Nanhua Futures (603093) Q2 2024 earnings summary

Executive summary

• H1 2024 net profit attributable to shareholders rose 36.73% YoY to RMB 230.18m, while reported revenue fell 16.14% to RMB 2.638bn.

• Adjusted for non-recurring items, net profit was RMB 228.59m, up 41.87% YoY; basic EPS was RMB 0.38 versus RMB 0.28.

• Revenue growth and profitability diverged amid weaker investment gains from risk-management trading and rising interest income as customer balances increased.

Financial highlights

• Revenue RMB 2.638bn, down 16.14% YoY; net profit attributable to shareholders RMB 230.18m, up 36.73%; adjusted net profit RMB 228.59m, up 41.87%.

• Operating profit was RMB 270.04m versus RMB 195.34m; net income was RMB 230.48m versus RMB 168.31m.

• Net interest income increased 31.97% YoY to RMB 350.79m, led by customer margin interest income growth of 30.45%.

• Investment results swung to a RMB 73.56m loss from RMB 137.68m income; fair-value gains were RMB 86.11m versus a RMB 108.85m loss.

• Operating cash flow rose 51.80% YoY to RMB 2.553bn; investing cash flow was negative RMB 637.93m and financing cash flow negative RMB 167.85m.

Outlook and guidance

• Priorities include strengthening integrated domestic and overseas operations, improving service to the real economy, managing business risks and expanding coordinated, differentiated services.

• Brokerage activity faced pressure from industry policy adjustments and falling policy rates; efforts focus on institutional and industrial clients, service capabilities and client development.

• H2 plans include continued “insurance + futures” support for agriculture, education and consumption assistance, and futures-risk training for agricultural businesses.