Fund companies’ performance in 2023 is under pressure, and some institutions are “counterattacking”
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As the annual reports of listed companies are successively disclosed, the operating conditions of the fund companies in which they control and participate in 2023 have also been released. Generally speaking, affected by the volatile trend of the A-share market last year, the net profits of most fund companies declined, and the impact was more obvious for fund companies with a higher proportion of equity funds. Against the backdrop of overall performance pressure, some fund companies have successfully achieved growth against the trend or turned losses into profits with the help of specialized businesses.
Most companies’ annual net profits shrank
Wind data shows that as of press time on April 7, 41 parent companies of public funds have released their 2023 annual reports. From the data point of view, there are 16 fund companies with operating income of more than 1 billion yuan. Among them, E Fund is the only company with revenue of more than 10 billion yuan, reaching 12.5 billion yuan; the fund companies ranked second to fifth have operating incomes of more than 6 billion yuan in 2023, respectively, Guangfa Fund (7.643 billion yuan), China Asset Management (7.327 billion yuan), China Southern Asset Management (6.741 billion yuan) and Wells Fargo Fund (6.715 billion yuan).
In terms of net profit, there are currently 10 fund companies with net profits of more than 1 billion yuan in 2023. Among them, the top five are E Fund, Huaxia, Southern, Guangfa and ICBC Credit Suisse, with net profits in 2023 reaching 3.382 billion yuan, 2.013 billion yuan, 2.011 billion yuan, 1.950 billion yuan and 1.942 billion yuan respectively. In addition, there are many fund companies such as Wells Fargo Fund, China Merchants Fund, Boshi Fund, China Universal Fund, Bank of Communications Schroeder Fund and other fund companies whose net profits will exceed 1 billion yuan in 2023. The leading public funds are “strong and strong” The Matthew Effect continues to appear.
Although leading public offerings have generally maintained a certain operating volume, compared with 2022, the operating performance of the public offering industry has shrunk. Among the 33 fund companies with comparable operating income data, a total of 18 had a year-on-year operating income, accounting for more than half. Among them, 10 fund companies’ operating income shrank by more than 10%. Among the 38 fund companies with comparable net profit data, a total of 23 saw net profits shrink year-on-year, accounting for more than 60%, and as many as 16 had net profits shrink by more than 10%.
On the other hand, compared with 2022, the net profit of 2 billion yuan has been significantly reduced. The net profits of Guangfa, ICBC Credit Suisse, Wells Fargo, and China Universal in 2023 are all less than 2 billion yuan, which are 1.95 billion yuan, 1.942 billion yuan, and 1.814 billion respectively. billion and 1.415 billion yuan, down 8.62%, 27.48%, 12.2%, and 32.41% respectively year-on-year.
Industry insiders said that under the influence of multiple factors such as the A-share market volatility in 2023, the continued weakening of the money-making effect of funds, the cooling of public offering product issuance, and the reduction of public offering fund fees, many fund companies, especially companies with a high proportion of active equity products, are Facing certain operating pressure.
Specialized business helps “counterattack”
Although judging from the industry situation, operating pressure and shrinking net profits are relatively common phenomena, there are still some fund companies that have achieved growth against the trend in 2023, or have turned losses into profits. The reason is closely related to the company’s ability to overtake in corners by leveraging its specialized business.
Among the top ten leading fund companies in terms of operating income in 2023, only Southern Fund has achieved “double growth” in operating income and net profit. Specifically, in 2023, Southern Fund achieved a total operating income of 6.741 billion yuan, a year-on-year increase of 4.20%; a net profit of 2.011 billion yuan, a year-on-year increase of 13.59%. Its parent company Huatai Securities stated in its 2023 annual report that in 2023, Southern Fund continued to optimize its product layout and business system, and actively built value creation capabilities supported by digital intelligence and platformization. As of the end of the year, the total assets under management totaled RMB 1,892.552 billion. Among them, there are a total of 353 public funds under management, with total assets under management of RMB 1,068.063 billion; and non-public funds under management total RMB 824.489 billion.
With its performance on index products, Huatai-PineBridge Fund’s operating income and net profit will also increase in 2023. Data shows that the company achieved a total operating income of 1.757 billion yuan in 2023, a year-on-year increase of 24.81%; a total net profit of 502 million yuan, a year-on-year increase of 32.24%. Its parent company Huatai Securities stated in its annual report that Huatai-PineBridge insists on characteristic development and strengthens the layout of index products, dividend products, overseas products and fixed-income businesses. As of the end of the reporting period, the scale of Huatai-PineBridge’s broad-based index fund CSI 300 ETF It is RMB 131.017 billion, ranking first in the non-monetary ETF market in Shanghai and Shenzhen stock exchanges.
Among medium-sized fund companies, CICC Fund also delivered a good answer, with operating income and net profit increasing by 13.86% and 87.28% respectively. The company has begun to focus on the public offering REITs business very early. The annual report of its parent company CICC shows that CICC Fund completed the first expansion of CICC GLP REIT in 2023, together with CICC Hubei Science and Technology Optics Valley REIT, CICC Shandong High-speed REIT issuance, and the management scale of public REITs remains the first in the industry.
In addition, some small fund companies have also achieved growth against the trend or turned losses into profits. For example, Nanhua Fund, the first futures-controlled public fund, turned a profit in 2023. This is the first time the company has made a profit in more than seven years since its establishment. Founder Fubon Fund also achieved growth against the trend in 2023, with net profit increasing by 63.66%. Founder Securities, its parent company, stated in its annual report that in 2023, Founder Fubon Fund will strengthen active equity products, expand fixed income products, deploy specialty index products, and build diversified investment management capabilities.
Fund managers take a positive view on the market outlook
Looking forward to 2024, many fund managers believe that the A-share market is more likely to gradually stabilize and recover after experiencing a volatile decline in early 2024.
Zhou Weiwen of China Europe Fund stated in the recently released fund annual report that from the perspective of market valuation, the valuation of the index represented by the CSI 300 has a certain degree of attractiveness; from the perspective of the price-performance ratio of stocks and bonds, the valuation of stocks also has a relative advantage. . Therefore, 2024 may be a time to invest in stocks with long-term value. Xie Zhiyu of Industrial Securities Global Fund also believes that the capital market has a higher probability of gradually stabilizing and recovering after experiencing a shock and decline at the beginning of the year.
“In 2024, policies will still be implemented steadily under the multiple goals of stabilizing growth, adjusting structure, and preventing risks. The market’s expectations for the macro economy will experience a process from weak to strong.” Huang Hai of Vanjia Fund said that the market is experiencing domestic real estate After the risks and overseas inflation risks are cleared, it is expected that a volatile and upward cycle will truly begin, and investment opportunities in 2024 will be significantly more diverse than in 2023.
Zhao Yi of Quanguo Fund also believes that from a macro perspective, there will be marginal improvement in 2024. At the same time, after the adjustments in the past year and the growth of corporate performance, the overall market valuation has further fallen, and we are not pessimistic about the new year. However, the tightening of global liquidity still restricts the expansion of valuations, so more attention is paid to structural opportunities.
“From the perspective of market style, low valuations, high dividends and the AI (artificial intelligence) sector have received high attention at the beginning of the year. From the perspective of subdivided sectors, as the internationalization capabilities of my country’s mid-to-high-end manufacturing industry gradually reflect, we are optimistic about artificial intelligence and semiconductors, communications, New technology sectors such as computers.” Xie Zhiyu said that he will continue to track the progress of various fields and explore investment opportunities when technological change accelerates or the prosperity of sub-sectors improves, taking into account risks.
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