Investment returns shrink, Tianfeng Securities’ Q1 net profit plunges 99% to 220,000 yuan | Financial Report Insights

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In the first quarter of 2026, Tianfeng Securities’ operating income was 437 million yuan, a year-on-year decrease of 31.06%. Net profit attributable to the parent was only 224,000 yuan, a sharp drop of 99.07% year-on-year—almost zero. Non-recurring net profit was -34.32 million yuan, a year-on-year drop of 218.61%, turning from profit to loss.

The core issue behind the collapse in performance lies in a substantial shrinkage in investment income. Investment income in the first quarter was only 71.26 million yuan, more than 370 million yuan less than the 442 million yuan in the same period last year, almost single-handedly dragging overall profit down. At the same time, gains from changes in fair value turned negative, shifting from a positive 1.417 million yuan last year to a loss of 14.08 million yuan, further intensifying profit pressure.

There was a bright spot in operating cash flow. Net cash flow from operating activities in the first quarter reached 2.58 billion yuan, compared to a net outflow of 666 million yuan in the same period last year, marking significant improvement. The company explained this was mainly due to a notable increase in net cash received from agency securities trading and net amount from repo business, with brokerage and financial business marginally improving as market activity picked up.

In terms of asset scale, total assets grew by 2.98% since the beginning of the year to 94.968 billion yuan, shareholders’ net assets remained basically stable, and risk control indicators were overall in compliance. However, profitability declined sharply, with weighted average return on equity (ROE) dropping from last year’s 0.10% to nearly zero, posing a clear challenge to capital efficiency.

Brokerage Business Stands Out, but Can’t Mask the Collapse in Investment Income

Breaking down the composition of operating income, the two business lines showed starkly opposite trends.

Net fee and commission income was 559 million yuan, up about 6% year-on-year. Among them, brokerage business fee net income was most eye-catching, jumping from 219 million yuan in the same period last year to 336 million yuan, a year-on-year increase of 53.6%, benefiting from the sustained rebound in A-share trading activity.

However, the "collapse" in investment income wholly overshadowed the commission business’ glory. Investment income plummeted from 442 million yuan last year to just 71.26 million yuan, a drop of 83.9%. Gains from changes in fair value also turned from positive to negative. The two together decreased by almost 380 million yuan year-on-year—almost equivalent to the entire operating income for the quarter, directly breaking through the profit bottom line.

Investment banking fee net income dropped from 209 million yuan to 135 million yuan, a decrease of about 35%, continuing the pressure and reflecting the relatively cautious IPO and refinancing market conditions in the industry.

Cost Uncontrolled, Taxes Add to the Blow

Total operating expenses decreased from 575 million yuan last year to 452 million yuan, a narrowing of about 21%. Business and management fees went from 559 million yuan down to 437 million yuan, showing efforts to actively control costs. But compared to the revenue drop of over 31%, the reduction in expenses was clearly insufficient, resulting in a loss of 15.13 million yuan in operating profit, compared to a profit of 59.2 million yuan last year.

Tax level saw unusual disturbances. This quarter’s income tax expense was 19.47 million yuan, while last year’s tax deduction led to an income tax of -1.67 million yuan (a tax benefit). This reversal means that with pre-tax profit at only 12.19 million yuan, the income tax instead “ate” 19.47 million yuan, directly causing net profit to be -7.28 million yuan. Ultimately, net profit attributable to the parent barely stayed positive at 22,000 yuan, thanks to the “subsidy” from minority shareholders’ loss.

Assets and Liabilities Both Expand, Liquidity Coverage Ratio Narrows Sharply

By quarter end, total company assets were 94.968 billion yuan, an increase of 2.745 billion yuan since the start of the year. Asset-side changes were mainly cash increasing by 1.755 billion yuan, settlement preparatory funds increasing by 1.332 billion yuan, and money lent increasing by 292 million yuan; the expansion in agency securities trading was evident.

On the liabilities side, sale-repo financial assets payments grew from 6.817 billion yuan at the start of the year to 9.03 billion yuan, an increase of over 2.2 billion yuan. Agency securities trading funds rose from 11.036 billion yuan to 13.011 billion yuan, both matching the expansion in brokerage and capital business. Funds borrowed dropped from 3.42 billion yuan to 1.97 billion yuan, indicating adjustments in short-term financing structure.

Regarding risk control indicators, net capital was 19.3 billion yuan, risk coverage ratio was 162.75%, and capital leverage ratio was 22.27%—all within regulatory requirements. Notably, liquidity coverage ratio dropped sharply from 771.59% at the start of the year to 150.86%, still above compliance line but with a significantly narrowed safety buffer, so ongoing liquidity management warrants attention.

Operating Cash Flow Net Inflow of 2.58 Billion Yuan Becomes Highlight of the Quarterly Report

Net cash inflow from operating activities in the first quarter reached 2.58 billion yuan, one of the most valuable data points in this quarterly report. Net cash received from agency securities trading was 2.281 billion yuan, net increase in repo business funds was 2.229 billion yuan—these are the main forces behind the sharp positive turn in operating cash flow, confirming significant expansion in client funds.

Net cash flow from investing activities was 626 million yuan, up year-on-year, mainly resulting from 2.417 billion yuan in investment recovery against 1.876 billion yuan in new investment expenditure, indicating a net recovery trend.

Net cash outflow from financing activities was 118 million yuan. Bond issuance scale increased from 2.241 billion yuan last year to 4.29 billion yuan, reflecting greater financing strength. However, debt repayment reached 4.633 billion yuan, plus interest payments and other financing fees, totaling a net outflow of about 118 million yuan in financing activities, with the debt-to-asset ratio remaining basically stable.

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