Total costs in 4Q23 came in at PLN 31.1m (72% y/y, 45% q/q) and were 4% above our estimates, but were inflated by provision related to Capitea.
Distribution costs went up 44% y/y, staff costs increased 128% y/y, external services costs dropped -15% y/y and other costs increased 139% y/y.
â– At the end of 4Q23 AUM of Quercus TFI came in at PLN 4,409 (44% y/y, 15% q/q). Y/y growth was driven by rising assets of QRS Ochrony KapitaÅ‚u (82% y/y), QRS Agresywny (111% y/y) and QRS DÅ‚użny Krótkoterminowy (110% y/y). Q/q growth of total assets was driven by rising AUM of QRS Ochrony KapitaÅ‚u (14% q/q) and QRS Agresywny (50% q/q).
â– In 4Q23 net flows to Quercus TFI amounted to PLN +261m (vs. PLN 331m in 3Q23 and vs. PLN -114m in 4Q22). In FY2023 net flows came in at PLN 693m vs. PLN - 1,167m in 2022.
â– Teleconference with CEO takes place today, March 22, at 11:00 via MS Teams
Our view:
POSITIVE
4Q23 net profit of Quercus TFI came in at PLN 19m and was 14% above our expectations. The earnings beat (on adjusted basis) was driven by lower costs coupled with slightly better revenues. Success fee in FY 2023 came in at PLN 24m and was slightly better than we had assumed (we expected PLN 21m in 4Q23). We see the 4Q23 numbers as slightly positive with encouraging implications for incoming quarters. 4Q23 saw further strong growth of AUM (15% q/q) supported by solid rates of return of QRS’s funds and positive net flows. Fund managers are being continuously helped by supportive market environment and are able to generate very solid rates of return of both equity- and debt-based products. In our earnings estimates we assume Quercus TFI to deliver FY 2024/25e net profit at PLN 28.4/25.7m. Beginning of 2024 was very good for Quercus as well - in Feb YTD AUM went up 11% and net flows came in at PLN 395m. If current trends are continued Quercus is very likely to beat our earnings expectations, at least for 2024e, we believe.
