Overview of the 2024 Mid-Year Report: China Galaxy achieved operating income of 17.086 billion yuan, -1.88% year on year; realized net profit of 4.388 billion yuan, -11.16% year over year; basic earnings per share of 0.35 yuan, -22.22% year on year; and weighted average return on net assets of 3.63%, -1.47 percentage points year on year. It is planned to pay 0.84 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) increased, the share of net revenue from asset management business remained basically the same, and the share of brokerage, investment banking, interest, and other income declined. 2. The brokerage business was under slight pressure with the market, and the net revenue from consolidated brokerage fees was -12.97% compared to the same period last year. 3. The scale of debt financing continued to grow rapidly. Net fee revenue from consolidated investment banking operations was +42.25% year-on-year, achieving reverse market growth under a low base. 4. The scale of brokerage asset management showed a steady recovery, and net revenue from handling fees for consolidated asset management operations was +2.24% year-on-year. 5. Fixed-income investment comprehensively lays out innovative businesses driven by customer demand, and consolidated investment income (including changes in fair value) was +5.52% year-on-year. 6. The scale of the two loans declined slightly, and the scale of collateral decreased slightly. Net income from consolidated interest was -16.60% compared to the same period last year. 7. Various rankings are progressing steadily, and international business revenue is -1.08% year-on-year.

Investment advice: Although the company's brokerage business fluctuated during the reporting period, it remained industry-leading; the scale of debt financing continued to grow rapidly for many years, and the equity financing business strengthened professional capacity building and project reserves; equity self-management actively developed medium- and low-risk investment business, fixed income self-operation comprehensively laid out innovative businesses driven by customer demand, and investment income (including changes in fair value) increased steadily over the same period; international business achieved differentiated competition, and various rankings progressed steadily. As a brokerage firm of Central Huijin Holdings, the company's operations focus on serving the country's major strategies and the real economy. In the future, it is expected to continue to benefit from the policy orientation of supporting advantages and limiting disadvantages and building first-class investment banks. The company's 2024 and 2025 EPS is expected to be 0.56 yuan and 0.60 yuan, respectively, and the BVPS will be 9.62 yuan and 10.08 yuan respectively. Based on the closing price of 12.04 yuan on September 24, the corresponding P/B will be 1.25 times and 1.19 times, respectively, maintaining an “increase in holdings” investment rating.

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