Just after releasing a "stable with slight growth" 2025 annual report, Nanhua Futures Co.,Ltd. (603093.SH) has been publicly cited by regulators. The A+H listed futures institution, along with its CEO who earns a monthly salary exceeding 160,000 yuan, has been recorded in the integrity archive.
A dual penalty was imposed by regulators today, as the Zhejiang Securities Regulatory Bureau updated several disciplinary actions. Two penalties issued on April 1 this year targeted Nanhua Futures and its CEO Jia Xiaolong.
The regulatory letter indicates that Nanhua Futures failed to effectively implement internal control systems related to procurement, resulting in losses, and inadequately managed the professional conduct of certain employees. These actions violated Article 56 of the "Measures for the Supervision and Administration of Futures Companies". Consequently, the Zhejiang Securities Regulatory Bureau issued a warning to Nanhua Futures, recorded the violation in the securities and futures market integrity archive, and required the company to organize staff training on relevant laws and regulations to prevent future violations, with a written rectification report due within 30 days.
The CEO of Nanhua Futures, responsible for the company's overall operations and management, was held accountable for these violations. He also received a regulatory warning, was recorded in the integrity archive, and must submit a written rectification report. This marks the first penalty for the A+H listed futures institution in nearly two years.
Just four days before the regulatory notice, Nanhua Futures disclosed its 2025 annual report: operating revenue of 13.88 billion yuan, up 2.45% year-on-year; net profit attributable to shareholders of 486 million yuan, up 6.18% year-on-year; and adjusted net profit of 489 million yuan, up 7.67% year-on-year, showing overall stable performance with slight growth. The company also completed its H-share listing, achieving a dual capital market presence, and proposed a dividend of 0.69 yuan per 10 shares with a 4.5-for-10 stock dividend.
Business segments showed clear divergence. Overseas financial services generated revenue of 758 million yuan, up 15.79% year-on-year, with a gross margin of 66.26%, leading all business lines and becoming the core pillar of the company's revenue and profit. Futures brokerage business revenue reached 475 million yuan, down 3.85% year-on-year, with a gross margin of 11.60%, up 4.47 percentage points, reflecting effective cost control and optimized client structure amid intensified industry competition. Risk management business revenue was 80 million yuan, down 37.51% year-on-year, with a gross margin of 8.11%, up 0.57 percentage points, as the company actively reduced spot trade scale to focus on higher-value services. Wealth management business revenue was 65 million yuan, down 4.75% year-on-year, with a negative gross margin of -37.04%, still in the strategic investment phase and not yet profitable.
Against this backdrop of improved performance, average employee compensation at Nanhua Futures decreased, while key executives generally received salary increases. Data shows total compensation for 2025 was 428 million yuan, down 7.63% year-on-year. With 1,045 employees at period-end, average compensation fell from 444,000 yuan to 413,000 yuan, a 7.00% decrease. In contrast, core executives saw double-digit salary increases. CEO Jia Xiaolong's pre-tax compensation for 2025 was 1.9373 million yuan, equivalent to approximately 161,400 yuan monthly, up 17.41% year-on-year, the second-highest increase after the chairman. The 1979-born executive, who rose from an ordinary employee to CEO with nearly two million yuan in annual compensation, now faces regulatory scrutiny.
The contrast is striking: stable performance, high growth in overseas business, and A+H listing made 2025 a positive year for Nanhua Futures. Yet, internal control failures and management negligence led to dual regulatory penalties, creating a sharp contrast with the reality of employee pay cuts and executive raises. For futures institutions, compliance is the lifeline and internal control the bottom line. While performance can grow modestly and salaries can be adjusted, responsibility must not be neglected, and risk control cannot be absent. The dual penalty system reaffirms that performance growth cannot掩盖 compliance shortcomings, and high salaries correspond to greater management responsibility. For this newly H-share listed futures institution, strengthening internal controls and clarifying responsibilities is more urgent than profit distribution or business expansion. Otherwise, even impressive financial statements cannot withstand the impact of regulatory penalties.