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Public company info - Convoy Global Holdings Limited , 01019.HK

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Convoy Global Holdings Limited, 01019.HK - Company Profile
Chairman Johnny Chen
Share Issued (share) 7,779,000,000
Par Currency Hong Kong Dollar
Par Value 0.1
Industry Other Financials
Corporate Profile Business Summary: The Group was principally engaged in the IFA business, money lending business, proprietary investment business, asset management business, corporate finance business and securities dealing business. Performance for the year: The Group’s Group revenue for the year ended 31 December 2019 was approximately HK$957.7 million (2018: HK$802.7 million), representing an increase of approximately 19.3% as compared with that for the year ended 31 December 2018. Business Review: (1) IFA Business The IFA business continued to be loss-making in the year of 2019. However, the business started to pick up as the business achieved 10% annual growth in business volume in 2019, driven by the increase in sales productivity by 22% and manpower by 18%. The new management team managed to turn CFS around from over HK$500m operating loss in 2017 to almost breakeven in 2019. A new commission scheme has been launched to the IFA in 2019, with the objective to attract new recruits and boost sales activities. Alongside with the new commission scheme, the IFA business also registered for Million Dollar Round Table (“MDRT”) membership in 2019, being the first insurance broker firm qualified for MDRT membership in the industry in Hong Kong, with 201 IFA registered as 2020 MDRT members. As mentioned before, the senior management is working with the IFA for a new comprehensive plan that would dramatically improve the cashflow and profitability of the IFA business, to further strengthen the Group’s overall long-term competitiveness and create a better balance between performance-based incentives to individual financial advisors and financial return to the Company. With all these new initiatives and campaigns, the business also strived to increase the number of business partners, enhance product variety and strengthen the consultancy force to maintain its competitiveness in the industry The Group believes that the demand on financial planning and advisory services is still on the rise amid the insurance regulatory reform and MPF reform initiatives, and is ready to capture more Mainland China customers in the future. (2) Money Lending Business The money lending business focused on “Specialty Mortgage Service” which offers high loan-to-value ratio and an approach tailored to meet client’s specific financial needs. The newly originated mortgages in 2019 was HK$161.4 million, with all loans secured by Hong Kong properties as collateral. The business maintained a stable return on loans of 9.2% with zero net impairment loss ratio. (3) Asset Management Business The asset management business remained in good shape for 2019, with business model reengineered to reduce risk and all the known legacy issues cleaned up. The business also partnered with Wilshire to enhance the fund due diligence process, risk classification methodology and portfolio management service. The business successfully relaunched discretionary portfolio management services and raised HK$300 million of Asset Under Management (“AUM”). Despite a slower sales inflow, there was an increase of 4% in total AUM compared to 2018. (4) Securities Dealing Business The securities dealing business started to reshuffle the risk management systems, controls and relevant policies and procedures, with the Credit and Control Department established and a credit committee formed in 2018. Upon independent review of the implementation current system and controls in relation to securities margin financing, SFC uplifted all the restrictions previously imposed on the securities dealing business in October 2019. Prospects: MARKET OUTLOOK During 2019, global real gross domestic product (GDP) growth decreased compared with 2018, reflecting slower growth in both emerging markets and advanced economies. The market sentiment in 2019 was also impacted by geopolitical uncertainty, including Brexit and the ongoing trade tension between the U.S. and China. Although uncertainty about the coronavirus (COVID-19) pandemic persisted in 2020, the operating environment continued to recover, as global economic activity rebounded in the last quarter of 2020 and market volatility declined modestly. BUSINESS PROSPECTS The Group is principally engaged in the IFA business, money lending business, asset management business and securities dealing business. As of December 2019, the Group is by far the largest financial advisory firms in Hong Kong with over 1,400 financial advisors and 432 corporate staff serving a sizable share of one of Hong Kong’s working population. Combining the world-class technology of global FinTech business, the management has successfully transformed the Company from an IFA business into a one-stop omni-channel financial service platform since 2017. Currently, the Company’s business strategy comprises three core priorities: Growing and strengthening the fundamental pillars Diversifying the business portfolio by launching new products and services Achieving operational excellence with powerful infrastructure The strategy reflects the need to anticipate and adapt to structural forces shaping the economies and driving the FinTech landscape, especially when the market and financial products are competing, and customer segments are converging at an unprecedented pace. Considering how technology is influencing the way business is running and customers are transacting, this requires the Group to simultaneously invest for growth and create better infrastructure. The Group has to achieve the scale to deliver quality services to the customers seamlessly, that means investing in platforms and creating an ecosystem for the customers. In early 2018, the Group undertook an extensive review of each of its major businesses and core activities. The reviews reinforced the fact that the Group benefits enormously from a strong distribution channel in Hong Kong. At the same time, the Group sees tremendous opportunities to expand its addressable market and grow new business. There is a sense of urgency and excitement about the opportunities identified, yet it is important for the Group to be diligent and not rush into long-term decision making. As the Group pursues these opportunities, its focus is placed on strong risk management and controls — central to the Group’s sustainable ability in meeting the expectations of its customers, shareholders and the regulators. Below are the opportunities and priorities the Group will be focused on in the year ahead. Grow and Strengthen the fundamental pillars The Group’s first strategic priority is to expand the existing businesses and further enhance its profitability. The Group is now executing on various growth initiatives. On insurance salesforce, the Group has embarked on a broad footprint expansion strategy including proactive recruitments, potential acquisitions of small competitors and increasing product coverage. The Group is one of the largest independent insurance distribution firms in Hong Kong, with a significant size to impact the market and accounted for a strong wallet share of life insurers’ business origination. Both customers and insurers value the Group’s deep intermediation capabilities and expertise. The Group sees further potential in this business by growing the insurance salesforce, expanding product offering, offering unbiased product advices and broadening its customer base. The Group’s strong track record built over the past decades has positioned it well in providing customers with long-term protection and investing opportunities. To further strengthen the Group’s overall long-term competitiveness, the senior management is working with the Group’s salesforces for a new comprehensive plan that would dramatically improve the cashflow and profitability of the IFA business. It would create a better balance between performance-based incentives to individual financial advisors and financial return to the Group, increasing long-term shareholder value. Diversify the business portfolio with new products and services The Group has made considerable progress over the past two years, but there are more to do in the years ahead. Since 2018, the Company has created an ensemble of top-notch FinTech investments and partnership in the United Kingdom, the United States and Europe, and the Group is now bringing the best technology to Hong Kong to connect its growing customer base and their growing wealth, to the Group’s broader suite of services. Over time, the Group expects this will grow to be another core capability of its customer-centric multichannel platform. The Group is pleased with the early progress: it has investment in Tandem, a UK digital bank with full banking license; Nutmeg, an established digital wealth management platform in the UK; CurrencyFair, the industry pioneer in digital payment for international and foreign exchange markets merged with Convoy’s payment operations, for Hong Kong and the Greater China partnerships. Together with the self-built product comparison platforms for life and general insurance products, the potential for the Group in this space is significant. The Group will build on these strong relationships and forge new ones by delivering new solutions that solve customer frustrations around outdated technology, limited customization and siloed service offerings. The Group sees a real opportunity to provide its customers with a financial management platform that is both secure and flexible. The Group expects this business to provide synergy to adjacent businesses, including generating more customer flows and cross-selling opportunities. The Group is making tangible progress in building this platform and expects to launch some new offerings to customers next year. Achieve operational excellence with powerful infrastructure The third strategic priority of the Group is to ensure excellence in the business infrastructure by investing in product intelligence, technology and operations that will improve customer experience and drive efficiency across the businesses. The Group has a broad product knowledge base with product comparison built with proprietary technology, and the business units are currently led by industry veterans with deep expertise. The Group is also revamping and upgrading all systems to become fully digitalized with a straight through transaction process when the vendors are ready. FinTech development of the Group in Hong Kong and Malaysia is leading the market, and the Group strives to drive operational efficiency and process standardization in the back-office operations to achieve high standard of performance, reducing the staff level from 503 in November 2017 to 432 in December 2019. A culture of risk management As the Group grows and expands its business reach, bringing the Group closer and to more customers, the Group is dedicated to maintaining the primacy of the control function and upholding the highest standards in risk and operational management. There are important lessons learnt from difficult situations and as it relates to the wrongdoings of the Previous Management Team, the Group has looked back and will continue to reflect on anything else the Group could have done better. It remains a priority for the Group that the culture of integrity, compliance and escalation only improves from this experience. Effective risk management and robust control infrastructure require constant vigilance. An unwavering cultural commitment to it lies at the heart of an effective financial institution and it is a core competence that helps define the Company going forward. Building a new corporate culture The Group is committed to building a capable team and institutionalizing the achievement culture based on the three core values of professionalism, integrity and passion. As a result of the management’s effort, the Group has successfully revamped the top executive rank and workforce, with a change of almost 50% of its workforce in 2018. To further strengthen the engagement level and accountability of the employees, the Group has been promoting open communication proactively (e.g. Monthly Mission Update) across the entire organization to share business directions, project progress and receive employees’ feedback; provides training programmes (e.g. MiniMBA with the Chinese University of Hong Kong) for the employees to broaden their capabilities and accelerate their career developments, and hosts community events (e.g. Green Money) to promote corporate social responsibilities. The Group is also dedicated to launching programmes (e.g. Graduate Trainee, Internship) and platforms (e.g. Hackathon) to nurture young talents in Hong Kong.

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