[Event] Guolian Securities announced results for the first half of 2024: achieved operating income of 1.09 billion yuan, or -39.9%; net profit to mother of 87.71 million yuan, -85.4% year over year; corresponding EPS 0.03 yuan, ROE 0.5%, or -3.0 pct year on year. The second quarter achieved operating income of 0.91 billion yuan, -19.2% year-on-year, and +426.2% month-on-month; net profit to mother was 0.31 billion yuan, -22.0% YoY, turning a loss into a profit month-on-month.

The company comprehensively shapes the “general direction” wealth management brand and continues to promote wealth management transformation from the buyer's perspective.

Brokerage revenue in the first half of 2024 was 0.28 billion yuan, +6.9% year-on-year, accounting for 26% of revenue. The average daily share-based trading volume of the entire market was 961.6 billion yuan, -6.4% YoY. The company guides the shift from product sales concept to configuration sales by increasing product ownership assessments. The company's revenue from selling financial products on consignment was 0.017 billion yuan, +16.4% year over year, accounting for 6.2% of brokerage business revenue. The company's financial product sales scale was 9.647 billion yuan, -14.24% year over year. The average daily balance of the company's two loans was 9.43 billion yuan, a year-on-year decrease of 5.71%; the average daily market share of the business scale was 6.165 per 1,000, a decrease of 2% year-on-year.

Take multiple measures to provide diversified, long-chain financial services to physical enterprises. Investment banking revenue for the first half of 2024 was 0.17 billion yuan, -39.8% YoY. The underwriting scale of the equity business was -83.5% compared to the same period, and the underwriting scale of the bond business was -0.3% year-on-year. Shareholders' underwriting scale was 0.5 billion yuan, ranking 32nd; of these, 1 was an IPO, raised 0.017 billion yuan; and 1 was refunded, with an underwriting scale of 0.5 billion yuan. The principal underwriting scale of bonds was 28.4 billion yuan, ranking 28th; among them, the underwriting scale of corporate bonds, ABS, and financial bonds was 13.8 billion yuan, 12.8 billion yuan, and 1.8 billion yuan, respectively. There are 2 IPO reserve projects, ranking 29th, of which the two main boards and the Beijing Stock Exchange each have 1.

The company has steadily entered the ranks of mid-sized and above asset management institutions. Asset management revenue for the first half of 2024 was 0.31 billion yuan, +273.8% year-on-year. The brokers' asset management scale was 124.8 billion yuan, +6.4% year over year. The company has steadily entered the ranks of medium-sized and above asset management institutions, forming a good brand effect in the industry and clients. The League of Nations Fund strengthens and enhances investment and research capabilities and customer service levels, and comprehensively promotes high-quality business development. The total asset management scale of the League of Nations Fund was 183.39 billion yuan, an increase of 23.27% over the end of last year.

The decline in proprietary investment narrowed in the second quarter. Investment income (including fair value) for the first half of 2024 was 0.38 billion yuan, -61.0% year on year; investment income (including fair value) for the second quarter was 0.53 billion yuan, -10.9% YoY. The securities investment business is backed by the allocation of dividend value stocks, selected growth stocks as a spear, and the variety of positions is adjusted in a timely manner. The yield greatly outperforms the Shanghai and Shenzhen 300 Index. Fixed-income investments continuously expand investment types, continuously optimize position structures, strictly control credit risk, and achieve steady returns.

[Investment Proposal] The company's 2024-2026E EPS is expected to be 0.06, 0.07 and 0.07 yuan respectively, with net assets of 6.37, 6.45 and 6.52 yuan per share, respectively. Referring to the valuation level of comparable companies, we gave it 2024E2.0-2.1x P/B, corresponding to a reasonable value range of 12.74-13.38 yuan/share, maintaining a “superior to market” rating.

Risk warning: Trading volume continues to decline, and investment returns continue to decline due to increased equity market fluctuations.