Incident: The company disclosed the 2023 annual report and the 2024 quarterly report. In 2023, it achieved operating income of 2.49 billion yuan (YoY -4.7%), net profit to mother of 330 million yuan (YoY -17.5%), weighted average ROE of 2.25% (YoY -0.51pct), EPS was 0.08 yuan (YoY -20.0%); 2024Q1 achieved operating income of 670 million yuan (YoY -2.7%), and the weighted average ROE was 0.96% (same year over year), EPS was 0.03 yuan (same year over year).
By business line, the company achieved net revenue of 350 million yuan/190 million yuan/90 million yuan/80 million yuan/590 million yuan/590 million yuan in 2023, -9%/-32%/-12%/-62%/+217%; 2024Q1 brokering/investment banking/asset management/credit/self-operated business achieved net revenue of 80 million yuan/70 million yuan/210 million yuan/230 million yuan, respectively, -5%/+42%/-49%/+49%/+230 million yuan.
Asset management actively lays out public REITs, and the scale of trust is growing steadily. 1) In terms of brokerage asset management, the company built ESG and FOF investment first-mover advantages and ABS business characteristics, laid out public REITs business, and continued to operate the “First Startup Infrastructure” series of asset management products with public REITs as the main investment target. As of the end of 2023, the total amount of fiduciary management capital for the asset management business was 61.2 billion yuan, +11.25% compared to the end of the previous year. 2) In terms of public funds, Chuangjin Hexin, the holding subsidiary of the company, had a total fiduciary management capital of 998.2 billion yuan at the end of 2023, +18.90% compared to the end of the previous year, of which the public offering scale was +31.74% compared to the end of the previous year.
Fixed income continued to focus on transactions, and bond trading volume increased year-on-year. 1) In terms of fixed income sales, the company sold a total of 5031 units of fixed income in 2023, -8.38% year on year; total sales amount was 177.2 billion yuan, +2.26% year over year. 2) In terms of fixed income investment transactions, the company's cash trading volume, trading activity and influence increased steadily. The bond trading volume in the interbank and exchange markets in 2023 was 7.95 trillion yuan, +14.38% over the same period last year.
Investment banks continue to deepen their regional focus and actively seize business opportunities on the Beijing Stock Exchange. A venture capital bank has further consolidated its “two wings in one” regional layout with Beijing headquarters and Shanghai and Shenzhen as the two wings; the Beijing-Tianjin-Hebei, Yangtze River Delta, and Greater Bay Area regional focus strategic plans are gradually expanding to the periphery of key regions; using the Beijing Stock Exchange issuance and listing business as the focus of work, a total of 6 IPOs passed the exchange review in 2023, and 2 Beijing Stock Exchange projects were listed in early 2024.
Investment advice: Maintain a Buy-A investment rating. The company has distinct characteristics in the fixed income and asset management business sector. In 2023, Beijing State Management became the company's largest shareholder, which is expected to enhance shareholder empowerment. We expect the company's 2024-2026 EPS to be 0.09 yuan, 0.10 yuan, and 0.12 yuan, respectively, and will be given 1.85x2024 P/B, corresponding to a 6-month target price of 6.60 yuan.
Risk warning: Risk of macroeconomic downgrade/sharp market fluctuation/intensification of industry competition/policy changes.