[Event] Yongan Futures announced full-year 2022 and 2023Q1 results: 1) 2022 revenue was 34.8 billion yuan, -8.1% year on year. Guimu's net profit was 670 million yuan, -48.5% year on year; corresponding to EPS of 0.46 yuan, ROE of 5.71%, -9.77 pct year on year. Guimu's net assets were +3.2% compared to the beginning of the year and +1.6% at the end of Q3. 2) 22Q4 quarterly revenue was 6.1 billion yuan, -41.5% year on year, and net profit of the mother was 200 million yuan, or -53.6% year on year. 3) 23Q1 revenue was 5.36 billion yuan, -30.4% year on year. Guimu's net profit was 210 million yuan, +539.3% year on year. The net worth of the mother of the mother was +1.6% compared to the beginning of the year.
2022 results: Various businesses are generally under pressure, and investment returns have declined significantly. The company's net profit is under pressure, mainly due to the decline in net revenue from processing fees and investment income. The two were -16.5% and -57.4%, respectively. By business sector, the operating profit of the futures brokerage/asset management/fund sales/risk management business was -55%, -6%, -22%, and -25%, respectively.
Futures brokerage business: Futures transaction amounts have declined, but customer interests have continued to grow. 1) Operating income was 930 million yuan, or -40.5% year on year, of which net income from processing fees was -17.1% year on year; net interest income was +40.4% year on year. 2) The company's domestic futures agent traded 200 million lots, with a turnover of 16.1 trillion yuan, or -13.2% year on year. At the end of the year, customer equity was 45.55 billion yuan, +5.0% compared to the beginning of the year.
Asset Management & Fund Sales Business: The sales scale of asset management products and funds declined. 1) Asset management business revenue was 25 million yuan, +29% year on year, of which net revenue from handling fees was -30.9% year on year. 2) The company's asset management products were 3.11 billion yuan, -3.7% compared to the beginning of the year. 3) The annual fund sales volume was 2.82 billion yuan, -76.6% year on year. Business revenue was $113 million, or -13.3% year on year.
Risk management business: The scale of base margin trading has shrunk slightly, and the OTC derivatives business has performed well. 1) Risk management business revenue was 33.6 billion yuan, -6.6% year on year. Yongan Capital achieved a profit of 270 million yuan throughout the year, accounting for 23.7% of the industry. 2) The OTC derivatives business added more than 130 billion yuan in nominal principal throughout the year, with a survival scale of 21.6 billion yuan, +18.3% over the same period last year.
2023Q1 performance: Increased investment income led to a sharp rebound in net profit. 1) The company's revenue scale was -30.4% compared to the same period last year, mainly due to the decline in the scale of base difference trading business. 2) Return to the mother's net profit was +539% compared to the same period last year, mainly due to increased profit and loss from changes in investment income and fair value. Q1 Investment income was 260 million yuan, compared to only 1.33 million yuan in the same period last year; income from changes in fair value decreased from -230 million yuan in the same period last year to -130 million yuan.
“Better than the market” rating. We believe that Yongan Futures, as a leader in the domestic futures industry, is expected to gain continuous growth momentum in the rapid development of the industry, and with the increase in industry concentration, the company's leading edge will also be further consolidated, and it should enjoy leading premiums. We gave the company 27x 2023E PE (originally 30x PE in 2022), and the corresponding target price was 21.04 yuan. The current stock price corresponds to 22x 2023E PE and was raised to the “better than the market” rating.
Risk warning: Commodity price fluctuations have exceeded expectations, and domestic futures market regulatory policies have changed.