2024 Mid-Year Report Overview: In the first half of 2024, Caitong Securities achieved operating income of 3.026 billion yuan, -12.94%; realized net profit to mother of 0.927 billion yuan, -10.57% year over year; basic earnings per share of 0.20 yuan, -9.09% year over year; weighted average return on net assets of 2.64%, -0.45 percentage points year over year. There will be no distribution or increase for the 2024 semi-year.

Comment: 1.2024H The share of the company's brokerage, asset management, interest, and other revenue increased, while the share of net income and investment income (including changes in fair value) from the investment banking business declined. 2. The institutional brokerage business led to an increase in the company's share base market share and net revenue share ratio. The net revenue from consolidated brokerage services was -1.38% compared to the same period. 3. The scale of equity financing declined significantly, and the scale of debt financing declined at the same time. Net income from handling fees from the consolidated investment banking business was -11.91% year-on-year. 4. The advantages of brokerage asset management business are relatively stable. Net income from handling fees of consolidated caliber asset management business was +17.86% compared to the same period last year. 5. Equity self-employment should be a drag. Self-employment with fixed income achieved good investment results, and consolidated investment income (including changes in fair value) was -32.40% compared to the same period. 6. The scale of the two loans declined slightly with the market, and continued to reduce the size of stock pledges. Net income from consolidated interest was -0.39% year-on-year.

Investment advice: The company's institutional brokerage business, represented by high-speed trading and algorithmic trading, grew rapidly during the reporting period, driving an increase in the overall share base market share and net income market share, and net income achieved reverse market growth; the advantages of brokerage asset management business were stable, and revenue and net profit continued to grow; fixed income self-operation achieved good investment results, but it is expected that equity ownership and derivatives business will cause a certain drag on the company's performance. The company's 2024 and 2025 EPS is expected to be 0.46 yuan and 0.50 yuan, respectively, and the BVPS will be 7.62 yuan and 7.91 yuan respectively. Based on the closing price of 9.59 yuan on October 8, the corresponding P/B will be 1.26 times and 1.21 times, respectively, maintaining an “increase in holdings” investment rating.

Risk warning: 1. The degree of improvement in the company's performance due to fluctuations in the fixed income market falls short of expectations; 2. Risk of short-term stock price fluctuations; 3. The policy effects of capital market reform fall short of expectations