Event: Yongan Futures released its third quarterly report in 2023. 9M23 realized a net profit of 560 million / yoy+18%,3Q and a quarterly profit of 150 million / yoy-6%/qoq-28%. 9M23 revenue 18.79 billion / yoy-34%,3Q single quarter revenue 6.83 billion / yoy-25%. The weighted average ROE of 9M23 is 4.6%/yoy+0.58pct.
Higher interest income drives performance growth. According to the net method (net revenue = revenue-other business costs), 9M23 net revenue 1.51 billion / yoy-23%, income structure, 9M23 realized net fee income, net interest income, investment income + fair value change profit and loss, other business net income 5.8,4.8,2.4, 190 million yuan, respectively-7%, + 13%,-24%,-69%, respectively. The proportion of net revenue is 38%, 32%, 16% and 12%, respectively.
Overseas interest rate hikes promote the growth of overseas interest income, and fee income is under pressure. 9M23 merger caliber customer rights and interests of 41.2 billion yuan / yoy-15%/qoq-12%, decreased compared with the same period last year, but the company's interest income is still + 22% year-on-year / single-quarter year-on-year + 8%, mainly due to the increase in overseas business interest income in the context of overseas interest rate increases. In terms of brokerage business, the turnover and turnover of 3Q23 in the whole market are 2.5 billion yuan and 163 trillion yuan respectively, which are + 32% and + 14% respectively compared with the same period last year. The company's fee income in the first three quarters is-7% year-on-year and + 14% in a single quarter, which is basically in line with the growth rate of the industry.
Risk management business remained stable on a month-on-month basis. 9M23's other business income (mainly from commodity trading revenue generated by risk management business) 17.5 billion / yoy-36%, is expected to be mainly due to the overall slowdown in the futures industry risk management business, of which 6.4 billion yuan / yoy-26%/qoq+5%, remained stable in a single quarter. The company increased its business volume of PTA, methanol, fuel oil and other varieties in the first half of the year, registered the first batch of standard warehouse receipts for industrial silicon futures, broadened the variety coverage of market-making business, and added a number of market-making qualifications such as industrial silicon futures, polyvinyl chloride and polypropylene futures.
Investment analysis opinion: as the leading futures company, the company is expected to continue to promote the active capital market policy and improve the demand for enterprise risk management, and is still expected to achieve steady expansion and maintain the "recommended" rating in the medium to long term. It is estimated that the net profit of 2023-2025E Yongan futures will be 840 million yuan, 950 million yuan and 1.03 billion yuan respectively, which is + 25%, + 13% and + 9% compared with the same period last year. The closing price of 10X 26 corresponds to company 23-25e dynamic PB 1.83x, 1.76x, 1.69x, dynamic PE 27x, 24x, 22x respectively.
Risk hints: economic downward pressure is increasing; risk management business is not as expected; industry commission rate continues to decline.