财富管理及机构经纪业务表现稳健。1）1H24 经纪业务净收入同比-8%至49 亿元（证券经纪-11%/期货经纪+22%），证券经纪中：代理买卖证券收入同比-7%至30 亿元（vs.全市场股基交易额-8%），代销金融产品收入-11%至7 亿元，交易单元席位租赁收入同比-26%至6 亿元；期末公司零售客户数较年初+50 万至1,470 万户，资产规模实现正增长至10 万亿元量级，并发力境外财富管理、推动相关产品销售规模和收入稳增。2）利息净收入同比-47%至11 亿元（利息收入-4%/利息支出+7%），利息收入下滑主因两融利息收入同比-18%、期末两融规模较年初-5%/市占率+0.4ppt 至7.3%，利息支出增加主因卖出回购金融资产利息同比+35%。1H24 results are in line with our expectations
CITIC 1H24's revenue was -4% to 30.2 billion yuan, adjusted revenue (excluding other business revenue, mainly commodity trade) -10% to 26.7 billion yuan, net profit -6.5% to 10.6 billion yuan, annualized ROAE -1.1 ppt to 7.7% year over year, in line with our expectations; 2Q net profit -5% YoY/+13% month-on-month, and 8.0% annualized ROE in a single quarter. Total assets at the end of the period were +3% to 1.5 trillion yuan compared to the beginning of the year, and the adjusted leverage ratio was -0.03x to 4.32x compared to the beginning of the year (1Q expansion accelerated to 4.52x/2Q -0.2x month-on-month). In addition, the company announced that it plans to pay an interim cash dividend of 3.56 billion yuan, accounting for 35% of the current profit.
Development trends
Wealth management and institutional brokerage business performed steadily. 1) Net revenue from 1H24 brokerage business -8% YoY to 4.9 billion yuan (securities brokerage -11% /futures brokerage +22%), in securities brokerage: -7% to 3 billion yuan (vs. total market share base transaction volume -8%), revenue from consignment financial products -11% to 0.7 billion yuan, transaction unit seat rental revenue -26% to 0.6 billion yuan; the number of retail customers of the company at the end of the period was +0.5 million to 14.7 billion yuan compared to the beginning of the year One million households have achieved positive growth in asset size to the 10 trillion yuan level, and are also contributing to overseas wealth management to promote a steady increase in sales scale and revenue of related products. 2) Net interest income was -47% to 1.1 billion yuan (interest income -4% /interest expense +7%). The decline in interest income was mainly due to interest income of the two loans -18% year over year, the size of the final two finance loans was -5%/market share +0.4ppt to 7.3% compared to the beginning of the year, and the increase in interest expenses was mainly due to interest on the sale and repurchase of financial assets +35% year-on-year.
The scale of brokers' asset management and public offering has rebounded. Net revenue of 1H24 asset management and funds was -1% to 4.9 billion yuan, of which: brokers' asset management scale was +5% to 1.46 trillion yuan at the beginning of the year, of which the pooled asset management scale was +20% to 357.1 billion yuan; in public equity, the total size of Huaxia Fund was +18% compared to the beginning of the year to 2.16 trillion yuan, and 1H24 revenue/net profit was -1.1%/-1.2% year-on-year to 3.67/1.06 billion yuan, respectively; in terms of private equity and alternative investments, Jinshi Investment and China CITIC Securities lost 0.15/0.71 billion yuan in net profit, respectively.
The investment banking business declined with the market, and its leading position in the industry was consolidated. 1H24 investment banking revenue was -55% to 1.7 billion yuan. Among them, domestic stock underwriting was -80% and bond underwriting was +3%. Domestic and foreign equity financing and bond financing ranked first in the market.
Investment income grew steadily on a high base. 1H24 investment income (investment income+change in fair value+exchange gain/loss - joint venture and joint venture investment) was +1.5% to 12.7 billion yuan; if interest income from other debt investments is taken into account, the consolidated investment income was +1.3% to 13.7 billion yuan, corresponding to annualized comprehensive financial asset investment return of -0.6ppt to 3.7%.
Profit forecasting and valuation
Considering declining market activity and investment fluctuations, we lowered the company's 24e/25e net profit by 18%/18% to 17.9 billion/20.8 billion yuan. Currently, the company's A shares are traded at 24e/25e 1.1x/1.0x P/B, and Hong Kong stocks are traded at 24e/25e 0.6x/0.6x P/B (all valuations exclude perpetual bonds). We lowered our target price for A Shares/H Shares by 8%/12% to HK$24.0/HK$16.0. A shares correspond to 24/25e 1.4x/1.3x P/B and 30% upside, and H shares correspond to 24/25e 0.8x/0.8x P/B and 43% upside.
risks
Trade volume shrinks, markets fluctuate greatly, and regulatory uncertainty.
