Overview of the 2024 mid-year report: Fangzheng Securities achieved operating income of 3.722 billion yuan, -8.18% year over year; realized net profit to mother of 1.351 billion yuan, -6.15% year over year; basic earnings per share of 0.16 yuan, -5.88% year on year; and weighted average return on net assets of 2.93%, -0.35 percentage points year on year. It is planned to pay 0.48 yuan (tax included) for the first half year of 2024.

Comment: 1.2024H The share of the company's investment income (including changes in fair value) and net revenue from asset management business increased, while the share of brokerage, investment banking, interest, and other revenue all declined to varying degrees. 2. The market share of commission revenue continues to increase, the share of institutional brokerage remains stable, and the net revenue from processing fees of consolidated caliber brokerage business was -6.51% year-on-year. 3. Strengthen the debt financing business to hedge the downward pressure on the investment banking business, and the net income from handling fees from the consolidated investment banking business was -38.28% year-on-year. 4. The fixed income business scale of brokerage asset management continued to grow, and net revenue from consolidated asset management fees was +32.61% year-on-year. 5. Equity self-employment achieved good returns, fixed income self-employment continued to increase, and consolidated investment income (including changes in fair value) was +13.53% year-on-year. 6. The balance of the two loans declined slightly with the market, the market share stabilized, and the scale of stock pledges operated at a low level. The net income from consolidated interest was -33.33% compared to the same period.

Investment advice: The company's retail and institutional brokerage business was stable during the reporting period, and the decline in net revenue from merger brokerage business was superior to the industry; equity self-employment seized structural opportunities and achieved good investment returns against the market. Fixed income self-operation continued to perform well, and investment income continued to increase; brokerage asset management fixed income business continued to grow. Although the trusteeship scale declined, revenue was rising steadily, and the size of public funds grew rapidly.

During the reporting period, the company signed a contract to sell shares in Credit Suisse Securities. The disposal of inefficient assets was accelerated, and operating efficiency continued to improve. The company's 2024 and 2025 EPS is expected to be 0.23 yuan and 0.25 yuan, respectively, and the BVPS will be 5.70 yuan and 5.90 yuan respectively. Based on the closing price of 6.83 yuan on September 18, the corresponding P/B will be 1.20 times and 1.16 times, respectively, maintaining an investment rating of “increase in holdings”.

Risk warning: 1. The weakening equity and fixed income market environment has led to a decline in the company's performance; 2. Risk of market fluctuations; 3. The policy effect of capital market reform falls short of expectations