华夏基金规模稳居行业前列，债券基金排名小幅提升。9M24 公司资管业务收入74.8 亿元，同比+1.1%。3Q24 公司资管业务收入25.7 亿元，同比/环比-0.9%/+0.1%。期末华夏基金非货/权益/债券基金规模分别为1.18 万亿/7532 亿/2782 亿元，较年初+44%/+51%/+34%，市占率分别为6.3%/10.1%/2.7%，位列行业第2/2/9 名，其中债券型基金较上年度提升2 名。我们看好随基金管理规模提升，后续基金管理费收入兑现。Incident: On 10/29, CITIC Securities disclosed its third quarter report. The results slightly exceeded expectations. The company's 9M24 revenue was 46.14 billion yuan, +0.7% YoY; net profit to mother was 16.8 billion yuan, +2.4% YoY. The company's 3Q24 revenue was 15.96 billion yuan, +11.5%/-2.9% year over year; net profit to mother was 6.23 billion yuan, +21.9%/+11.0% year over month. The weighted average ROE was 6.3%, +0.11pct compared to the same period last year.
Proprietary businesses showed strong results in terms of scale and return. 9M24's net income from proprietary investment was 21.94 billion yuan, +23.2% year-on-year.
The net income from 3Q24's own investment was 8.71 billion yuan, +63.0% year over year and +26.3% month over month. The size of the company's financial investment assets/transactional financial assets at the end of the period was 894.1/760.8 billion yuan respectively, +24.9%/+21.7% compared to the beginning of the year and +15.5%/+19.4% at the end of Q2. We estimate that 3Q24's self-operated business yield is 4.99%, compared to 2Q24 +0.77%.
The size of Huaxia Fund has been at the forefront of the industry, and the ranking of bond funds has improved slightly. 9M24's asset management business revenue was 7.48 billion yuan, +1.1% year-on-year. 3Q24's asset management business revenue was 2.57 billion yuan, -0.9%/+0.1% YoY. At the end of the period, Huaxia Fund's non-commodities/equity/bond fund size was 1.18 trillion/753.2 billion/278.2 billion yuan respectively, +44%/+51%/+34% compared to the beginning of the year, with a market share of 6.3%/10.1%/2.7% respectively, ranking 2/2/9th in the industry. Among them, bond funds increased by 2 places over the previous year. We are optimistic that as the scale of fund management increases, subsequent fund management fee revenue will be realized.
The brokerage business declined slightly month-on-month, mainly due to weakening trading activity in the third quarter. 9M24's brokerage revenue was 7.15 billion yuan, -8.7% YoY. 3Q24's brokerage revenue was 2.27 billion yuan, -10.6%/-6.7% YoY. The company's client capital at the end of the period was 306.1 billion yuan, +29.8% compared to the end of H1, showing that the company's brokerage business is resilient.
The investment sector's performance picked up month-on-month, and the market share ranked first. 9M24's investment banking revenue was 2.82 billion yuan, or -46.4% year-on-year.
In 3Q24, the company's investment banking revenue was 1.08 billion yuan, -24.4%/+25.2% year-on-year. 9M24's IPO/refinancing/bond underwriting scale was 7.25/29.6/1456.5 billion yuan respectively, -85.5%/-75.3%/+2.8% year-on-year, with a market share ratio of 15.9%/29.4%/14.6% respectively, all leading in the industry. Focus on the impact of subsequent regulatory policy changes on business.
The interest business was under month-on-month pressure, mainly due to a decrease in interest income from securities financing and an increase in interest expenses on sales and repurchase. At the end of the period, the size of the company's financed/purchased and resold financial assets was 113.41/40.78 billion yuan, respectively, -4.5%/-34.4% compared to the beginning of the year.
9M24's interest expenses were 13.83 billion yuan, +5.6% year over year. 3Q24 interest expenses amounted to 4.62 billion yuan, +3.0%/+6.2% yoy. The company's interest-bearing debt at the end of the period was 639.1 billion yuan, +26.2% year over year and +15.6% month over month. The company's operating leverage ratio is 4.98 times, +0.46 times higher than at the beginning of the year. Follow up on the impact of the schedule expansion process on interest expenses.
Lower management rates and credit impairment turned back to increase net profit. 9M24's management fee was 20.14 billion yuan, -4.6% YoY; 3Q24's management fee was 6.66 billion yuan, -3.9% YoY /-8.7% YoY. The 3Q24 company management rate was 45.8%, -6.9/-6.6pct yoy/month-on-month. At the end of the period, the company's credit impairment returned 0.477 billion yuan, and 3Q24 turned back 0.127 billion yuan.
Investment analysis opinion: The company's performance showed strong resilience. The core business remained industry-leading, and the overall performance slightly exceeded our expectations. Considering the company's self-operated investment expansion schedule in the first three quarters and the sharp recovery in market trading activity since the fourth quarter, we raised the company's 24-26E profit forecast. CITIC Securities 24-26E is expected to achieve net profit of 21.6, 22.9, and 24.1 billion yuan (the original forecast was 19.2, 19.7, 20.7 billion yuan), yoy +10%/+6%/+5%, maintaining CITIC Securities's purchase rating.
Risk warning: Capital market reforms fell short of expectations, and the effect of boosting liquidity in the A-share market fell short of expectations. The market declined sharply, and the growth in the size of the New Development Fund and fund size was weak. The company received the announcement of the “Administrative Penalty Decision” from the Securities Regulatory Commission in May 2024.
