TFSL Latest Report

Financial Performance

TFS Financial (stock code: TFSL) recorded an operating income of RMB748.31 million as of December 31, 2024, a slight decrease of 0.10% from RMB754.07 million as of December 31, 2023. Despite the slight decline in operating income, the parent's net profit increased, indicating an improvement in the company's profitability.

Key Financial Data

1. The decrease in operating income was mainly due to the decrease in insurance business revenue from RMB31.91 million to RMB26.82 million, reflecting the intensified competition or poor product sales.

2. The net profit increased by 8.31% from RMB207.07 million to RMB224.26 million, indicating the company's effectiveness in cost control and efficiency improvement.

3. The pre-tax profit increased from RMB261.3 million to RMB283.9 million, showing the strong profitability of the main business.

4. Interest income remained largely stable, decreasing slightly from RMB690.92 million to RMB683.28 million, indicating the company's strong resistance to interest income.

Peer Comparison

1. Industry-wide analysis: The overall operating income of the financial services industry is declining, affected by interest rate changes, regulatory policies, and economic cycles. Intensified competition has caused many companies' operating income to fluctuate. For example, the operating income of 44 listed securities companies in A-share decreased by 12.82% in 2024, reflecting the overall pressure in the industry.

2. Peer evaluation analysis: Compared with peers, TFS Financial performed well in the growth of net profit and pre-tax profit, despite the slight decrease in operating income. Other peers may face greater income pressure, while TFSL can maintain profit growth in a difficult market environment, reflecting its relatively strong management capabilities.

Summary

TFS Financial achieved growth in net profit and pre-tax profit despite the decline in operating income, demonstrating its advantages in cost control and operational efficiency. Although the insurance business revenue faces pressure, the company's overall profitability remains strong, indicating good financial health.

Opportunities

1. TFS Financial can improve insurance business revenue by diversifying products and services to adapt to market changes.

2. With the possible Fed's rate cut policy, the loan demand of banks may increase, and TFS Financial can take advantage of this opportunity to expand its business scale.

3. Emphasizing digital transformation to improve operational efficiency is expected to further enhance profitability and market competitiveness.

Risks

1. The insurance business faces the risk of intensified competition and low consumer sentiment, which may further affect revenue performance.

2. The overall decline in the financial industry's operating income may lead to business growth pressure, affecting the company's long-term profitability.

3. If the Fed's rate cut leads to a narrowing of the net interest margin, it may have a negative impact on the company's profitability.