Date：June 15, 2015
Source:Futures Daily

In 2014, new members joined the “100-million-net-profit club”.
According to the latest statistics released by China Futures Association (CFA), 12 futures firms earned net profit of over RMB100 million in 2014. The “a-hundred-millionaire club” welcomed newcomers of Zhongcai Futures, Everbright Futures and China Merchants Futures, and bid farewell to Huatai Futures, which was one of its ten members in 2013 but yielded only 86-million-yuan net profit this year.
The 12 futures firms are: CITIC Futures (280 million yuan), Yongan Futures (279 billion yuan), Guotai Jun’an Futures (190 million yuan), COFCO Futures (157 million yuan), Zhongcai Futures (144 million yuan), Haitong Futures (135 million yuan), Galaxy Futures (133 million yuan), GF Futures (129 million yuan), Guosen Futures (120 million yuan), China International Futures (119 million yuan), Everbright Futures (110 million yuan) and China Merchant Futures (104 million yuan).
Zhongcai Futures: The Dark Horse
Notably, Zhongcai Futures, whose net profit figure was negative in 2013, surged to the fifth in 2014. Rising from losing 33.52 million yuan to earning a net profit of 144 million yuan, Zhongcai Futures is undoubtedly a dark horse in the futures industry in 2014.
Zhongcai Futures’ fee revenue in 2014 was 35.58 million yuan, the 88th in the industry. It was not among the top ones in terms of registered capital and clients’ equity, which means its net interest income was only moderate. Deductively, own fund investment revenue was key to its rising in 2014.
Yang Wei, General Manager of Zhongcai Futures, said that phrasal achievement has been made as the firm utilized its own capital to purchase financial assets in compliance with laws and regulations as part of the strategic arrangement made by the board of directors of the group after the financial crisis in 2008.
“Basing on this achievement, the firm will give full play to its strengths by utilizing shareholders’ resources and advantages and combing its brokerage and asset management services,” added Yang Wei.
According to a person familiar with the industry, although the rise of Zhongcai Futures in terms of net profit is exceptional, it indicates the profit structure of futures firms is changing. As the percentage of brokerage revenue in terms of profit-making may continue to drop with online futures account opening approaching, innovative services and equity fund investment will be the key driver of profiting for futures firms.
Futures Firms’ Profit Structure is Changing.
In recent years, with commission rate of brokerage services decreasing and innovative services increasing, the percentage fee takes up in revenue keeps dropping, while the percentages of net interest income and other revenues going up across the industry.
It is learned that in 2014, the fee revenue of the 151 futures firms across the country totaled 10.241 billion yuan, down 17.98% from the previous year, while net interest income and other revenues totaled 6.881 billion yuan and 1.688 billion yuan respectively, up 27.45% and 166.28% from 2013.
The top 10 futures firm in terms of fee revenue are: Yong’an Futures (393 million yuan), Guotai Junan Futures (350 million yuan), Galaxy Futures (318 million yuan), Haitong Futures (292 million yuan), CITIC Futures (282 million yuan), Founder CIFCO Futures (249 million yuan), Nanhua Futures (229 million yuan), GF Futures (223 million yuan), Shenyin & Wanguo Futures (221 million yuan) and Everbright Futures (216 million yuan).
The top 10 futures firm in terms of clients’ equity are: CITIC Futures (18,624 million yuan), Yong’an Futures (14,784 million yuan), Guotai Jun’an Futures(13,752 million yuan), Galaxy Futures (12,081 million yuan), Haitong Futures (11,520 million yuan), Huatai Futures (7,935 million yuan), Shenyin & Wanguo Futures (7,322 million yuan), Everbright Futures (7,112 million yuan), COFCO Futures (6,709 million yuan) and Founder CIFCO Futures (6,443 million yuan).
“As China’s futures market keeps growing, futures firms’ clients’ equity is increasing fast. In 2013 and 2014, futures firms’ net interest income was remarkable thanks to China’s high interest rate. Besides, equity fund of many firms shifts from agreement deposit to new financial assets, such as funds and equities, driving up the rate of return of their equity fund,” said Zhou Lei, Deputy General Manager of Galaxy Futures. At present, fee revenue remains futures firms’ main revenue. Though developing rapidly, innovative services are of small scale, and low percentage. But it is expected that the percentage innovative services takes up in futures firms’ profit structure will increase as asset management and risk control services develop.