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Public company info - CMBC Capital Holdings Limited , 01141.HK
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CMBC Capital Holdings Limited, 01141.HK - Company Profile
Chairman Li Jinze
Share Issued (share) 47,600,000,000
Par Currency Hong Kong Dollar
Par Value 0.01
Industry Securities
Corporate Profile Business Summary: The principal activities of the Company are investment holding and provision of loan financing services. Performance for the year: During the Reporting Year, the Group’s profit attributable to the owners of the Company was approximately HK$356.9 million (Previous Year: profit of approximately HK$245.2 million), representing an increase of 45.5%. The Group’s basic and diluted earnings per share were HK0.75 cents (31 December 2018: basic and diluted earnings per share of HK0.53 cents). The Group’s revenue increased by 23.7% to approximately HK$978.7 million during the Reporting Year, compared to approximately HK$791.2 million in the Previous Year. Business Review Securities The Group’s securities business mainly includes the provision of brokerage services, securities margin financing services, futures and options contracts dealing services and securities underwriting/placing services to clients. During the Reporting Year, the Group completed 102 bonds underwriting transactions for 82 Chinese enterprises and financial corporates. The Group acted as a global coordinator in 40 projects out of those transactions with the overall scale of underwriting exceeding US$30 billion. While actively enhancing growth in its bond underwriting business, the Group exercised strict control over its underwriting risk and continued to maintain a high-quality issuer base, which primarily covered industrial issuers, banks and non-banking financial institutions, urban investment enterprises with investment grade as well as high-quality real estate issuers, so as to safeguard the Group’s reputation and image in the offshore capital market. The Group’s debt capital market department also provides some significant bonds issuer clients with international rating advisory services. During the Reporting Year, the revenue and profit contributed by the securities segment were approximately HK$129.0 million and HK$89.1 million, respectively, compared to the revenue and profit of approximately HK$136.0 million and HK$81.8 million, respectively in the Previous Year. The decrease of the segment revenue was due to the decrease of the arrangement fee from the margin financing clients. The increase of the profit in the segment was mainly attributed to the decrease in finance costs. The Group continued to solidly develop securities brokerage business and margin financing business. Our securities brokerage business includes trading securities, bonds and other marketable securities of listed companies on behalf of clients. Margin financing business includes provision of stock secured financing for retail, corporate clients and high-net-worth clients who need finance for purchasing securities. The Group adopted a relatively cautious development strategy as to the securities brokerage business and margin financing business. Investment and financing During the Reporting Year, revenue from the investment and financing segment, which included but not limited to coupon, dividend and distribution income from listed bonds, listed equities, unlisted equity interests, unlisted funds, unlisted notes and debt investments, as well as interest income from loans, amounted to HK$786.6 million in aggregate as compared to HK$392.1 million in the Previous Year. The segment profit increased from HK$110.9 million in the Previous Year to HK$339.2 million in the Reporting Year. The increase in segment profit and revenue were mainly attributable to the improvement in market conditions and the enlargement of investment portfolio size. As at 31 December 2019, the Group’s investment portfolio mainly included but not limited to listed bonds, listed equities, unlisted equity interests, unlisted funds, unlisted debt investments, covering a wide range of sectors such as industry, pharmaceuticals, technology, consumer goods, real estate and finance. As at 31 December 2019, the assets of the proprietary investment of the Company amounted to approximately HK$8.0 billion (31 December 2018: approximately HK$4.1 billion), including bonds investment of approximately HK$7.2 billion (31 December 2018: approximately HK$3.1 billion). During the Reporting Year, the Group’s total investment portfolio increased by approximately HK$3.9 billion. This was mainly due to the net purchase of listed bonds (measured at FVOCI, FVTPL and amortised cost) and unlisted funds and the fair value gain recognized in the Reporting Year. Benefited from the favorable performance of the bond market, such portfolio delivered excellent results during the Reporting Year and achieved significant capital return and interest income. The future performance of such portfolio will depend on many factors, including uncertainties around the current financial markets, development trends and investor sentiment in the economic development in both Hong Kong and Mainland China. During the Reporting Year, the investment portfolio generated income in an aggregate amount of approximately HK$424.8 million, including interest income from debt securities investments of approximately HK$335.5 million, interest income from FVTPL investments of approximately HK$45.3 million and dividend income and other investment income of approximately HK$44.0 million. For investments classified as financial assets measured at FVOCI and FVTPL, the Group recorded a net gain during the Reporting Year which mainly comprised; (i) net gains/(losses) recognized in the consolidated statement of profit or loss, and (ii) net losses not recycled through profit or loss upon disposal of financial assets measured at FVOCI. The Company maintains a solid proprietary bonds investment approach and is committed to a revenue-based (including charging fixed contractual interest income and receiving gains on disposal) trading strategy. Adopting a consistent top-down/ bottom-up approach in its investment analysis, the Company pursues investment with high-level and sustainable revenue with limited volatility. It implements a prudent risk management strategy to strike a balance between risk management and revenue generation and diversify investment to various opportunities. Position in any single bond shall not account for more than 5% of the overall position and the portfolio is diversified by investing in various issuers in a wide range of sectors, thereby avoiding the risk of substantial market adjustment. At the same time, the unlisted direct investment business of the Group, including investment in equity interests and funds investments projects, mainly focused on trending industries, such as high-end technology, great healthcare and artificial intelligence, and the value of the investment projects held recorded an overall stable growth during the Reporting Year. The loan business of the Group maintained the liquidity of the Group’s assets through the selection of quality clients and projects with a focus on short-to-mid term financing. The loans were granted to market players in various industries, such as finance, technology, healthcare, sports, education and real estate, which created a diversified loan portfolio. Concentration, maturity profile and risk-to-revenue ratio of the asset portfolio were under constant monitoring. Thorough pre-, peri- and post-investment management were implemented and practicable and effective risk control measures were put in place to manage the credit risk of the Group. Asset management, corporate finance and advisory The Group’s asset management, corporate finance and advisory segment represents the provision of asset management services, corporate finance services and financial advisory services to clients. During the Reporting Year, revenue of approximately HK$154.2 million and profit of approximately HK$100.4 million were recorded for this segment, as compared to revenue of approximately HK$189.9 million and profit of approximately HK$148.6 million in the Previous Year. The segment revenue and profit decreased due to the decrease in the number of advisory projects as compared to the Previous Year. However, the expansion of the asset management business and the corporate finance service had brought to the segment a more diversified source of income. (I) Asset management During the Reporting Year, the funds managed by the Group benefited from the active subscription by external clients and good investment performance, which contributed to a significant increase in management fee income. During the Reporting Year, the asset management segment recorded a revenue of approximately HK$77.6 million (Previous Year: approximately HK$25.2 million). 2019 witnessed a complex and changeable capital market in Hong Kong. While putting more efforts in the research of fundamentals, the Group’s asset management team paid closer attention to the development and improvement of its investing and trading ability. The asset management team managed to make investments while being “sensitive to market, loyal to trends, skilled at trading, ready to assume responsibility and strictly self-disciplined” throughout the year, thereby achieving good investment performance. One of its fixed-income fund outperformed index and most of the similar products. In the assessment conducted by Barclay Hedge, a well-known global fund research institution, the fund was awarded the honor of the global “Top 10 long-short fixed-income strategy fund”, which is assessed based on the rate of net investment return, ranking second among Chinese institutions. Steady progress was made in the unlisted equity investment business, and sci-tech funds saw a prominent growth in size after new investors made subscriptions. The Group will keep seeking for investment opportunities in sci-tech and medical sectors in the future. (II) Corporate finance and advisory In 2019, the overall situation was not optimistic due to the large market volatility, sensitive investor sentiment and tighter regulation. Nonetheless, under the leadership of the Group, the corporate financial segment managed to sign with a number of clients the letter of appointment as listing sponsor and submitted five applications for listing on the main board of the Stock Exchange, two of which ended up in a successful public offering in the same year. Such projects covered a wide range of traditional and emerging industries, including finance, manufacturing, healthcare and Internet. It is worth mentioning that in the Reporting Year, one of the main board projects we sponsored was oversubscribed by more than 1,400 times in the public offering, being the only IPO oversubscribed by more than 1,000 times in Hong Kong in 2019 and the share saw an excellent post-listing performance, which marked a successful end to the Group’s sponsorship business in the Reporting Year. In addition to the sponsorship projects, we also participated in two listing projects as a joint bookrunner. As far as project execution is concerned, we were not at all inferior to any of the strong traditional Chinese securities companies. Prospects: The trade dispute between the PRC and the US has had a profound impact on the economies of both countries. Since Hong Kong has long been the gateway into the PRC for businesses and a trade conduit between the two countries, Hong Kong is also adversely affected by the trade dispute. In addition, the future of the Hong Kong economy, dependent upon whether the political unrest can be resolved and the impact of the coronavirus disease outbreak, has become increasingly uncertain, and the Hong Kong government has recently lowered its forecast for the economic growth of this year. Since the outbreak of coronavirus disease in December 2019, it has spread to many countries and has seriously interrupted the financial market, the economic activity and the demand for goods, resulting in widespread fear. An outbreak of coronavirus disease or the measures taken by the governments of affected countries against such outbreaks or the perception of an outbreak of coronavirus disease may have an adverse effect on economic conditions in the PRC, Asia and the rest of the world. Although the Group has achieved satisfactory results for the Reporting Year and is optimistic about the long-term continuous growth of both Hong Kong and Mainland China’s economies, and even though the Group strives to further develop its business, it is believed that the Group should act cautiously and be mindful about the risks which the Group may face in 2020. Hence, the Group will adopt the following development strategy.

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