Soochow Securities (601555) investor relations material

Executive summary

• Q3 revenue was RMB 1.224bn, down 57.01% YoY, and net income attributable to shareholders was RMB 287.6m, down 71.33%; 9M revenue and net income declined 4.11% and 7.72%, respectively.

• Q3 earnings pressure was attributed mainly to lower YoY investment income and fair-value gains; 9M operating cash flow was negative, while investment cash flow was positive.

Financial highlights

• Q3 total profit was RMB 376.2m, down 71.14% YoY; basic and diluted EPS were RMB 0.06, each down 70.00%.

• 9M total revenue was RMB 6.974bn, down 4.11% YoY; total profit was RMB 3.558bn, down 7.57%, and shareholder net income was RMB 2.708bn, down 7.72%.

• 9M net income excluding non-recurring items was RMB 2.708bn, down 7.41%; Q3 excluding non-recurring items was RMB 294.7m, down 70.63%, versus reported net income of RMB 287.6m.

• Total assets were RMB 213.209bn at Sep. 30, down 1.39% from year-end; shareholder equity was RMB 44.633bn, up 3.15%.

• Q3 weighted-average ROE was 0.65%, down 1.70 percentage points YoY; 9M ROE was 6.14%, down 0.79 percentage points.

Segment performance

• 9M net fee and commission income was RMB 3.615bn; brokerage contributed RMB 2.323bn, investment banking RMB 817.3m, and asset management RMB 169.1m.

• 9M net interest income was RMB 1.260bn, versus RMB 963.0m in the prior-year period; investment income was RMB 2.262bn, versus RMB 2.893bn.

• 9M fair-value changes were a loss of RMB 249.7m, compared with a gain of RMB 724.2m a year earlier; this was cited as a principal driver of Q3 revenue decline alongside lower investment income.