⑤利息净收入11.2 亿元，同比-47.4%，其中两融利息收入34 亿元，同比-18%，买入返售利息收入13.3 亿元，同比+55%。Core views:
The company disclosed its 2024 mid-year report, with steady performance and a recovery in leverage. Revenue for the first half of the year was 30.183 billion yuan, -4.18% YoY; net profit to mother was 10.57 billion yuan, -6.51% YoY. Net assets of 284.5 billion yuan, +8.23% year over year; leverage ratio excluding agent payments increased from 4.27 times at the end of 2023 to 4.43 times 2024H1. The management expense ratio was 44.7%, down 0.3 pct year over year.
The business developed in a balanced manner, and the share of heavy assets increased to 48%. According to the company's 2024 semi-annual report data, ① net investment income (including fair value) was 11.9 billion yuan, +0.4% year over year; ② investment banking business revenue was 1.735 billion yuan, or -54.6% year over year. ③ Brokerage business was 4.88 billion yuan, -7.8% year-on-year, including consignment revenue of 0.709 billion yuan, -11% year-on-year. ④ Asset management (including funds) of 4.914 billion yuan, -1.1% YoY.
⑤ Net interest income was 1.12 billion yuan, or -47.4%, of which interest income from both loans was 3.4 billion yuan, -18% YoY, and interest income from purchases and resales was 1.33 billion yuan, +55% YoY.
The high-quality development of asset-light pan-wealth management, leading investment banking effects, and deepening internationalization. In the first half of 2024, CITIC Asset Management revenue was -4% year over year, scale was 1456.4 billion yuan, -3% year over year, private equity asset management market share was 13.23%, down 1.5 pct year on year; Huaxia Fund's size was 2158.5 billion yuan, +19.8% year over year.
In terms of wealth management, the asset scale of custodian clients achieved positive growth compared to the end of the year, expanding the radius and content of international services, and growing steadily in the sales scale and revenue of overseas wealth management products.
In terms of heavy assets, the total income from proprietary investment in the first half of 2024 was 8.53 billion yuan, -10% year-on-year; investment in other equity instruments increased sharply from 9.5 billion yuan at the beginning of the year to 67 billion yuan. The company vigorously develops non-directional customer demand business, and maintains the highest sales scale of interest rate products in the industry. Overseas equity derivatives provide a global one-stop investment transaction service across time zones, and guarantees payable to customers reached 137.8 billion yuan, +0.5% over the same period; first-level subsidiaries changed profits to losses due to market fluctuations.
Profit forecasting and investment advice. The policy orientation and competitive advantages of leading brokerage firms to grow bigger and stronger are becoming more and more prominent, and the company is expected to continue to benefit from the further rise of institutionalization and internationalization. The company's net assets are expected to be 19.23 yuan and 20.58 yuan per share in 2023-2024. Referring to the 1.0X-2.2XPB valuation center in the past five years, the reasonable value of A shares is 23.08 yuan/share; considering the A/H premium, the reasonable value of H shares is HK$14 per share, maintaining the “buy” rating of AH shares.
(HKD/CNY=0.91)
Risk warning: Increased market competition and increased volatility have led to performance falling short of expectations, declining commission rates, etc.
