[Event] Everbright Securities released its semi-annual report for 2023: the first half of 2023 achieved operating income of 6.18 billion yuan, +15.0%; net profit of 2.39 billion yuan, +13.5% year-on-year; corresponding EPS of 0.48 yuan, ROE of 3.9%. Corporate brokerage/investment bank/asset management/interest/self-operating income respectively accounted for 24%/10%/8%/14%/35% of operating income. The positive increase in the company's net profit to parent was mainly due to a sharp increase in net investment income (including fair value). In the second quarter, revenue was 3.43 billion yuan, +7.4% year-on-year.
Net profit for the return mother was 1.43 billion yuan, -0.5% year-on-year.
Strengthen the construction of a wealth management customer service ecosystem, and accelerate the transformation of wealth management. Brokerage revenue for the first half of 2023 was 1.48 billion yuan, -13.1% year-on-year, accounting for 24.0% of revenue. The average daily stock trading volume of the entire market was 1027.1 billion yuan, -2.0% year-on-year.
In the first half of 2023, the company's revenue from brokerage financial products was 179 million yuan, -7.9% year-on-year, accounting for 12.11% of brokerage business revenue, and 20.3 billion yuan, +97% of brokerage financial products. The company's financial balance was 34.8 billion yuan, +1.8% year-on-year, with a market share of 2.2%.
The company's retail business adheres to the “wealth+institution+collaboration” development strategy. By the end of June 2023, the company had a total of 5.66 million customers, an increase of 5% over the end of the previous year; total customer assets were 1.3 trillion yuan, an increase of 2% over the end of the previous year.
The investment banking business serves the real economy and focuses on emerging strategic industries. Investment banking business revenue for the first half of 2023 was 6.1 billion yuan, -24.0% year on year. In the first half of 2023, equity business underwriting scale was -68.1% year on year, and bond business underwriting scale was -16.8%. In the first half of 2023, shareholder underwriting scale was 5.05 billion yuan, ranking 26th; including 6 IPOs with a capital raising scale of 4.3 billion yuan; 2 refinancing companies, with an underwriting scale of 800 million yuan. The underwriting scale of bond owners in the first half of 2023 was 175.5 billion yuan, ranking 7th; of these, the underwriting scale of local government bonds, financial bonds, and corporate bonds was 78.6 billion yuan, 32.4 billion yuan, and 22.4 billion yuan respectively. There are 6 IPO reserve projects, ranking 25th, including 5 main boards and 1 GEM in 2 cities. The company's equity financing business fulfills the responsibilities of central enterprises, serves the real economy, and actively expands “specialized and new” enterprises; debt financing has promoted the underwriting and issuance of a number of specialty bonds represented by green bonds, rural revitalization bonds, and science and technology innovation bonds.
The asset management business insists on being customer-centric and enhances active management capabilities. Asset management business revenue for the first half of 2023 was 480 million yuan, -27.8% year-on-year. The management scale of Guang Securities Asset Management was 305.5 billion yuan, compared to -16.4% at the beginning of the year. In the first half of 2023, Guang Securities Asset Management steadily promoted the public offering license application process, and the application materials for the qualification of a public fund manager were officially accepted by the Securities Regulatory Commission.
Both equity and fixed income performance improved significantly year over year in the first half of 2023. Investment income (including fair value) for the first half of 2023 was $2.15 billion, +271.5% year on year; investment income (including fair value) for the second quarter was 1.21 billion yuan, +81.8% year on year. Both equity and fixed income performance improved significantly year-on-year in the first half of 2023. On the equity side, it mainly benefited from effective control of directional exposure and the good performance of low-wave dividend assets laid out earlier; on the fixed income side, optimized the holding structure under the premise of strict risk control. As of the end of June, the company's holdings included general communications bonds, interest rate bonds, etc. Credit bonds were mainly bonds issued by high-level, high-quality entities, and credit risk was manageable.
Investment suggestions: We expect the company's net profit per share for 2023-2025E to be 0.97, 1.12, and 1.31 yuan (the original forecast was 0.74, 0.87, and 1.02 yuan), and the net assets per share are 14.66, 15.77, and 17.06 yuan respectively (the original forecast was 14.44, 15.29, and 16.30 yuan). We gave it 1.3xP/B in 2023 (unchanged), corresponding to a target price of 19.06 yuan (original target price of 18.77 yuan, +2%), maintaining the “superior to market” rating.
Risk warning: Trading volume continues to decline, and investment returns continue to decline due to increased volatility in the equity market.