[Event] First Venture announced its results for the first half of 2024: achieved operating income of 1.52 billion yuan, +5.5% year over year; net profit to mother 0.4 billion yuan, +26.6% year over year; corresponding EPS of 0.10 yuan, ROE 2.6%, +0.5pct year on year.

The increase in the company's net profit to mother is mainly due to good self-operating performance. The second quarter achieved operating income of 0.85 billion yuan, +12.9% YoY, +26.3% month-on-month; net profit to mother 0.26 billion yuan, +46.6% YoY, +79.3%.

Strengthen asset allocation capabilities and improve the investment advisory service system to continuously improve customer experience. Brokerage revenue in the first half of 2024 was 0.15 billion yuan, -14.4% year-on-year, accounting for 10% of revenue. The average daily share-based trading volume of the entire market was 961.6 billion yuan, -6.4% YoY. The company's revenue from consignment financial products was 6.57 million yuan, -26.9% year-on-year, accounting for 4.3% of brokerage business revenue, and 6.5 billion yuan of escrow financial products, +7.7% year-on-year. The company's balance of two loans was 6.1 billion yuan, -12% compared to the beginning of the year, with a market share of 0.4%, which was basically the same as at the beginning of the year.

Continue to focus on and lay out the Beijing Stock Exchange's IPO business, and insist on deepening and implementing the Beijing Stock Exchange's business strategy. Investment banking revenue for the first half of 2024 was 0.1 billion yuan, -15.5% YoY. The share business underwriting scale was -83.6% year-on-year, and the bond business underwriting scale was -44.2% year-on-year. The shareholder underwriting scale was 0.56 billion yuan, ranking 30th. These are 2 IPOs.

The principal underwriting scale of bonds was 5.7 billion yuan, ranking 63rd; among them, the underwriting scale of corporate bonds, ABS, and corporate bonds was 5.4 billion yuan, 0.3 billion yuan, and 0.1 billion yuan, respectively. There are 2 IPO reserve projects, ranked 29th, and both are GEM.

The company's fixed income sales and investment trading business continues to be recognized by customers and the market. The company's cash trading volume, trading activity and influence have steadily increased. The company uses a flexible strategy combining spread trading, trend trading, structured trading and market making. The bond trading volume in the interbank and exchange markets was 4.69 trillion yuan, +28.4% over the same period last year. The total sales amount for each type of fixed income was 91.986 billion yuan, +12% over the same period last year.

Adhere to customer-centricity, explore customer needs in depth, and continuously develop and deepen the fixed income and “fixed income +” product lines with rich strategies and term types. In the first half of 2024, the company's asset management business revenue was 0.47 billion yuan, -0.8% year-on-year.

Asset management scale was 60.1 billion yuan, -1.8% YoY. The company focuses on the strategic placement and investment business of the Beijing Stock Exchange, and has completed strategic placement investments for a number of Beijing Stock Exchange listed companies. The total amount of funds managed by Chuangjin Hexin in the first half of 2024 was 910.617 billion yuan, -8.8% compared with the beginning of the year; of these, the public fund management scale was 152.421 billion yuan, +33.6% compared to the beginning of the year.

Proprietary investment reversed the market and achieved relatively high growth. Investment income (including fair value) for the first half of 2024 was 0.57 billion yuan, +40.2% year over year; investment income (including fair value) for the second quarter was 0.34 billion yuan, +73.6% year over year. Under the overall downward environment of the A-share market, proprietary investment and trading business achieved steady returns.

[Investment Proposal] We expect the company's 2024E-2026E net profit to be 0.712 billion yuan, 0.758 billion yuan, and 0.826 billion yuan, respectively, +115%/+7%/+9% year-on-year, with net profit per share of 0.17/0.18/0.20 yuan, respectively, and net assets per share of 3.72/3.90/4.10 yuan, respectively. We gave it 1.5-1.7 x 2024 PB (considering that the company is characterized by fixed income, is a scarce target among existing listed brokerage firms, and an appropriate valuation premium is given for active asset management products), and the corresponding reasonable value range is 5.58-6.32 yuan, maintaining a “neutral” rating.

Risk warning: Continued market downturn has led to a decline in business scale, and market supervision has been further strengthened.