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Public company info - BOCOM International Holdings Company Limited , 03329.HK
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BOCOM International Holdings Company Limited, 03329.HK - Company Profile
Chairman TAN Yueheng
Share Issued (share) 2,734,000,000
Par Currency
Par Value 0.0
Industry Securities
Corporate Profile Business Summary: The Group is principally engaged in securities brokerage, margin financing, corporate finance and underwriting, investment and loans, asset management and advisory businesses. The regulated activities carried out by the Company’s licensed subsidiaries include dealing in securities and futures and advising on securities and futures contracts, providing securities margin financing, advising on corporate finance and providing asset management services. Performance for the year: For the year ended 31 December 2019, the Group’s total revenue and other income was approximately HK$1,570.2 million, representing an increase of approximately 5.8% over HK$1,484.3 million in 2018. The Group’s profit for the year ended 31 December 2019 was approximately HK$500.6 million, representing an increase of approximately 21.8% over HK$411.0 million in 2018. Business Review Securities Brokerage and Margin Financing The Group’s securities brokerage business includes executing trades on behalf of clients in listed company stocks, bonds, futures, options and other marketable securities. The Group executes trades on behalf of clients of various securities products, with primary focus on stocks of companies listed on the Stock Exchange, and other types of securities, including eligible A shares under the Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect, B shares of listed companies on the PRC stock exchanges, US stocks and bonds as well as futures and other exchange-tradable securities. Futures and options contract products include Hang Seng Index futures and options, mini-Hang Seng Index futures and options, H-shares index futures and options, mini-H-shares index futures and options and stock options. Developments in information technology, tightening regulations, increasing competition and new entrants squeezed the fees to a minimum and have led to the transformation of the brokerage business. Amid the revolutionary changes in the traditional brokerage business model, the Group had to explore new breakthroughs and directions to cope with the challenges. In 2019, which was the second year of the Group's 3-Year IT Application System and Infrastructure Strategic Plan, the Group reinforced IT implementation via the commitment of resources and achieved significant results. In the first half of 2019, the Group successfully launched two-factor authentication application to further enhance cyber security. In the second half of 2019, the Group rolled-out the “BOCOMI Services” App with the aim of providing customers with more convenient and comprehensive information and account management services. The deployment of an artificial intelligence system and continuous improvements to the Group's online trading platform have enabled the Group to provide customers with around-the-clock service. In addition to hardware improvement, the Group has also continued to strengthen the construction of the Group's wealth management teams to provide comprehensive advisory services to meet the investment needs of high-net-worth clients for diversified product coverage, including but not limited to exchange-traded products. Assisted by the power of technology, the Group perseveringly strived to improve client experience across each stage of the value chain, including client account opening, customisation of investment advice, research report distribution, middle and back office processes and deal completion. The Group won the 2019 “Best China Broker” award at the Fifth Offshore China Funds Award, which was jointly sponsored by the Chinese Asset Management Association of Hong Kong and Bloomberg and won the “Best Financial Company Stock” award at the Golden Hong Kong Stocks Awards 2019, demonstrating the market’s recognition of the Group's performance and value. In anticipation of the market volatility and the liquidity risk caused by unexpected capital flows, the Group has adopted a wide array of measures to improve the Group's margin financing risk management in terms of client screening and stock collateral assessment. For instance, the Group adopted a flexible interest rate policy to attract high quality clients by offering preferential interest rates and excluding stocks with small market capitalisation and illiquid stocks from the Group's margin collateral list. For the year ended 31 December 2019, the Group's commission and fee income from the securities brokerage business was HK$118.4 million, a decrease of HK$47.2 million or 28.5% as compared with 2018. The Group’s margin financing business includes offering collateralised financing relating to securities transactions to both retail and institutional customers. In response to the increasing credit risk and regulatory changes in the margin financing business, the Group has adopted a systematic approach to deal with stock concentration and client concentration issues and achieved substantial results, although short-term negative impact is expected from the margin financing business. During the Year, the number of margin client accounts continued to grow. The monthly average loan balance decreased and interest income from margin loans for the year ended 31 December 2019 was HK$228.6 million, a decrease of HK$188.9 million or 45.2% as compared with 2018. Corporate Finance and Underwriting The Group is dedicated to building a comprehensive and cross-border platform for the Group's corporate finance and underwriting business. To address various needs of the Group's corporate clients at different stages, the Group provides advisory services ranging from IPO sponsorship, equity securities underwriting, debt securities underwriting, mergers and acquisitions, pre-IPO financing, and financial advisory services. In 2019, there were a total of 183 new listings in Hong Kong (including the transfer of listing from GEM to Main Board). The number of new listings has decreased by 16.1% as compared with 2018. The aggregate amount of funds raised through IPOs was HK$312.9 billion, an increase of 8.6% as compared with 2018. As the Group believes that new economy companies will play an increasing dominant role in the fundraising market, the Group has devoted more resources to building up execution teams specialising in the technology, media and telecommunications, healthcare and biotechnology industries in order to grasp the business opportunities of a new era. During the Year, the Group acted as a sponsor for 5 completed IPO projects in various industries, including one in the healthcare industry. Among all the completed IPO projects, the Group acted as the sole sponsor of 4 projects. Furthermore, the Group acted as a global coordinator and/or bookrunner for 20 completed IPO projects. In respect of debt capital markets, the Group completed 73 debt issuance projects, and successfully assisted the Group's clients in raising approximately USD29.3 billion in aggregate. For the year ended 31 December 2019, the Group's commission and fee income from corporate finance and underwriting services was HK$120.1 million, an increase of HK$60.2 million or 100.6% as compared to HK$59.9 million in 2018. Asset Management and Advisory The Group offers a full range of asset management products including both public and private funds, and discretionary managed accounts, as well as investment advisory services. In addition to Hong Kong, the Group also provides asset management services in Mainland China via BOCOM International (Shanghai) in Shanghai and BOCOM International (Shenzhen) in Qianhai, Shenzhen. The Group’s core value is to provide comprehensive investment solutions and the best services to individual investors and institutional clients. In addition to traditional investments, the Group also offers alternative investments to investors. The Group has built up a cross-border asset management platform through the Group's presence in Hong Kong, Shanghai and Shenzhen to grasp the distinct sources of investment growth in Mainland China. With a focus on investing in artificial intelligence, new materials, bio-pharmaceuticals and next-generation information technology, the Group also provide integrated financial services to investors, including but not limited to the sourcing of investments, project structuring, full value chain financing and tax arrangements. Under the Group's Shenzhen asset management platform, the Group launched a private fund with a focus on cloud technology in early 2019. Before the official launch of the Science and Technology Innovation Board or the “STAR Market” by the Shanghai Stock Exchange, the Group's wholly-owned subsidiary in Shanghai engaging in asset management and BOCOM Guo Xin Asset Management Company Limited formed a partnership enterprise named BOCOM Science and Technology Innovation Equity Investment Fund. As at 31 December 2019, the investments under this newly set up fund covered cloud computing, big data and bio-pharmaceutical industries, which are key industries of the STAR Market. Diversified products are the foundation of the Group's asset management business. As at 31 December 2019, the total amount of AUM was approximately HK$27,437.4 million, representing an increase of approximately 10.6% from HK$24,810.9 million as at 31 December 2018. For the year ended 31 December 2019, asset management and advisory fee income was approximately HK$125.9 million which comprised of management fee income of HK$59.3 million and advisory fee income of HK$66.6 million. Investment and Loans The Group’s investment and loans business comprises of investments in equity and debt securities as well as public and private funds, and the provision of structured finance and corporate loans. The Group aims to achieve a balance between investment returns and tolerable risks. For equity investments, the Group focus on investing in companies which engage in innovative technology, biotechnology, healthcare industry and other new economy industry, and have formulated clear plans for such companies’ public listings in Hong Kong, Mainland China or overseas. Some of these target investments are unicorn startup companies, with broad market recognition and strong growth potential. Based on the Group's investment objectives, the Group strived to achieve an optimal allocation in the Group's fixedincome investments and structured financing business. Supported by high-quality underlying assets and tailor-made structures, the Group mitigated market risks and strengthened collateral controls. For the year ended 31 December 2019, interest income from loans and advances was HK$92.7 million, representing an increase of approximately 16.5% as compared to HK$79.6 million in 2018. Proprietary trading income was HK$690.2 million which represented an increase of approximately 17.5% from HK$587.5 million in 2018. Research The Group’s research team has a deep and solid understanding of the global economic conditions, financial markets and major industries, and provides comprehensive analysis and forecasting in respect of sector- and company-specific fundamentals. The team has been highly rated by institutional investors in Hong Kong, Mainland China and overseas markets. In 2019, the Group won the Professional Outstanding Research Team Service Award at the Professional Financial Institutions Service Awards. Mr. Hao Hong, the head of the Group's research department and chief strategist, was awarded “chief economist of the year 2019” by the China Business Network. As at 31 December 2019, the Group's research team comprised of around 40 strategy and industry analysts and professional staff in Hong Kong, Beijing and Shanghai, with most having master’s degrees and professional qualifications such as CFA and CPA and with 10 years or above experience in finance and/or relevant industries, covering around 140 stocks across new-economy and traditional sectors. With solid capabilities in investment research, the Group's team not only provides forward-looking analysis for the market, but also collaborates with other departments to achieve the best balance between returns and risks for various projects. The Group's macro strategy research is at the forefront of the market with rigorous quantitative models and timely reports on hot spots; it has pioneered the area of new economic cycles and 850-day moving average theory. During the Year, the Group's research team was committed to innovation and further enhanced its research capacity through a series of upgrade projects, thereby providing better services to the Group's clients. The key enhancement projects include: the introduction of an artificial intelligence translation system to realise simultaneous publication of bilingual reports in Chinese and English, which further enhances the efficiency of the Group's research report production; the implementation of an encryption process on research reports to strengthen protection of intellectual property; the organisation of internal training courses to improve staff’s professional skills and knowledge structure; and the strengthening of close collaboration with media and communication with investors, thereby promoting the overall image of the Company. Prospects: 2020 is a year full of severe challenges for the global economy. The “black swan” of COVID-19 at the beginning of the year has broken out on a large scale. More and more countries are emulating the PRC’s approach to contain the virus’ contagious spread at the high cost of suspending economic activity. Production shutdown and supply chain disruption are deepening economic slowdown. Rising fears of recession spark global sell-offs of risk assets and flight to safety; risk assets have collapsed, and the safe-haven assets trade is extremely crowded. As the crisis intensified, central banks have taken coordinated actions. Developed countries ramped up their asset purchases and the Federal Reserve slashed interest rates to zero. However, the Group must be wary that, in the face of any possible recession, advanced economies trapped by unconventional monetary policies and heavy debts have little room for stimulus. The global economy faces great uncertainty under the haze of the epidemic. 2020 stands at a crucial juncture that entails a shift in growth model from old to new drivers and the “13th Five-Year Plan” will come to an end. China is embarking upon a new era of high-quality development from high-speed growth, but short-term periodic fluctuations are inevitable. China is in the midst of a temporary economic shutdown due to the outbreak of COVID-19. Service industries may suffer huge losses and industrial output may be depressed as well, but the outbreak could only moderate rather than reverse such cyclical trajectories. With a policy package to stabilize growth, China has increased fiscal and monetary stimulus to mitigate the adverse impact of the epidemic on economic growth and corporate earnings. However, the virus outbreak softens demand from the rest of the world, and the global recession might trigger further plunges in the markets. China’s recovery will likely face more challenges. As domestic consumption and exports will take time to recover, investment will be the main growth stabilizer; new infrastructure is expected to enjoy new momentum and usher in major development opportunities. Looking forward, amid the external uncertainties and challenging operating environment, the Group is confident that the PRC economy remains on the trend of steady progress in the long run. In addition, the economy has entered a new cycle featured by accelerated shift in development mode and growth drivers, presenting a series of new opportunities brought about by the implementation of regional strategies such as Yangtze River Delta and Greater Bay Area as well as technology innovation and development. While continuing to adhere to the strategy of “making steady progress”, the Group will adopt a more prudent risk management framework in response to the possible huge impact from external markets in this year of extraordinary challenges. With the principle of customer first, the Group will focus on value creation and promote high-quality and large-scale development by strengthening technology empowerment and facilitating synergetic development of the licensed business and asset-based business. Meanwhile, the Group will make further improvements to its internal control system and increase efforts in enforcing self-inspiring and prudent internal controls, so as to balance the risks and returns, achieve balanced development with respect to scale, quality and efficiency, and develop itself into a wealth management and financial service institution with global influence and market competitiveness in the region, striving to create greater value for its clients and Shareholders.

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