Under the fierce scuffle pattern, the "Matthew effect" of the fund industry has become more and more prominent. Different from the head public offering that often appears in the news, a considerable number of small and micro public offerings are silently under the pressure of continuous operating losses. Behind the performance loss, these fund companies generally have problems such as product shortage and poor investment performance.
Source: Brokerage China
Reporter: Yu Shipeng
Brokerage China reporters found that some companies have not issued new funds in the past five years, and some companies have tried to issue popular theme funds such as photovoltaics but failed miserably. Under these difficulties, small and micro fund companies have become more and more marginalized in this round of industry development in recent years, and have even been sold by shareholders in a "liquidation" style.
Seeing these bleak business status, some public fundraising people lamented to the brokerage China reporter that public funds may not be a good business. Although there are licensing barriers, it is not easy to be sustainable in the long term. In contrast, third-party fund sales companies, which are also licensed, may be more likely to get a piece of the pie under the premise of having stable business resources.
01
Deppon Fund lost more than 70 million yuan
Most fund companies are unlisted companies, and their operating data is mainly derived from annual or semi-annual reports disclosed by (listed) shareholders. The recently disclosed 2022 annual report has become an excellent window to observe the latest operation of fund companies.
According to Wind statistics, the 67 fund companies with statistics achieved a total net profit of 39.438 billion yuan in 2022. From the perspective of profit scale, on the one hand, there are 17 leading public offering companies with a profit of more than 1 billion yuan, and their total profit scale has reached 30.664 billion yuan, accounting for 77.75% of the overall profit. On the other hand, 10 fund companies experienced operating losses, with a cumulative loss of 435 million yuan.
On the whole, the loss scale of the 10 public offerings is 10 million yuan. Among them, Deppon Fund lost 73.6903 million yuan, ranking first; Jiangxin Fund and Jiutai Fund both lost more than 60 million yuan, 66.7115 million yuan and 64.2022 million yuan respectively; followed by Fuanda Fund (-53.454 million yuan), Hongta Red Clay Fund (-50.396 million yuan), Morgan Stanley Huaxin Fund (-48.5554 million yuan), Guorong Fund (-38.0945 million yuan), Donghai Fund (-15.5311 million yuan) , Ruida Fund (-13.1451 million yuan), South China Fund (-10.7599 million yuan).
In addition, from the indicator of operating income, 8 out of 10 companies had less than 100 million revenue last year. Among them, the income of Ruida Fund was only 470,300 yuan, and the income of Jiangxin Fund and Guorong Fund was only 7,389,700 yuan and 6,426,600 yuan respectively.
But from the perspective of shareholder background, these fund companies are not bad in "origin". For example, Deppon Fund, Donghai Fund, Hongta Red Clay Fund and other public offerings are all brokerage companies, and South China Fund and Ruida Fund are futures companies. Among them, South China Fund is the first futures public offering in China, but it has lost money for 7 consecutive years since its establishment in 2016. Morgan Stanley Huaxin Fund is a company with a strong foreign investment background, and the company has a 20-year development history since its establishment in March 2003.
02
Jiangxin Fund "One Foundation Has Not Been Issued"
From the reporter's combing, behind many loss-making fund companies, there are hidden problems such as scarce products and poor investment performance. Under the long-term problems of these problems, fund companies have become more and more marginalized in this round of public offering development in recent years.
Take Jiangxin Fund as an example, the company was established in early 2013, issued several funds in the first few years of its establishment, and the management scale reached more than 4 billion yuan in 2017. But after 2017, even in "big years" such as 2020 and 2021, Jiangxin Fund did not issue new funds. As of the end of the first quarter of 2023, Jiangxin Fund has a management scale of 3.056 billion yuan, ranking outside the 100.
Wind data shows that Jiangxin Fund currently has a total of 9 funds, of which 7 are fixed income funds and the other two are flexible allocation funds. Take the largest hybrid bond Jijiang Xin Tian Fu A, for example, the fund was established in 2016, the current size is about 776 million yuan, since its inception has barely returned more than 20%, in recent years has returned 1.46%, ranking 481 out of 662 similar funds. According to the 2022 annual report released by Guosheng Financial Holdings, Guosheng Financial Holdings holds 30% of the equity of Jiangxin Fund, and 2022 is the net profit loss of Jiangxin Fund for three consecutive years, with losses of 10.3472 million yuan, 21.1589 million yuan and 66.7115 million yuan in 2020, 2021 and 2022 respectively.
Let's look at the Guorong Fund, which was established in June 2017, although it has 9 funds, the latest total size is only 601 million yuan, of which many are mini funds with a size of less than 50 million yuan. Among them, Guorong Rongyin, which was established in June 2018, has a latest scale of more than 200 million, which is similar to the scale when it was established, but it has recorded a loss of more than 40% since its establishment. In March this year, the Guorong PV Theme Industry Preferred Fund under Guorong Fund failed to raise funds, becoming the second new fund to fail to issue this year.
It should be pointed out that poor management is not only a loss of performance, some companies have also had a "rat warehouse" incident. According to the announcement of Jiuding Investment (600053) in December 2022, the suspected violations of laws and regulations such as Jiutai Fund and Wu Gang have been investigated by the CSRC, and the CSRC imposed administrative penalties in accordance with the law: Wu Gang was banned from entering the securities market for 5 years and fined 1 million yuan; Jiutai Fund was ordered to make corrections and fined 1 million yuan. Wu Qiang, then chairman of Jiutai Fund, Lu Weizhong, then general manager, Wu Zuyao, then deputy general manager, and others were given warnings, suspended fund qualifications, and fined between 100,000 yuan and 300,000 yuan.
03
Existing capital has chosen to leave the market
From the perspective of financial entities, most fund companies exist as part of the full license layout of major shareholders (especially shareholders such as banks, brokers, insurance, trusts, etc.). However, some shareholders (especially those who are not the largest shareholders) regard the shares of the fund company as financial investments.
In terms of business rules, different financial institutions have different profit cycles. From the observation of industry insiders, traditional insurance companies generally take about 7 years to achieve profitability, while fund companies generally need about three years to make profits. However, from the actual situation, due to the different endowments of each company, the profitability shows great differences. For example, the South China Fund has suffered continuous losses since its establishment 7 years ago, and Morgan Stanley Huaxin Fund, as a company with a 20-year history of development, still loses money.
In the face of these poor management results, the shareholders of the fund company gradually could not sit still. Judging from the reporter's tracking, some fund company shareholders chose to insist, such as Ruida Fund obtained an additional registered capital of 70 million yuan at the end of last year, and the registered capital increased from 100 million yuan to 170 million yuan; the national finance fund ushered in two capital increases in January and June last year, from 150 million yuan to 170 million yuan and then to 200 million yuan. After the two rounds of capital increase, Guorong Securities' shareholding in Guorong Fund increased from 51% to 53%.
But there are also capital that chose to leave the market. According to the website of the Beijing Equity Exchange, Beijing Huayuan Group intends to sell its 30.2419% equity interest in Hongta Red Clay Fund. If the equity transfer is successful, Beijing Huayuan Group will completely withdraw from the list of shareholders of Hongta Red Clay Fund.
Hongta Red Clay Fund was established in June 2012 by three shareholders, of which Hongta Securities contributed 59.27%, Beijing Huayuan Group contributed 30.24%, and Shenzhen Innovation Investment Group contributed 10.49%. According to the 2022 annual report of Hongta Securities, Hongta Red Clay Fund lost 50.396 million yuan, the first operating loss since 2016. As of the end of 2022, Hongta Red Clay Fund has total assets of 856 million yuan and net assets of 607 million yuan. In 2022, it will achieve an operating income of 36.6598 million yuan.
04
The third-party sales business model is better than that of fund companies
Seeing the bleak operating status of these small public offerings, some public offering market people privately lamented to the brokerage China reporter: "In this way, in the fund division chain, fund companies are not a good business. Although there are licensing barriers, it is not easy to survive long-term sustainability. In contrast, third-party fund sales companies, which are also licensed, may find it easier to get a piece of the pie. ”
What the public market source said was not a lack of logic. He further analyzed that the current competition in the field of fund sales is also quite fierce, and the "Matthew effect" will even be more obvious than that of public funds. However, from the perspective of business model, third-party fund sales (licensed institutions whose main business is fund sales, rather than banks, insurance, securities firms, etc.) will save a lot of effort than fund companies.
"The operation and development of fund companies, license qualifications needless to say, but also to raise a group of fund managers, and fund managers need to be given a certain amount of time to make achievements, and then it is possible to open the situation." But even so, there is still endless uncertainty in volatile market conditions. The public market source said.
In contrast, the public offering market believes that the business model of fund distribution will be much simpler, neither requiring high-end office space like fund companies, nor the high salary costs paid to fund managers, especially well-known fund managers, nor uncertainties such as unstable performance. On the contrary, fund sales can obtain a certain operating income as long as there is business. If you have core business resources, it is not difficult to obtain a third-party distribution license under the current circumstances.