Significant growth in fixed income business, DFZQ's profits increased against the trend by double digits

On July 27, DFZQ (600958.SH) disclosed its 2024 interim report, with current revenue and net profit attributable to the parent company reaching 8.571 billion yuan and 2.111 billion yuan, respectively.

Although the revenue for the first half of 2024 decreased by 1.43% year-on-year, the net profit attributable to the parent company increased by 11.05% year-on-year.

According to DFZQ, this growth was mainly driven by the year-on-year increase in performance of fixed income investments and a decrease in operating and management expenses and credit impairment losses.

Against the backdrop of weakening equity investments, fixed income investments stood out. In the first half of this year, the cumulative increase in the 5-year treasury bond futures reached 1.21%.

This has been an important support for the performance of many securities firms in the first half of this year.

According to Wind data from TradeWind01, as of July 27, a total of no less than 18 securities firms have disclosed their 2024 interim reports. Apart from DFZQ, there are 6 securities firms that are still in a growth trend in terms of net profit attributable to the parent company for the current period. They are Huatai Securities (600909.SH), Guoyuan Securities (000728.SZ), Hongta Securities (601236.SH), Jinlong Shares (000712.SZ), Shouchuang Securities (601136.SH), and Dongxing Securities (601198.SH).

Many securities firms also acknowledge the driving role of fixed income business in their performance.

In the first half of 2024, Guoyuan Securities (000728.SZ) saw a 9.44% year-on-year increase in net profit attributable to the parent company.

"In the first half of the year, the company's heavy asset departments represented by fixed income business achieved more securities investment income (including fair value change income) compared to the same period last year, which helped the company achieve steady progress in its operational goals," Guoyuan Securities stated.

Meanwhile, Shouchuang Securities expects a year-on-year increase in net profit attributable to the parent company ranging from 65.44% to 79.98%.

"Continuously consolidating the core strengths of specialty business asset management and fixed income investment trading business, driving the company's various businesses to accelerate transformation breakthroughs," Shouchuang Securities expressed.

However, DFZQ's equity financing business has faced challenges this year.

According to Wind data as of the latest market day, in the first half of this year, DFZQ's investment banking department only secured 1 convertible bond project, with underwriting amount of 1.303 billion yuan, a decrease of over 70% year-on-year