Overview of the 2024 mid-year report: Huatai Securities achieved operating income of 17.441 billion yuan, -5.05% year on year; realized net profit to mother of 5.311 billion yuan, -18.99%; basic earnings per share of 0.55 yuan, -21.43% year on year; weighted average return on net assets of 3.18%, -1.05 percentage points year on year. It is planned to pay 1.50 yuan (tax included) for the first half year of 2024.

Comment: 1.2024H The share of the company's asset management, net income from interest and other revenue increased, and the share of net income and investment income (including changes in fair value) of brokerage and investment banks declined. 2. Brokerage business declined slightly with the market, and net revenue from consolidated brokerage fees was -13.64% year-on-year. 3. Although the investment banking business is under pressure, the overall competitiveness is still at the forefront of the industry. Net income from processing fees for the consolidated investment banking business was -42.17% compared to the same period last year. 4. The size of brokerage asset management and public funds continued to grow, and the net revenue from handling fees for consolidated asset management operations was +6.47% year-on-year. 5. Fixed income self-operation achieved good results, equity self-operation should be a drag. Consolidated investment income (including changes in fair value) was -31.49% year-on-year. 6. The balance and market share of both loans declined. The share pledge scale in the table declined significantly, and the net income from consolidated interest was +10.92% year-on-year. 7. International business revenue was +67.50% year-on-year, and continued to grow significantly.

Investment advice: Affected by the market environment during the reporting period, the company's retail brokerage business declined slightly with the market, but the decline in brokerage securities business (including seat leasing) was slightly superior to the industry; although the equity financing business was under heavy pressure, some core indicators strengthened against the market, and the industry position of the company's investment banking business remained stable; the scale of large-scale asset management continued to grow, and management fee revenue remained relatively stable; fixed income self-operation achieved good investment performance, but it is expected that equity ownership will drag down the company's overall operating performance. The investment income generated after the sale of AssetMark will significantly enhance the company's performance in 2024, and the company is expected to use this transaction to achieve year-on-year growth in revenue and net profit. The company's 2024 and 2025 EPS is expected to be 1.48 yuan and 1.30 yuan, respectively, and the BVPS will be 18.14 yuan and 18.75 yuan respectively. Based on the closing price of 13.08 yuan on September 23, the corresponding P/B will be 0.72 times and 0.70 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