Key investment points: The company increases research business and uses investment as the driving force and research to promote synergy in various businesses. The investment strategy is steady, and the investment returns are high. The sharp recovery in the company's own business in 2023 from a low base boosted performance. The reasonable value range is 10.11-11.03 yuan, maintaining the “superior to the market” rating.
[Event] Guojin Securities announced its 2023 and 2024Q1 results: The company achieved operating income of 6.73 billion yuan for the full year of 2023, +17.4% year over year; net profit to mother of 1.72 billion yuan, +43.4% year over year; corresponding EPS of 0.46 yuan, ROE 5.4%, year-on-year. The sharp increase in the company's net profit to mother in 2023 was mainly due to a sharp recovery in investment income (including fair value) at a low base. The fourth quarter of 2023 achieved operating income of 1.70 billion yuan, +2.6% year-on-year, which was basically the same; net profit to mother was 480 million yuan, +28.4% year-on-year, and +33.4% month-on-month. Results for the first quarter of 2024: The first quarter of 2024 achieved operating income of 1.48 billion yuan, -24.0% year on year; net profit to mother of 370 million yuan, or -38.6% year on year; corresponding EPS of 0.10 yuan, ROE 1.1%, -0.8 pct year on year.
The wealth management brand has been fully upgraded, and the customer structure has been further optimized. In 2023, the company's brokerage revenue was 1.65 billion yuan, -0.1% year-on-year, accounting for 24.5% of revenue. The company's stock base transaction volume in 2023 was 6.1 trillion yuan, +7.4% year-on-year. The brokerage business revenue for the first quarter of 2024 was 380 million yuan, -1.3% year-on-year, accounting for 25.9% of revenue. In 2023, the company's revenue from consignment financial products was 193 million yuan, +2.1% year-on-year, accounting for 11.7% of brokerage business revenue. The scale of consignment financial products was 425.8 billion yuan, +12.7% year-on-year. At the end of 2023, the company's two financing balance was 24.4 billion yuan, +30% compared to the beginning of the year, 1.48% market share, and +0.26pct year over year. The company launched a wealth management brand strategy project in the second half of 2023 to promote the comprehensive upgrading of the company's wealth management brand in terms of product & service capabilities, system capabilities, organizational security, and resource support. In 2023, the cumulative number of clients in the company's wealth management business increased by 17% compared to the end of 2022, and the customer structure was further optimized.
The investment banking business insists on combining equity and debt, and deepens collaboration with various business systems. Investment banking revenue in 2023 was 1.34 billion yuan, -21.3% YoY; in the first quarter of 2024, investment banking revenue was 230 million yuan, -43.3% YoY. In 2023, the equity business underwriting scale was -21.5% year-on-year, and the bond business underwriting scale was +31.5% year-on-year. In 2023, the shareholder underwriting scale was 19.37 billion yuan, ranking 10th; of these, 13 were IPOs, which raised 7.1 billion yuan; and 13 were refunded, with an underwriting scale of 12.2 billion yuan. In 2023, the principal underwriting scale of bonds was 106.8 billion yuan, ranking 23rd; among them, the underwriting scale of corporate bonds, ABS, and corporate bonds was 95.8 billion yuan, 6.5 billion yuan, and 3 billion yuan respectively. There are 5 IPO reserve projects, ranking 11th, including 3 main boards in 2 cities, 1 Beijing Stock Exchange, and 1 GEM.
The scale of asset management declined in 2023, and the structured finance business had a first-mover advantage. The company's asset management business revenue in 2023 was 90 million yuan, -32.1% year on year; asset management business revenue for the first quarter of 2024 was 0.2 billion yuan, -8.8% year on year. At the end of 2023, the asset management scale was 123.5 billion yuan, -30.7% YoY. With the first-mover advantage of the first batch of domestic participants, the structured financing business is at the forefront of the industry in many segments.
Self-employment boosted overall performance in 2023. Investment income in 2023 (including fair value) was $1.64 billion, +644.5% YoY; investment income (including fair value) for the first quarter of 2024 was $430 million, -40.0% YoY. The company's fixed income business adheres to steady investment and actively promotes the development of bond market trading and treasury bond futures market trading business; equity investment strengthens investment research, is driven by fundamental research, focuses on Hakuba blue chip stocks, and also lays out indexed investments to control investment risks and enhance investment returns.
Investment advice: We expect the company's 2024-2026 EPS to be 0.45/0.47/0.50 yuan, and the BVPS will be 9.19/9.62/10.07 yuan respectively. Referring to the valuation level of comparable companies, we gave them 1.1-1.2x P/B in 2023, corresponding to a reasonable value range of 10.11-11.03 yuan, maintaining a “superior to the market” rating.
Risk warning: Trading volume continues to decline, and investment returns continue to decline due to increased equity market fluctuations.