Core views:

According to the company's official website, on November 28, the company increased its H share holdings of Haitong Securities by a total of 4 million shares (0.12% of the total share capital of H shares) through centralized bidding in the secondary market. Before the change in equity, the company and its co-actors held 4.9% of Haitong Securities (H); after the change, the shareholding ratio increased to 5.02%. (All data in this article comes from the company's official website or company financial reports)? The company continues to buy leading brokerage firms and is expected to obtain board seats in the future. The long-term stock investment method is expected to increase investment returns while reducing fluctuations in profit statements. According to Wind, the company increased its holdings of Guotai Junan (H) shares by 0.16 billion on August 30, 2024, increasing its pre-holdings by 2.9% (as of the end of 2023), and 4.75% after increasing its holdings. Meanwhile, the company once again increased its holdings of Haitong Securities (H). Considering that Guotai Junan has announced that it will absorb and merge Haitong Securities, it is expected that the asset size will jump to number one in the industry. Therefore, by increasing its holdings of Haitong and Guojun shares, the company is expected to achieve equity law accounts and enjoy the business growth dividends of the securities industry's leading target.

The company has been trading frequently recently. On the one hand, it is dealing with the downward trend in long-term interest rates, aimed at mitigating the decline in net return on investment, and also achieving strategic collaboration. The company has been listed repeatedly this year, including Sinopharm shares, Shanghai Pharmaceuticals, Haitong Securities, etc. The main reason is: First, the long-term interest rate center is rapidly declining, and non-standard assets are gradually expiring, and the company's net return on investment declined markedly to 3.4% in 2023. Therefore, by increasing long-term stock investment, the company achieved a higher return on investment and relieved the pressure on asset-side allocation; secondly, on November 15, 2024, the company announced the listing of Sinopharm Co., Ltd. and Shanghai Pharmaceuticals. The company hopes to achieve strategic collaboration, further improve the strategic layout of medical care, and empower owners to build at the same time Second growth curve .

Profit forecast and investment advice: EPS is expected to be 5.2/6.8/7.5 yuan for 24-26. The EV method is used to give the company a reasonable valuation of 0.65XPEV (H shares 0.3X), corresponding to a reasonable value of 58.46 yuan/share (HK$28.92 for H shares), maintaining the “buy” rating of the company's A/H shares.

Risk warning: equity market fluctuations, declining interest rates, declining manpower.