In 2022, Zhejiang Dongfang's net profit after deduction of non-return mothers fell 35.11% year-on-year. In 2022, a fixed increase in the company was implemented, the capital increase of China-Korea Life Insurance and the integration of commercial and trade restructuring were completed, and the financial control reform continued to advance. Looking at the short to medium term, the trust business, which is the company's main source of profit, continues to be under pressure, and there is uncertainty about the growth of the futures business and investment income.

In the long run, the company's development still faces the challenge of cultivating core growth points.

Net profit after deducting non-return to the mother fell 35.11% year over year. The company's total revenue in 2022 was 19.884 billion yuan, an increase of 12.53% over the previous year; it achieved net profit of 947 million yuan, an increase of 44.28% over the previous year, mainly due to the consolidation of China-Korea Life Insurance's need to include the difference between fair value (based on capital increase prices) and long-term equity book value in investment income, and related matters increased investment income by a total of 562 million yuan; net profit after deducting non-Gimmo's net profit was 377 million yuan, down 35.11% from the previous year, mainly due to the impact of financial market fluctuations on financial assets and changes in the scope of consolidated statements due to commercial and trade business restructuring. After exclusion, performance remained stable with 2021; basic EPS and non-basic EPS after deducting from basic EPS in 2022 were 0.31 yuan/share and 0.12 yuan/share, respectively, up 34.78% and 40.00%, respectively; weighted average ROE and deducted unweighted average ROE were 6.84% and 2.72% respectively, up 1.96 percentage points and 1.60 percentage points from the previous year.

Operating profit declined for two consecutive years, and the decline in trust performance was the main reason. The total operating profit of each division of the company in 2022 was 1,115 million yuan, a year-on-year decrease of 15.03%; gross margin was 5.60%, a year-on-year decrease of 1.81 percentage points. Looking at the structure, trust companies, futures companies, and leasing companies contributed the main profits. In 2022, they contributed 410 million/358 million/198 million yuan/198 million yuan in gross profit respectively, accounting for 36.76%/32.10%/17.76% respectively.

Among them, the futures segment and leasing segment achieved revenue increases of 21.29% and 2.81 percent and profit increases of 11.51% and 4.32%, respectively. Trust companies' revenue and profits fell by 22.05% and 22.86% respectively during the same period, which was one of the main reasons for the decline in company performance.

The capital increase of China-Korea Life Insurance was completed, achieving joint control of China-Korea Life Insurance, and the book difference between fair value and long-term equity investment was included in investment income of 562 million yuan through a premium capital increase. In September 2022, China-Korea Life completed a capital increase. The registered capital was changed from 1.5 billion yuan to 3,01.2 billion yuan, and the company's investment in China-Korea Life increased from 750 million yuan to 1 billion yuan. The company's shareholding ratio in China-Korea Life was changed from 50% to 33.33%, and the largest shareholder along with Hanwha Insurance became the largest shareholder, achieving a consolidation. Since China-Korea Life Insurance was a premium capital increase, although the company only participated in a registered capital increase of 250.4 million yuan (investment amount of 303 million yuan), the difference between the book value and fair value of the long-term shares held by the company before the purchase date was 680 million yuan. Combined with the purchase of China-Korea Life Insurance's shares held recently, involving other comprehensive income - 118 million yuan was converted into investment income, resulting in a total investment income of 562 million yuan. Mid-Korea Life Insurance achieved full-year premiums of 1,745 billion yuan in 2022, an increase of 46.40% over the previous year. The original insurance premium income was 1,388 billion yuan, an increase of 43.03% over the previous year.

The fixed increase was successfully implemented, the restructuring of the trading company achieved results, and the listing of the subsidiary was accepted. In 2022, the company completed the fixed increase issuance process, issued 519 million shares, introduced capital of 2.35 billion yuan, and raised the registered capital to 3.415 billion yuan. At the same time, commercial restructuring has made some progress, and industry competition commitments have been implemented, laying the foundation for the sector's transformation and upgrading. The initial A-share listing of Shidanu Group, which participated 45% of the shares in 2022, has been accepted by the Ningbo Securities Regulatory Bureau and is currently in the IPO counseling stage.

Risk factors: Risk of adverse effects on performance due to large fluctuations in market conditions; risk of a sharp rise in credit risk; industry competition is becoming fierce and policies continue to tighten risks; the main business is not focused enough, and strategic transformation does not meet expectations.

Profit forecast: Considering that the company's main source of profit, the trust business continues to be under pressure, and there is some uncertainty about the growth of the futures business, we adjusted Zhejiang Oriental's 2023/24/25 company's total revenue forecast to 21,524 billion/23945 million/27.345 billion yuan (the original forecast was 2023/24's total operating income of 22.941 billion/23.426 billion yuan), up 8%/11%/14% year-on-year; Guimu's net profit forecast reached 585 million/628 million/662 million yuan (original forecast 2023/24 2023/24) (Annual net profit of 624 million/679 million yuan), a year-on-year increase of -38%/7%/5%. The company's 2023/24/25 net profit forecast corresponding to the EPS forecast was 0.17/0.18/0.19 yuan, respectively, and the corresponding BVPS forecast was 4.64/4.79/4.94 yuan respectively (the original forecast for 2023/24 EPS was 0.18/0.20 yuan and BVPS 4.94/5.14 yuan).