Performance Overview: China Merchants Securities achieved revenue/net profit of 19.821 billion yuan/8.764 billion yuan in 2023, yoy +3.13%/+8.6%; weighted average ROE was 7.91%, +0.37 percentage points year-on-year. 23Q4 achieved net profit of 2.362 billion yuan in a single quarter, +31.84% year over year and +41.08% month on month. Performance improved significantly from month to month. In 2023, net revenue from corporate brokerage, investment banking, asset management, credit, and proprietary operations accounted for 35.2%, 8.3%, 4.5%, 9.2%, and 42.8% of revenue, respectively.
(1) Net revenue from brokerage business declined yoy -14.2% with the market to 5,531 billion yuan. By the end of 2023, the number of normal trading customers of the company reached 17.76 million, +8.03%; managed assets were 3.72 trillion yuan, +1.64% year over year; the stock trading volume (bilateral) in the Shanghai, Shenzhen and Beijing markets was 25.18 trillion yuan, and the market share continued to increase to 5.23%. (2) Investment banking revenue is under pressure in the short term. In 2023, the company achieved net investment banking revenue of 1.32 billion yuan, yoy -6.5%, which is expected to be affected by the phased tightening of the IPO. 1) In 2023, the company's A-share underwriting scale was 20.08 billion yuan, or -50.7%, ranking 9th in the industry, with an IPO of 7.051 billion yuan, or -30.4% year-on-year. By the end of 2023, the number of the company's A-share IPOs under review was 27 (including those that have passed the meeting to be issued and those that have not been registered with the Securities Regulatory Commission), ranking 9th in the industry. 2) The amount of the company's domestic lead underwriting bonds in 2023 was RMB 325.806 billion, +18.5% over the same period last year.
Net revenue from asset management business was 713 million yuan, YOY -14%. By the end of 2023, the total asset management scale of China Merchants Asset Management reached 294.854 billion yuan, compared with -7% at the end of the previous year, mainly due to the pooled asset management plan yoy -17% to 115.196 billion yuan. The revenue of Bosch Fund/China Merchants Fund was 4,588/5.294 billion yuan respectively, and net profit was 1,524/1,753 billion yuan respectively. The total revenue contribution was 23%, and the total net profit contribution was 18%.
Proprietary business has driven performance growth, and the scale of financial assets has expanded dramatically. In 2023, the company's net revenue was 6.73 billion yuan, yoy +31.6%. By the end of 2023, the company's financial assets were 367.925 billion yuan, +21% year-on-year.
Investment advice: We predict that the company's net profit for 24-26 will be 94.36/100.42/10.946 billion yuan, YOY +7.67%/+6.42%/+9%, maintaining the “buy” rating.
Risk warning: policy risk, market fluctuation, operating and business risk.