24.96 yuan/share. Considering the A/H premium, the reasonable value of H shares is HK$17.05 per share, all of which are rated “buy”.
Risk warning: The revenue structure fluctuated greatly, the market sluggish led to a sharp decline in turnover, and the proprietary business was impacted by market fluctuations, etc.