The company disclosed the 2024 semi-annual report on August 31

In the first half of 2024, the company achieved total revenue of 1.086 billion yuan (-39.91%), net profit to mother of 0.088 billion yuan (-85.39%), net profit after deducting 0.077 billion yuan (-87.00%), and basic earnings per share of 0.03 yuan (-85.71%). The company's ROE for the first half of 2024 was 0.48%, a decrease of 3.00 pct from the same period last year.

Asset management business revenue has increased dramatically, and the scale of management has increased positively

In the first half of 2024, Guolian Securities Asset Management officially opened, achieving a smooth transition from the company's securities asset management business to Guolian Securities asset management. As of 24H1, the company was affected by the consolidated Guolian Fund and achieved net asset management revenue of 0.312 billion yuan (+271.43%) and asset management fiduciary capital of 124.817 billion yuan (+12.01%), of which public funds (including large pools) had assets of 11.994 billion yuan (+83.48%) and pooled assets of 34.645 billion yuan (+108%). In terms of public funds, the total asset management scale of the League of Nations funds was 183.39 billion yuan, an increase of 23.27% over the end of last year.

The brokerage business bucked the trend and the number of clients expanded

In the first half of the year, the total market stock trading volume was 115.2 percent (-7.62%), and market trading sentiment was low. As of 24H1, the net revenue from the company's brokerage business was 0.279 billion yuan (+6.90%), achieving contrarian growth. The investment and research department contributed the main increase, and the transaction unit seat rental revenue rose 38.21% year on year to 0.073 billion yuan. In terms of the number of customers, the company also achieved positive growth. By the end of the reporting period, the number of new customers was 0.1194 million, and the cumulative total number of customers was 1.8558 million, an increase of 10.06% over the previous year.

The investment banking business is cooling down, and the decline is obvious

In the first half of 2024, the issuance pace of the A-share equity financing market continued to slow, and the market equity financing scale was 133.9 billion yuan (-79%). Influenced by the market, the company's A-share IPO volume in the first half of the year was 0.017 billion yuan (-98.84%), and the refinancing scale was 0.278 billion yuan (-82.49%). In terms of debt financing, 2024H1's total debt underwriting amount was 20.917 billion yuan (-24.85%), with a total underwriting of 81 orders. Of these, 68 corporate bonds were issued, and the underwriting amount was 18.827 billion yuan (-28.12%).

Net interest income turned into a loss, putting pressure on the two finance business

In the first half of the year, the company's net interest income was 0.089 billion yuan (-201.14%), of which net income from the two finance business was 0.266 billion yuan (-0.62%). As of the end of the reporting period, the average daily balance of the company's two loans was 9.43 billion yuan (-5.71%), and the average daily market share of the business scale was 6.165% (-2%). Financial assets were bought and resold at 0.082 billion yuan (-6.59%) in the first half of the year. In terms of equity pledges, the principal balance of the company's stock pledge repurchase business was 2.326 billion yuan, a decrease of 0.068 billion yuan from 2.394 billion yuan at the end of 2023. It is expected that as credit business regulations are tightened and demand continues to be sluggish, the balance of the securities lending business will continue to decline in the future.

Proprietary businesses are clearly under pressure, dragging down performance

In the first half of the year, the company achieved net revenue of 0.375 billion yuan (-61.02%) and a yield of 3.05% (-20.78%). Of these, the fair value of bonds/stocks/public funds/private equity funds was 241.18/1.729/2.438/1.558 billion yuan respectively, with increases and decreases of +8.32%/-47.58%/-48.66%/-65.44%, respectively, from the beginning of the period

Investment advice

On August 8, 2024, Guolian Securities announced that it plans to purchase 99.26% of the total shares of Minsheng Securities held by 45 counterparties, including the League of Nations Group and Fengquanyu, by issuing A-shares at a transaction price of 29.492 billion yuan. On September 3, Guolian Securities issued an announcement stating that the company plans to issue A-shares to purchase 99.26% of Minsheng Securities Co., Ltd.'s major asset restructuring matters and raise supporting capital have been approved by the Jiangsu Provincial Government's State-owned Assets Supervision and Administration Commission. The company's plan to acquire Minsheng Securities is progressing steadily and has now entered the final stage of implementation. Once the merger is successful, it is expected that Guolian Securities and Minsheng Securities will effectively utilize their mutual synergy and complementary advantages and significantly enhance the company's overall competitiveness. In the future, we will continue to pay attention to the results of the integration of the two brokerage firms. Despite the company's poor performance in the first half of the year, judging from the single-quarter data, there was a marked improvement from month to month. We predict that the company's basic earnings per share for 2024-2026 will be 0.07 yuan, 0.20 yuan, and 0.25 yuan, respectively, and net assets per share will be 6.33 yuan, 6.48 yuan, and 6.67 yuan respectively, maintaining a “buy” rating.

Risk warning: Risk of market fluctuations, market activity falling short of expectations, increased competition in the fund sales market