Nanhua Futures(SH:603093) Huachuang Securities·2024-08-17 15:37Investment Rating - The report maintains a "Recommendation" rating for Nanhua Futures with a target price of 13.5 CNY, while the current price is 9.01 CNY [1]. Core Views - The high interest rate environment has led to strong performance in overseas business, with a significant increase in net interest income from foreign operations [1]. - The report highlights a decrease in total revenue by 16.1% year-on-year, but a 13.7% increase in net revenue calculated on a net basis [1]. - The company achieved a net profit of 2.3 billion CNY in the first half of 2024, reflecting a year-on-year increase of 36.7% [1]. Financial Performance Summary - Total revenue for H1 2024 was 26.4 billion CNY, with a net profit of 2.3 billion CNY [1]. - Q2 2024 saw total revenue of 16.5 billion CNY, a year-on-year decrease of 6.6% but a quarter-on-quarter increase of 65.9% [1]. - The breakdown of revenue sources for H1 2024 includes net interest income of 3.5 billion CNY, net commission income of 2.7 billion CNY, and other business income of 0.2 billion CNY [1]. Overseas Business Performance - The overseas net interest income reached 2.56 billion CNY in H1 2024, marking a year-on-year increase of 30% [1]. - The company obtained clearing membership from the Intercontinental Exchange (ICE-US), enhancing its overseas clearing license framework [1]. - The high interest rate environment, particularly after the Federal Reserve's rate hike, has positively impacted overseas net interest income [1]. Domestic Business Performance - Domestic commission income decreased by 19.9% year-on-year, with futures brokerage commission income down by 20.7% [1]. - The domestic net interest income increased by 34.8% year-on-year, amounting to 0.95 billion CNY [1]. - Risk management business saw a decline in basis trade volume by 24% year-on-year [1]. Earnings Forecast - The report revises earnings per share (EPS) forecasts for 2024, 2025, and 2026 to 0.90 CNY, 1.10 CNY, and 1.17 CNY respectively [1]. - The report also projects book value per share (BPS) of 6.89 CNY, 7.89 CNY, and 8.95 CNY for the same years [1]. - The return on equity (ROE) is expected to be 13.1%, 13.9%, and 13.0% for 2024, 2025, and 2026 respectively [1].