Core views
The company released its 2023 annual report and 2024 quarterly report. In 2023, it achieved operating income of 6.517 billion yuan, a year-on-year increase of 35.0%, and net profit to mother of 2,252 billion yuan, an increase of 48.43% over the previous year. The weighted average ROE was 6.67%, an increase of 1.71 pct over the previous year. The first quarter of 2024 achieved operating income of 1,410 million yuan, a year-on-year decrease of 21.03%, and realized net profit of 456 million yuan, a year-on-year decrease of 7.68%. The 24Q1 brokerage, investment banking, and asset management business all achieved contrarian growth. The investment business maintained steady performance based on last year's high base, and the company's operating quality continued to improve.
occurrences
The company released its 2023 annual report and financial report for the first quarter of 2024.
Brief review
Branch reform and institutional transformation have promoted steady and far-reaching wealth management business. In the first quarter of 2023 and 2024, the company's net brokerage revenue was $1.20 billion and $30 billion, respectively, up 1% and 8% year-on-year. In 2023, the growth rate of the number of customers exceeded the market average, and the number of wealth customers and high-net-worth customers both increased. The parent company's total number of customers exceeded 3.26 million, an increase of 14% over the previous year. Although the number of new accounts opened in the market fell 17% year on year, the scale of the company's innovative business, such as securities settlement, escrow, and fund investment, rapidly expanded, the contribution of bond transactions increased 157%, and the scale of fund investment business contracts increased 67% year over year.
The management attached great importance to building Project No. 1, and the investment banking business bucked the trend. In Q1 of 2023 and 2024, investment banks achieved net revenue of 760 million yuan and 140 million yuan respectively, an increase of 68% and a year-on-year decline of 8%. In 2023, the company successfully helped 6 companies complete their IPOs. Of these, 5 are from Zhejiang Province, ranking first in the provincial market; the debt scale increased to 123.4 billion yuan, an increase of 79% over the previous year, and the business ranking in the province ranked second.
The brokerage asset management industry is leading, and the scale of CaiTong Fund has grown. In Q1 of 2023 and 2024, net revenue from the asset management business was 1.55 billion yuan and 320 million yuan, respectively, up 6% and 2% year-on-year. Total AUM for asset management increased 10% year-on-year by the end of 2023. In 2023, CaiTong Asset Management achieved net profit of 460 million yuan, a year-on-year increase of 1%, and ROE of 20.2%, down 7 percentage points from 2022. Meanwhile, the public non-commodity AUM for the first quarter of 2023 and 2024 was 98.1 billion yuan and 102.8 billion yuan respectively, up 13% and 14% year-on-year, with market shares of 0.60% and 0.62%, respectively.
The company's revenue from 2024-2026 is estimated to be 6.707 billion yuan, 7.512 billion yuan, 8.451 billion yuan, and 3% year-on-year growth, and will achieve net profit of 2,343 billion yuan, 2,624 billion yuan, and 2,952 billion yuan, with year-on-year growth rates of 4%, 12%, and 12%; as of 2024/4/30, the corresponding PE valuation multiples will be 15.20x/13.57x/12.07x, respectively, and the PB valuation multiples will be 0.99x/0.88x/0.99x, respectively, to maintain “purchases” ” Ratings.
Risk analysis
The risk of increased capital market volatility. It means that market uncertainty has increased due to various factors, causing investors to face risks such as falling asset values and unstable investment returns. These factors may include changes in the macroeconomic environment, policy adjustments, and fluctuations in company performance. As these factors change, investors' confidence may be affected, leading to increased market volatility and investors at risk of loss. Therefore, in the capital market, investors need to maintain rationality, pay attention to market dynamics, and formulate reasonable investment strategies to reduce the risks caused by fluctuations. At the same time, regulators also need to strengthen market supervision, maintain market order, and protect the legitimate rights and interests of investors.
The risk of business development falling short of expectations. It refers to the various uncertainties and risks that the company may face in the process of business development, causing business growth to fail to meet the expected goals. This risk may stem from various aspects such as changes in the market environment, the rise of competitors, and the impact of technological innovation. To deal with this risk, companies need to develop comprehensive strategic plans, strengthen market research and competitor analysis, and continuously improve their competitiveness and adaptability. At the same time, the company also needs to pay attention to risk management, detect and resolve potential problems in a timely manner, and ensure the steady development of the business.
The risk that AI technology and applications will fall short of expectations. Despite significant advances in artificial intelligence technology over the past few years, there are still many uncertainties and risks. First, the pace of AI technology development may be affected by various factors, including technical bottlenecks, lack of funding, and policy restrictions. These factors may cause AI technology to develop at a slower pace than expected, thereby affecting the development of related applications.