Incident: CITIC Securities disclosed the results of the 2024 three-quarter report. 24Q1-Q3 CITIC Securities achieved 46.142 billion yuan, an increase of 0.73% over the previous year; net profit to mother was 16.799 billion yuan, an increase of 2.35% over the previous year. The company's weighted average ROE was 6.3%. As of 24Q3, net income from corporate brokerage, interest, proprietary management, investment banking, and asset management (excluding other income) accounted for 18%/2%/54%/7%/19%, respectively. The company's leverage level (excluding customer assets) is 4.73X, +0.38X compared to the beginning of the year. Looking at a single quarter, 2024Q3 achieved revenue of 15.958 billion yuan, -2.86% month-on-month, and +11.54% year-on-year; Q3 realized net profit of 6.229 billion yuan, +11.01% month-on-month, and +21.94% year-on-year.

Q3 High income growth from proprietary investments drove impressive profit performance, and financial investment assets expanded significantly. 1) Self-employed:

24Q1-Q3's proprietary investment income was 21.664 billion yuan, +37.3% year over year, and Q3 single quarter investment income was 9.933 billion yuan, +134% year over year. It is expected to be due to a sharp increase in the fair value of financial instruments due to the recovery in the Q3 equity market. As of 24Q3, the company's transactional financial assets were 760.8 billion, +22% from the beginning of the year, and 67.3 billion yuan invested in other equity instruments, +607% from the beginning of the year, or due to the company's increase in high dividend and perpetual bond assets. 2) Credit: 24Q1-Q3's net interest income was 0.92 billion yuan, or -72% year-on-year. The net interest income turned negative to -0.197 billion yuan in the Q3 quarter, which is expected to be caused by increased interest expenses combined with sluggish market demand.

Asset management has shown resilience. Brokerage and investment banks have declined with the market, and are optimistic about the increase in performance due to subsequent market recovery. 1) Brokerage:

24Q1-Q3's net brokerage revenue was 7.15 billion yuan, -9% YoY; Q3 was 2.27 billion yuan in a single quarter, -11% YoY, which is basically consistent with changes in market turnover (the average daily share base transaction volume of the entire 24Q1-3 market -10% YoY). 2) Investment banking: 24Q1-Q3's net income from investment banking business was 2.82 billion yuan, -46% year over year; Q3 was 1.08 billion yuan in a single quarter, -24% year over year, +25% month over month. The company's equity and bond underwriting industry ranked first in the industry. 3) Asset management: The net revenue of 24Q1-Q3's asset management business was 7.48 billion yuan, +1% year over year; 2.56 billion yuan in Q3, +5.6% year over year, which is expected to benefit from the company's continued deepening of active asset management transformation and the growth in the performance of its subsidiary Huaxia Fund.

Investment advice: The company benefits from supply-side reforms in the industry. The leading advantage will not change, and it is optimistic about market recovery and subsequent performance growth. Net profit is expected to be +3% year-on-year to 20.4 billion yuan in 2012, maintaining a “buy” rating.

Risk warning: policy risk, large market fluctuations, operational and business risks.