Performance is stable, risk control is chaotic, and the high-paid general manager of Nanhua Futures is jointly named along with the company.

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Source: Experts Securities Industry

Performance ticks up; executives get paid more—Nanhua Futures and the general manager with a monthly salary of 160,000 receive a warning letter together

Just after turning in a “steady with gains” 2025 annual report, Nanhua Futures (603093.SH) has once again been publicly named by regulators. This A+H listed futures firm, together with a general manager earning a monthly salary of over 160,000, has both been recorded in the integrity file.

Dual penalties from regulators

Right today, the Zhejiang Securities Regulatory Bureau updated multiple regulatory penalties. Among them, two administrative penalty orders issued on April 1 this year target Nanhua Futures and its general manager, Jia Xiaolong.

The regulatory letter shows that Nanhua Futures had issues such as relevant internal control systems related to procurement not being effectively implemented and causing losses, and inadequate management of the professional conduct of certain employees. This violates the provisions of Article 56 of the 《Administrative Measures for the Supervision of Futures Companies》 (CSRC Order No. 155).

Therefore, the Zhejiang Securities Regulatory Bureau took supervisory and management measures against Nanhua Futures by issuing a warning letter, and recorded it in the integrity file of the securities and futures markets. It required the firm to organize employees to strengthen their study of relevant laws and regulations, prevent the recurrence of violations, and submit a written rectification report within 30 days.

As for Nanhua Futures’ general manager, due to being responsible for the company’s overall operation and management, he bears management responsibility for the above-mentioned violations. He was also warned by regulators, recorded in the integrity file, and required to submit a written rectification report.

This may be the first penalty faced by this A+H listed futures firm after nearly two years.

Performance stabilizes

Four days before the regulatory letter was issued, Nanhua Futures officially disclosed its 2025 annual report: total operating revenue of 1.388 billion yuan, up 2.45%; net profit attributable to shareholders of 486 million yuan, up 6.18%; and non-recurring items adjusted net profit attributable to shareholders of 489 million yuan, up 7.67%. Overall performance was steady with a slight increase. Meanwhile, the company completed its H-share listing to achieve an A+H dual-capital layout, and proposed a dividend of 0.69 yuan for every 10 shares and a bonus issue of 4.5 shares.

Its main business segments show clear differentiation. The overseas financial services business recorded 758 million yuan in revenues, up 15.79%; gross margin was 66.26%, leading among all businesses, and has become the core pillar of the company’s revenue and profit.

The futures brokerage business recorded 475 million yuan in revenues, down slightly by 3.85% year over year; gross margin was 11.60%, up 4.47 percentage points. Against the backdrop of intensified industry homogenized competition, the rebound in gross margin reflects that the company has achieved results in cost control, optimization of customer mix, and increasing the share of institutional and industrial clients.

The risk management business recorded 80 million yuan in revenues, down sharply by 37.51% year over year; gross margin was 8.11%, up slightly by 0.57 percentage points year over year. The revenue decline came from actively compressing the scale of spot trading, optimizing the business structure, and focusing on higher value-added, lower-risk risk management services such as over-the-counter derivatives and market making.

The wealth management business recorded 65 million yuan in revenues, down 4.75% year over year. Gross margin was -37.04%, still negative. This business line is generally in a strategic investment period, mainly affected by phased investments such as Nanhua Fund’s business expansion, channel building, and product layout; it has not yet achieved profitability.

Executives get pay raises

Against a backdrop of improving performance, Nanhua Futures’ average employee compensation decreased, while most key executives received pay raises.

The “three statements” show that in 2025, Nanhua Futures’ total compensation amounted to 428 million yuan, down 7.63% year over year. At the end of the period, the total number of employees was 1,045, down only 0.67% year over year. Based on end-of-period headcount, average compensation fell from 444,000 yuan to 413,000 yuan, a decline of 7.00%.

In contrast, compensation for core executives achieved double-digit increases. Among them, general manager Jia Xiaolong’s pre-tax compensation in 2025 was 1.9373 million yuan, equivalent to a monthly compensation of about 161,400 yuan; up 17.41% year over year, second only to the chairman in terms of the increase.

Born in 1979, this senior professional rose step by step from an ordinary employee at Nanhua Futures to become general manager with an annual salary of nearly two million—yet now he has been warned by regulators.

Reflection on the contrast

With performance stabilizing, overseas business growing strongly, and the A+H capital platform landing, this was supposed to be a good year for Nanhua Futures. But now, due to failures in internal controls and management shortcomings, it has suddenly received regulators’ dual penalties. This sharply contrasts with the reality of “employees’ pay cuts and executives’ pay raises.”

For futures firms, compliance is the lifeline, and internal control is the bottom line. Performance can increase slightly, compensation can be adjusted, but responsibilities cannot be left hanging and risk control cannot be absent.

Regulators’ “dual penalty system—penalizing the institution and penalizing responsible individuals” once again makes clear that growth in performance cannot hide compliance shortcomings, and high pay must come with equally high management responsibility.

For this futures firm that just listed on the Hong Kong stock market, more urgent than profit distribution and business expansion is to first make internal controls solid and press responsibilities down. Otherwise, no matter how good the statements look, it is hard to withstand the impact of a single penalty order.

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