Event description
According to the company's quarterly report for the first three quarters of 2023, the operating income in the first three quarters of 2023 was 4.848 billion yuan,-6.94% compared with the same period last year. The operating income under the net method was 930 million yuan, an increase of 38.65% over the same period last year; the net profit was 298 million yuan, + 126.21% over the same period last year, and the weighted average ROE8.56%, increased 4.35pct over the same period last year.
Event comment
The main business grew steadily. 1) in the first three quarters of 2023: the company's net fee and commission income, net interest income, net investment business income (net investment income-joint venture + fair value change + net exposure hedge income), and other business income (mainly risk management business) were 4.41,4.15,0.05 and 62 million yuan, respectively, compared with the same period last year. + 4.15%, + 94.88%,-91.01%, + 196.59% respectively. 2) single third quarter:
The net income of handling fee and commission, net interest, net income of investment business and other business income were 1.55,1.48,0.28 and 21 million yuan respectively, which were + 9.85%, + 79.69% and-3.46% respectively over the same period last year.
No matter from a single quarter or cumulative point of view, the performance of the three main businesses of brokerage, interest and risk management all achieved positive growth.
The performance of the company is outstanding in the environment of high interest rates abroad. The company's overseas business is carried out by Henghua International Financial Holdings, a wholly-owned subsidiary of the consolidated table, and the company relies on the leading clearing service system and business layout to give full play to the competitive advantages of overseas financial services. 1) in the first three quarters of 2023, the net income of overseas interest reached 307 million yuan (+ 582.12% compared with the same period last year), accounting for 73.97% of the total net interest income. 2) the net income of overseas fees and commissions in the first three quarters of 2023 was 131 million yuan, an increase of 35.27% over the same period last year. Combined with the data of the China News and the three Quarterly reports, we believe that the substantial increase in overseas business is attributed to the increase in margin and trading volume driven by the increase in the rights and interests of overseas customers, superimposed by the Fed's continued interest rate hike center to achieve both volume and price increases in the business.
The performance of domestic business is divided. The company's domestic business performance was slightly divided in the first three quarters of 2023.
1) the market futures trading volume (unilateral) was 425.29 trillion yuan, an increase of 6.13% over the same period last year. The parent company's brokerage business realized a net income of 296 million yuan in handling fees and commissions, an increase of 4.73% over the same period last year, which is basically in line with the market trading volume. 2) the net interest income of the parent company in the first three quarters was 168 million yuan, down 35.71% from the same period last year, mainly due to the lower interest rate on margin deposits.
Investment suggestion
The company is the first private listed futures company, the controlling shareholder Hengdian Group is strong, the overseas business has completed four major urban layouts, and the global clearing system covers domestic and overseas services that span the three continents of Asia, the United States and Europe and the 24-hour trading time zone. in the complex and changeable international situation, overseas Chinese institutions are more inclined to settle their business to local futures companies, which has great potential for growth in the future, and overseas business will become an important engine. From 2023 to 2025, the company is expected to achieve operating income of 6.561 billion yuan, 7.317 billion yuan and 8.047 billion yuan, respectively, a decrease of 3.83%, an increase of 11.52% and an increase of 9.98%. The net profit of the parent is 403 million yuan, 485 million yuan and 589 million yuan, an increase of 63.67%, 20.40% and 21.56%, respectively.
Risk hint
The financial market fluctuated sharply, the business advance was not as expected, and the company had greater risk events.