The first two securities firms have released their annual reports, with one showing an increase and the other a decrease in net profit. Self-operated business has become the core driving force supporting performance.

Since the start of the market on "9.24", the capital market has been active in the fourth quarter of last year. However, not all securities firms have benefited from this, as the performance of securities firms still shows a differentiated trend. On January 14th, the performance of two securities firms was revealed. Minmetals Capital disclosed the unaudited financial report of Minmetals Securities for 2024, showing that Minmetals Securities achieved operating income of 1.311 billion yuan in 2024, a year-on-year decrease of 12.13%; and achieved a net profit of 278 million yuan, a year-on-year decrease of 12.58%. On the same day, State Grid Yingda announced the unaudited financial report of Yingda Securities for 2024, with Yingda Securities achieving total operating income of 719 million yuan in 2024, a year-on-year increase of 15.97%; and a net profit of 175 million yuan, a significant increase of 84.21%. In addition to the two firms that disclosed their annual reports, Guoyuan, which released its performance bulletin, and Dongxing, which announced an increase in performance, three out of the four securities firms showed a significant increase in performance. Among the securities firms that have disclosed their performance, proprietary trading has become the core force supporting the performance of securities firms. Yingda Securities saw a significant increase of 308.07% in proprietary trading income in 2024, while Minmetals Securities' proprietary income increased by 58.08% year-on-year. Guoyuan stated in the performance bulletin that the company's main business income from proprietary investments and wealth credit significantly increased year-on-year. Dongxing also revealed that the company's investment performance had significantly increased. In addition, the steady growth of wealth business has contributed significantly to the improvement of securities firms' performance. Sell-side research generally believes that the fourth quarter performance of securities firms in 2024 is expected to exceed expectations, with some sell-side analysts believing that the net profit of listed securities firms in the fourth quarter of 2024 may increase by 117% year-on-year. In addition, sell-side research is optimistic about the performance of securities firms in 2025, believing that the performance in the first half of 2025 is expected to continue the trend of year-on-year improvement. Performance of 4 securities firms revealed For Minmetals Securities, brokerages, investment banking, asset management, and interest businesses all declined, with only proprietary trading showing a strong increase. Minmetals Securities' unaudited financial report for 2024 showed that its brokerage business fee net income was 78 million yuan, a decrease of 18.75% year-on-year; investment banking business fee net income was 325 million yuan, a significant decrease of 46.81% year-on-year; asset management business fee net income was 72 million yuan, a decrease of 32.08% year-on-year; interest net income was 312 million yuan, a decrease of 12.36% year-on-year; while proprietary trading income was 509 million yuan, an increase of 58.08% year-on-year. For Yingda Securities, last year's performance growth mainly came from brokerage, asset management, and proprietary trading, while interest and investment banking businesses declined. In 2024, Yingda Securities' interest net income was 262 million yuan, a decrease of 25.99% year-on-year; brokerage business fee net income was 164 million yuan, an increase of 6.49% year-on-year; investment banking business fee net income was 17 million yuan, a decrease of 26.09% year-on-year; asset management business fee net income was 4 million yuan, a significant increase of 129.84% year-on-year; and proprietary trading income was 253 million yuan, an increase of 308.07% year-on-year. As for Guoyuan, on January 10, Guoyuan disclosed its performance bulletin, showing that in 2024, the company achieved operating income of 7.839 billion yuan, a year-on-year increase of 23.34%; achieved a net profit of 2.285 billion yuan attributable to shareholders of the listed company, a year-on-year increase of 22.33%; and achieved a net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses of 2.284 billion yuan, a year-on-year increase of 34.56%. Guoyuan attributed its performance growth mainly to proprietary trading and wealth credit business. In the performance bulletin announcement, the company stated that in 2024, it persisted in seeking progress while maintaining stability, promoted the implementation of strategic goals, focused on serving the real economy, accelerated the transformation of wealth management business, strengthened investment research capabilities, improved business synergy mechanisms, and established a solid compliance risk control line. As the capital market activity increased and its own operational capabilities strengthened, the company's main business income from proprietary investments and wealth credit significantly increased year-on-year, exceeding the annual operating tasks. For Dongxing, on January 6, Dongxing announced that it is expected to achieve a net profit attributable to the owners of the parent company of 1.45 billion to 1.7 billion yuan in 2024, an increase of 630 million to 880 million yuan year-on-year, with a year-on-year growth of 76.89% to 107.38%. Dongxing stated that the significant growth in investment performance and steady development of wealth business and asset management were the main reasons for the increased performance forecast. Sell-side: Securities firms' performance in the fourth quarter of last year is expected to exceed expectations Zheshang Research pointed out that supported by a low base, a significant rise in the bond market, and significant expansion of trading volume, the performance of securities firms in the fourth quarter of 2024 is worth looking forward to. The recent performance forecasts and bulletins of securities firms may become catalysts for sector trends, as the valuation level of the securities sector is still low, and it is expected that the performance in the first half of 2025 will continue the trend of year-on-year improvement. It is recommended to continue to focus on securities firms with low valuations and prominent advantages in the retail sector. According to Zheshang research, the net profit of listed securities firms in 2024 is expected to increase by 12% year-on-year, with a year-on-year increase of 117% in net profit for the fourth quarter of 2024. In terms of business lines, it is expected that in the fourth quarter of 2024, the net income growth rates of brokerage, investment banking, asset management, credit, and investment business will be 70%, -18%, -1%, -5%, and 65% respectively. Specifically, in 2024, brokerage business net income of listed securities firms is expected to increase by 6% year-on-year; investment banking business net income is expected to decrease by 34% year-on-year; asset management business net income is expected to decrease by 2% year-on-year; credit business interest net income is expected to decrease by 23% year-on-year; and investment business net income is expected to increase by 37% year-on-year. In terms of brokerage business, in the short termThe rise of the central trading volume in the market will directly lead to a reversal of brokerage business income. In the medium term, the lowering of the yield of capital-guaranteed products represented by bank fixed deposits and wealth management-type insurance will divert more funds to the capital market, helping to boost the rise of the central trading volume in the market.In terms of investment banking business, it is expected that by 2025, with the market rebounding, it will begin to self-repair under the low base effect, and mergers and acquisitions business will also become a driving force for the recovery of investment banking activity. In terms of asset management business, it is expected that passivization will be the main theme of the asset management industry in 2025, but the low management fees of ETF products will not bring significant profit elasticity. Securities asset management is expected to focus mainly on fixed-income related products. In terms of financing business, the scale of margin financing business has basically contracted to a freeze point, but financing business will benefit from the clear increase in market risk appetite. In terms of investment business, the performance of securities firms will continue to be polarized in 2024, and this trend is expected to continue into 2025. The convenience of swaps will exacerbate the volatility of securities firms' profits. The performance differentiation in Q3 of 2024 will also make the industry reassess the value of proprietary trading, and it is expected that the use of OCI accounts will become the main way for the industry to control profit volatility. This article is reprinted from "Financial Alliance", GMTEight Editor: Jiang Yuanhua.