Incidents:
Guolian Securities released its 2023 annual report. In 2023, we achieved revenue of 2.96 billion yuan, a year-on-year increase of 12.7%, net profit of 670 million yuan, a year-on-year decrease of 12.5%. The weighted average ROE was 3.89%, a year-on-year decrease of 0.73 pct. The company's dividend rate was 59.9%, and the DPS was 0.142 yuan.
Core views:
It also showed that under the impetus, the revenue and scale of the asset management business increased in tandem. Net revenue from asset management operations was 443 million yuan, an increase of 128.54% over the previous year, mainly due to the completion of the merger with the League of Nations Fund. The asset management scale was 117.293 billion yuan, an increase of 14.94% over the previous year. The asset management scale of the League of Nations Fund was 148.8 billion yuan, and the non-commodity AUM was 101.6 billion yuan, ranking 44th in the industry.
Investment banks' revenue increased against the market, and mergers and acquisitions are expected to increase the scale of business. Net revenue from the investment banking business was 489 million yuan, an increase of 2.47% over the previous year. The total volume of IPOs for the year was 2,368 billion yuan, down 1.33% year on year, and the refinancing scale was 1,588 billion yuan, down 43.29% year on year; bond underwriting amount was 51,581 billion yuan, up 30.94% year on year. In the future, if the company and Minsheng Securities complete integration, the scale of the investment banking business is expected to increase significantly.
Wealth management is growing steadily. The transformation of the company's wealth management progressed steadily. In 2023, the number of fund investment customers signed up was 3020,000, an increase of 24.93% over the previous year, the number of financial products held was 19.330 billion yuan, an increase of 8.2% over the previous year, and the authorized fund investment assets of 6.594 billion yuan remained the same.
Profit forecast and investment rating: The company's endogenous growth is driven by epitaxial mergers and acquisitions. I am optimistic that epitaxial mergers and acquisitions will improve the company's overall strength, and future development space can be expected. The company's net profit for 2024-2026 is estimated to be 697 million yuan, 805 million yuan, and 1,015 million yuan, corresponding PB of 1.72, 1.57, and 1.33 times. First coverage, giving a “buy” rating.
Risk warning:
Capital market reform risk; capital market fluctuation risk; risk of performance falling short of expectations; risk of macroeconomic uncertainty; risk of uncontrollable risks such as black swans; risk of statistical bias.