Core Viewpoint - The Chinese futures market is experiencing significant growth and transformation in 2025, marked by a historic increase in funding and client equity, innovative business models, and a shift towards high-quality development [1][3]. Funding Growth - In 2025, the total funding in the futures market surpassed 2 trillion yuan, with client equity also exceeding this milestone, reflecting a growth of over 30% compared to the end of 2024 [3]. - The trading volume reached 8.117 billion contracts and a turnover of 67.545 trillion yuan, with year-on-year increases of 14.74% and 20.19% respectively [3]. Product Expansion - The futures market has expanded its product offerings, with a total of 164 futures and options listed by the end of November 2025, including 18 new products such as aluminum alloy and pure benzene [5]. - New products have filled gaps in risk management tools for key raw materials, enhancing the market's service to the real economy [4][5]. Value Creation and Competition - The concept of "anti-involution" has emerged as a key theme, promoting healthy competition focused on value creation rather than price wars [7]. - New regulations have been introduced to curb unfair competition practices, fostering a shift towards service quality and professional value [7]. Industry Integration - The futures industry is increasingly integrating with the real economy, with a record number of companies announcing hedging strategies, indicating a shift from basic hedging to more complex risk management approaches [9][10]. - The demand for price risk management has risen significantly, leading to a transformation in the role of futures companies from mere brokers to comprehensive risk management service providers [10]. Rise of Proprietary and Asset Management - The overall profit of the futures industry increased, with proprietary trading and asset management becoming significant growth drivers, contributing to a net profit of 10.316 billion yuan, a 17.67% increase year-on-year [12][13]. - The scale of private asset management products reached 375.548 billion yuan, marking a 19.48% growth compared to the end of 2024 [12]. Internationalization - The futures market is advancing in internationalization, with the number of futures and options available to qualified foreign institutional investors expanding to 107 [16]. - The market has seen a 14% increase in effective clients, with notable growth in foreign clients, indicating a deeper integration into the global financial system [16]. Technological Empowerment - The industry is embracing advanced technologies such as big data and AI, enhancing its core competitiveness and service capabilities [18][19]. - AI is transforming trading execution and client services, making professional services more accessible and efficient [19]. Capital Increase Wave - A significant capital increase wave has occurred in the futures industry, with major brokerages leading the way, reflecting a restructuring of the industry landscape [21][22]. - The capital advantages of leading firms have been further enhanced, with top companies accounting for over 60% of net capital in the industry [22]. Market Differentiation - The futures market in 2025 has shown significant differentiation, with stark contrasts in performance across various commodity sectors, influenced by geopolitical factors and market dynamics [24]. - The performance of precious metals has been particularly strong, while traditional sectors like black commodities and agriculture have lagged, highlighting the need for refined risk management strategies [24]. Regulatory Improvements - The regulatory framework for the futures industry has been strengthened with new rules addressing various aspects such as internet marketing and risk management, promoting a more standardized development [26][27]. - Enhanced regulations aim to facilitate quality development in the industry, ensuring a safer and more effective market environment [27].

Investment Rating - The report maintains an "Accumulate" rating with a target price of 28.54 CNY [6][13]. Core Insights - In H1 2025, the company achieved revenue and net profit of 1.047 billion CNY and 228 million CNY, respectively, representing year-on-year increases of 4.49% and 66.49% [13]. - The company's investment business net income increased by 69.72% to 213 million CNY, contributing 73.54% to the adjusted revenue growth [13]. - The asset management business saw a significant increase in fee income, up 278.80% to 42 million CNY, driven by growth in asset management scale [13]. - The company is expected to benefit from the expansion of the futures market under the internationalization of the RMB, leveraging its comprehensive service capabilities in risk management and asset management [13]. Financial Summary - Revenue is projected to grow from 926 million CNY in 2023 to 1.913 billion CNY by 2027, with a peak in 2024 at 1.810 billion CNY [4][14]. - Net profit attributable to shareholders is expected to rise from 244 million CNY in 2023 to 412 million CNY in 2027, with a notable increase of 56.9% in 2024 [4][14]. - Earnings per share (EPS) is forecasted to increase from 0.55 CNY in 2023 to 0.93 CNY in 2027 [4][14]. - The return on equity (ROE) is expected to remain strong, peaking at 13.0% in 2024 before gradually declining to 10.7% by 2027 [4][14].