First Venture released its 2024 mid-year report. In the first half of 2024, the company achieved total operating income of 1.524 billion yuan, a year-on-year increase of 5.47%; net profit to mother of 0.4 billion yuan, an increase of 26.56%; EPS was 0.10 yuan/share, an increase of 25%; and ROE was 2.64%, up 0.50 pct year on year. Empowered by Beijing State Administration, the largest shareholder, the company is expected to consolidate the “fixed income+asset management” two-wheel drive business advantage, focus on the Beijing Stock Exchange business, and continuously enhance the company's value.
Bond trading is active, and the investment business has grown by more than 40%. In the first half of 2024, the company achieved investment revenue of 0.566 billion yuan, a year-on-year increase of 40.2%, mainly due to the good performance of the bond investment business; the company's bond trading volume in the interbank and exchange markets was 4.69 trillion yuan, an increase of 28% year on year; and the interbank market trading volume was 1.63 trillion yuan, an increase of 29% year on year. The company's trading strategies are flexible and diverse, and cash trading volume, trading activity and influence are expected to increase steadily.
Extend fixed income investment boundaries and explore differentiated development in asset management. The company achieved revenue of 0.467 billion yuan from asset management business, a year-on-year decrease of 0.83%. Chuangjin Hexin's total fiduciary management capital was 910.617 billion yuan, a decrease of 87.563 billion yuan from the end of 2023, or 8.77%. Among them, the management scale of public funds was 152.421 billion yuan, an increase of 38.362 billion yuan over the end of 2023, an increase of 33.63%. The fund subsidiary Chuangjin Hexin Fund has strong investment management and fintech capabilities, and is expected to expand institutional clients in the future.
The strategy focuses on the Beijing Stock Exchange business, and investment banks are rich in reserves. In the first half of 2024, due to strict market IPO supervision and control, the company achieved investment banking revenue of 0.154 billion yuan, a year-on-year decrease of 14.35%. In the same period, a venture capital bank issued and listed its IPO project on the Beijing Stock Exchange, raising 0.555 billion yuan; a venture capital bank ranked first in terms of the number of companies listed on the Beijing Stock Exchange and the scale of capital raised. A venture capital bank underwrote 1.41 billion yuan of Beijing Stock Exchange bonds, ranking first in the industry. The company's investment bank increased its New Third Board business and contributed to the Beijing Stock Exchange business.
Improve the investment service system and expand wealth opportunities. Affected by market sentiment, in the first half of 2024, the company achieved brokerage revenue of 0.154 billion yuan, a year-on-year decrease of 14%; the cumulative number of registered users of the company “Yichuang Zhifutong” exceeded 0.14 million, an increase of 5% over the previous year; the sales scale of financial products was 6.45 billion yuan, up 7.69% year on year; and the scale of investing in contracted customers and contracted assets increased 168.33% and 249.76% over the end of 2023.
The company focuses on wealth management, improving the service system, and promoting high-quality development of wealth management.
Risk warning: Market decline brings uncertainty to brokers' performance and valuation repair; financial supervision is becoming stricter.
Investment advice: Based on fluctuations in the equity market, the continued tightening of IPOs, the impact of new regulatory regulations on the securities industry, and the company's interim report data, we reduced the company's net profit to mother by 8.96%, 8.41% and 8.40% respectively in 2024-2026. The company's net profit for 2024-2026 is estimated to be 0.42/0.49/0.53 billion yuan, up 28.5%/15.1%/8.3% year on year. The PE corresponding to the current stock price is 50.4/43.8/40.5x, and PB is 1.5/1.5/1.4x. Considering that the company is a special brokerage firm, the “fixed income+asset management” business has obvious advantages, and we maintain the company's “superior to market” rating.