24Q1 CICC's revenue was 3.9 billion yuan, -38% YoY, -30% month-on-month; net profit to mother was 1.2 billion yuan, -45% YoY, -20%. ROE (unannualized) was 1.21%, -1.29pct year over year; the leverage ratio was 5.04 times, continuing to decline.

Overall overview: Market fluctuations are dragging down profits, and asset management is steadily slowing down. 24Q1 The company's revenue was 3.9 billion yuan, -38% year-on-month, -30% month-on-month; net profit to mother was 1.2 billion yuan, -45% year-on-year, -20% month-on-month. At the end of the first quarter, the company's total assets were 613.7 billion yuan, -2% compared to the end of the previous year; net assets attributable to mother were 105.9 billion yuan, +1% compared to the end of the previous year.

ROE (unannualized) was 1.21%, -1.29pct year over year; the leverage ratio was 5.04 times, continuing to decline.

Self-employed/ brokering/ investment banking/ asset management/ credit business accounted for 55%/25%/13%/8%/-18% of the main business, respectively, -4/ +5/ +4/ +3/ -14pct.

Fee-related business: Brokerage investment banks are under pressure, and asset management is steady. (1) Brokerage revenue is under significant pressure. 24Q1 brokerage revenue was $8.3 billion, -33% YoY and -18% YoY. The average daily share base turnover of the entire market was 1021.7 billion, +3% year over year and +8% month over month. Revenue is expected to drop sharply year-on-month due to multiple factors such as declining share of the stock base market share, fluctuating equity and declining fund holdings, and the cooling of new development funds. (2) Investment bank revenue has shrunk, business market share is stable, and project reserves are sufficient. 24Q1 investment bank revenue was 450 million, -25% year-on-year and -58% month-on-month.

The 24Q1 IPO raised 1.2 billion dollars, -72% YoY, -12% month-on-month, 5.30% market share, ranking sixth in the industry; refinancing amount of 8.3 billion yuan, -76.6% YoY, +44% month-on-month, 13.47% market share, ranking second in the industry; the bond underwriting amount was 221.4 billion, -9% YoY, -34% month-on-month, with a market share of 8.02%, ranking fifth in the industry. Stock finance rankings have all risen, and debt underwriting rankings have retreated slightly. In addition, the company has sufficient project reserves. At the end of March, a total of 27 Chinese stock finance (IPO+ refinancing) projects were carried out, ranking fourth in the industry.

(3) Asset management business was steady and picked up month-on-month. 24Q1 asset management revenue was 270 million, -18% year-on-year and +2% month-on-month.

The decline in the scale of asset management and the decline in management rates is expected to be the reason for the year-on-year pressure on revenue; however, after a few years, the market overfell and rebounded, and net asset management values recovered, leading to a month-on-month recovery in revenue. The increase in advance payments collected from asset management operations led to a contract debt of 660 million yuan, +61% compared to the end of the previous year. The scale of asset management is expected to continue to rise.

Capital business: Self-employment declined sharply, and credit loss increased. (1) Equity investment dragged down, and proprietary income declined sharply. 24Q1 Proprietary Revenue of 1.85 billion, -49% YoY and -48% YoY. At the end of the first quarter, the company's transactional financial assets were 255.9 billion, -10% compared to the end of the previous year; derivative financial assets were 10.6 billion yuan, compared to -12% at the end of the previous year.

It is expected that the equity market declined and derivatives fluctuated at the beginning of the year, causing related financial assets to shrink. Furthermore, it is worth noting that the company invested 1.6 billion dollars in other equity instruments or increased its own positions under the influence of high dividend strategies.

(2) The scale of finance has shrunk, and credit revenue has declined. Net interest income was $590 million in 24Q1 and -240 million in 23Q1, and the loss margin increased. The purchase and resale of financial assets of 24.7 billion dollars was +24% compared to the end of the previous year. The scale of the two financing contracts. At the end of the first quarter, the company raised 34.3 billion dollars, compared with -4% at the end of the previous year. Interest income was -11% year-on-year and -3% month-on-month. Furthermore, interest income from the depository financial sector is expected to be due to the market downturn affecting investor confidence, leading to a slight decline in security deposits and settlement funds.

Investment advice: Maintain a “Highly Recommended” rating. The company has a leading strategic layout and adheres to the “three modernizations and one family” strategy. Rooting in China, integrating the world, embracing the future, and deeply cultivating the region is still the leading strategy. Short-term performance was slightly lower than expected due to fluctuations in wealth management business and investment banking business, as well as the unfavorable situation faced by proprietary operations. Looking forward to future market policies, the attitude of supporting capital market development is firm, and market sentiment has clearly recovered, which is beneficial to the brokerage sector and the company's various business development. We forecast that the company's net profit for 24/25/26 will reach 63/67,7.1 billion yuan, +2%/+6% YoY. We maintained the company's target price at 40.96 yuan, corresponding to 31.5 times PE in 2024, with a space of about 18%, and maintained a highly recommended rating.

Risk warning: Policies are not as strong as expected, market fluctuations have intensified, and the company's market share has not increased as much as expected.