Nanhua Futures(SH:603093) Huachuang Securities·2024-10-21 13:38Investment Rating - The report maintains a "Recommendation" rating for Nanhua Futures, with a target price of 16.1 CNY, while the current price is 12.75 CNY [2]. Core Views - The performance of Nanhua Futures in the first three quarters of 2024 is in line with expectations, supported by growth in overseas business. The total operating revenue for Q1 to Q3 is 4.46 billion CNY, a year-on-year decrease of 8%, while net profit attributable to the parent company is 360 million CNY, an increase of 20.1% year-on-year [2]. - The interest income is a key driver of performance, with net interest income for Q1 to Q3 reaching 520 million CNY, up 25% year-on-year. The company expects the high interest rate environment to continue supporting net interest income growth [2]. - The decline in commission income may be attributed to changes in fee reduction policies, despite an increase in trading volume in the futures market [2]. Summary by Sections Financial Performance - For Q1 to Q3 2024, total operating revenue is 4.46 billion CNY, down 8% year-on-year, while net profit is 360 million CNY, up 20.1% year-on-year. In Q3 alone, total operating revenue is 1.82 billion CNY, up 7.1% year-on-year and 10.8% quarter-on-quarter [2]. - The breakdown of net interest income, commission income, proprietary trading income, and other business income shows net interest income at 520 million CNY, commission income at 400 million CNY, proprietary trading income at 10 million CNY, and other business income at 40 million CNY for Q1 to Q3 [2]. Market Environment - The Federal Reserve has initiated a rate-cutting cycle, with expectations of maintaining high interest rates throughout the year. As of mid-2024, the overseas client equity scale is 13.4 billion HKD, a 63.5% increase from the end of 2021 [2]. - The report highlights that the domestic business is expected to benefit from favorable policies aimed at enhancing the futures market's service to the real economy [2]. Earnings Forecast - The earnings per share (EPS) estimates for 2024, 2025, and 2026 are adjusted to 0.77 CNY, 0.95 CNY, and 0.99 CNY respectively. The price-to-earnings (PE) ratios corresponding to the current stock price are 16.48, 13.46, and 12.87 times for the respective years [2][3].