Consignment revenue bottomed out month-on-month. The big model helped the next-generation financial terminal 2024H1 company's total revenue/net profit to mother of 4.945/4.056 billion yuan, -14%/-4% year-on-year. The performance was in line with our expectations. Fund consignment revenue was under year-on-year pressure, seat commissions fell sharply or were impacted by public offering fee reforms. The share of the two finance markets increased, and the year-on-year increase in proprietary investment income supported performance. Considering the sluggish market environment and assuming that the final commission limit is reduced from 50% to 40% starting in 2025, we revised the company's net profit forecast for 2024-2026 to 8/8.4/9.4 billion yuan (previously adjusted to 86/101/117), -3%/+6%/+12% compared to the same period, corresponding EPS of 0.50/0.53/0.60 yuan. The current stock price corresponds to 2024-2026 PE 20.7/19.6/17.5 times. In June 2024, Dongfang Wealth's “Wonderful Vision” financial model and Choice Data pioneered the launch of next-generation smart financial terminals in the industry, covering seven major scenarios, bringing more intelligent experiences to financial advancement, investment and research quality improvement, and transaction efficiency. They are optimistic about AI empowerment. The company's fundamentals and valuation are low, focus on beta catalysis, and maintain a “buy” rating.

The scale and sales volume declined month-on-month, compounded by fee cuts. The sales revenue of the 2024H1 fund was 1.41 billion yuan, -30% over the same period, affected by the weak equity fund market and the reduction in management fees. The second-quarter consignment revenue of 0.71 billion yuan was +1% month-on-month, reflecting resilience. (1) 2024H1's non-cargo-based sales volume was 499.7 billion yuan, or -1% year-on-year. We estimate that the non-cargo-based sales market share reached 5.6%, compared to -1.1 pct in 2023.

(2) The size of 2024H1 active equity funds in the entire market was -20% year-on-year. Combined with a reduction in management rates, end commission revenue is expected to decline year-on-year. At the end of 2023, Tiantian Fund's partial share/non-commodity share was 402.9/549.6 billion yuan, -13%/-6% year-on-year.

The market share ratio of brokerage and finance continued to rise, with impressive earnings from proprietary investment (1) 2024H1 securities brokers' net income was 2 billion yuan, -10% year over year, and the average daily share base turnover of the entire market was 0.99 trillion yuan, -6% year over year. The decline in net income of securities brokers exceeded the decline in market trading volume, mainly dragged down by the sharp year-on-year decline in seat commissions. 2024H1 seat commission revenue was 0.05 billion yuan, -78% year over year, or affected by the public offering commission reform policy. A significant decline in seat trading volume is expected to drag down the share base turnover market share and commission rate.

2024H1's share base turnover market share ratio was 3.98%, compared to 2023 -0.04pct; net brokerage commission rate (excluding revenue from consignment products) was 2.1 million, -4% year-on-year. (2) 2024H1 futures brokerage net revenue of 0.36 billion, +51% year-on-year.

(3) Net interest income was 1.03 billion yuan, -8% year-on-year, with a market share of 2.92% (excluding margin), +0.08pct from the beginning of the year, continuing the upward trend. (4) Proprietary investment income of 1.63 billion yuan, +42% year over year, annual return on investment 4.01%, +0.6pct year on year. Financial investment assets at the end of the period were 94.1 billion yuan, +34% year-on-year, and +29% compared to the beginning of the year.

(5) 2024H1 sales, management and R&D expenses were 0.15/1.15/0.56 billion yuan, -37%/-2%/+10% year-on-year. The three types of expenses accounted for 37.5% of revenue, an increase of 2.7 pct over 2023. The market is sluggish, the company's marketing expenses have dropped significantly year-on-year, and R&D investment is still high.

Risk warning: risk of market fluctuations; uncertainty about fund channel fee reduction policies; market share growth falls short of expectations.