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The semi-annual report of "Securities Mao" is released. On August 9, East Fortune released its 2024 semi-annual report, with total operating income and net profit attributable to shareholders down 14% and 4% year-on-year respectively. At the same time, with the release of the semi-annual report, the latest performance of Tiantian Fund, one of the "three giants" of fund agency sales, also surfaced. In the first half of the year, Tiantian Fund achieved fund sales of 851.382 billion yuan, a year-on-year increase of 4.4%. However, operating income was 1.417 billion yuan, a year-on-year decline of nearly 30%. Some industry insiders said that among the top three institutions in terms of the scale of public fund sales, only Tiantian Fund's latest performance data has been released. The decline in Tiantian Fund's operating income may reflect a common phenomenon in the entire fund sales industry. It is predicted that the entire industry, especially the "giants" of fund agency sales, is also facing considerable pressure.

Revenue and net profit both fell

On August 9, Eastmoney released its 2024 semi-annual report. Specifically, during the reporting period, Eastmoney achieved a total operating income of 4.945 billion yuan, a year-on-year decrease of 14%; and achieved a net profit attributable to the parent of 4.056 billion yuan, a year-on-year decrease of 4%.

Among the company's important operating conditions, Eastmoney also mentioned that benefiting from the significant year-on-year increase in income from securities proprietary fixed-income business, the company realized investment income and fair value change income (not included in total operating income) of 1.639 billion yuan, a year-on-year increase of 42.14%.

In fact, in the first quarter of this year, Eastmoney's performance has shown a certain degree of decline. As of the end of the first quarter of 2024, Eastmoney achieved a total operating income of 2.456 billion yuan, a year-on-year decrease of 12.6%; net profit attributable to the parent company was 1.954 billion yuan, a year-on-year decrease of 3.7%.

Eastmoney said that the overall turbulence and adjustment of the capital market in the first half of 2024 will have a certain impact on the profitability and profit stability of the securities and fund industry. In the face of market fluctuations, the company's performance remains relatively stable.

Specifically, in the first half of the year, the net income from fees and commissions of Oriental Fortune was 2.395 billion yuan, a year-on-year decrease of 3.96%. In terms of business segments, in the first half of the year, the net income of futures brokerage business, investment consulting business, and entrusted asset management business all increased year-on-year, up 50.67%, 10.64%, and 107.16% year-on-year, respectively. However, the net income of investment banking business, securities brokerage business, and fund management business all decreased year-on-year, among which the net income of investment banking business declined most significantly, down 73.37% year-on-year to 1.6678 million yuan.

From the perspective of risks faced, Eastmoney pointed out that the one-stop Internet wealth management services provided by the company are highly correlated with the prosperity of the capital market. Once the capital market prosperity declines, market activity and investor enthusiasm will be directly affected, which may suppress investors' market demand for Internet wealth management services, and thus affect the profitability of the company's overall business.

Tiantian Fund's revenue fell by 30%

In terms of subsidiaries, the latest performance of the highly-watched subsidiaries of East Fortune, East Fortune Securities and Tiantian Fund, was also announced simultaneously. Data shows that in the first half of 2024, East Fortune Securities achieved operating income of 4.705 billion yuan and net profit of 3.074 billion yuan, up 8.76% and 11.22% year-on-year respectively.

Another subsidiary, Tiantian Fund, one of the "three giants" in fund distribution, achieved year-on-year growth in fund sales in the first half of the year, but its operating income declined significantly.

Information from the semi-annual report shows that the financial e-commerce service business of Oriental Fortune mainly provides fund sales services to users through Tiantian Fund. In the first half of the year, the Oriental Fortune Internet Financial E-commerce Platform achieved a total of 86.0331 million fund subscription (subscription) (including fixed investment) transactions, and fund sales were 851.382 billion yuan, a year-on-year increase of 4.4% compared with the semi-annual report data in 2023. Among them, non-monetary funds achieved a total of 54.3279 million subscription (subscription) (including fixed investment) transactions, with sales of 499.664 billion yuan. Overall, the operating income of Oriental Fortune's financial e-commerce services was 1.412 billion yuan, a decrease of 29.72% from the same period in 2023. In addition, as of the end of the reporting period, Tiantian Fund's cumulative fund sales had reached 10.86 trillion yuan.

In terms of performance, Tiantian Fund achieved operating income of 1.417 billion yuan in the first half of the year, a year-on-year decline of 29.64%, and net profit of 64 million yuan, a year-on-year increase of 23.08%.

Public information shows that the China Securities Investment Fund Association has not yet disclosed the sales and holdings of public funds by fund sales institutions at the end of the first and second quarters of 2024. From the latest disclosed data at the end of 2023, Tiantian Fund's "stock + mixed public funds" reached 402.9 billion yuan, ranking third in the top 100 fund sales list, but it has decreased by 24.7 billion yuan from the end of the third quarter of 2023. From the perspective of "non-monetary market public funds", Tiantian Fund reached 549.6 billion yuan at the end of 2023, a decrease of 25.9 billion yuan from the end of the third quarter of 2023.

It should be noted that the month-on-month decline is not limited to Tiantian Fund. According to data from the China Securities Association, as of the end of 2023, in terms of "non-monetary market public fund holdings", Ant Fund, China Merchants Bank, and Tiantian Fund ranked the top three, with holdings of 1,272.3 billion yuan, 773.5 billion yuan, and 549.6 billion yuan, respectively. Compared with the end of the third quarter of 2023, only Ant Fund's holdings increased slightly, while China Merchants Bank and Tiantian Fund declined. In terms of "stock + mixed public fund holdings", China Merchants Bank, Ant Fund, and Tiantian Fund have all seen a significant decline in their holdings compared to the data at the end of the third quarter of 2023.

Financial commentator Zhang Xuefeng pointed out that the overall market environment tends to be sluggish. At the end of 2023, the decline in the "stock + hybrid public offering fund holdings" of the "Big Three" fund agency sales has reflected the overall risk aversion sentiment in the market, and investors' preference for risky assets has decreased. In addition, as market competition intensifies, fee competition among major platforms may also lead to a decline in overall profits. At present, among the "Big Three" fund agency sales, although only Tiantian Fund has released the latest data, the decline in operating income may become a common phenomenon in the fund sales industry. It is predicted that the entire industry, especially the fund agency sales "giants", will face considerable pressure. However, due to the different operating strategies, market positioning and resource allocation of the major platforms, the degree of impact may also vary.

"The future market trends and changes in investor behavior will be the key factors in determining whether the downward trend in sales agencies' operating income will continue. If sales agencies can make progress in product innovation, customer service, digital transformation, etc., they are also expected to further stabilize their operating income," Zhang Xuefeng added.

Beijing Business Daily reporter Hao Yan