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Public company info - Haitong Securities Co. Ltd. - H Shares , 06837.HK
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Haitong Securities Co. Ltd. - H Shares, 06837.HK - Company Profile
Chairman Zhou Jie
Share Issued (share) 3,410,000,000
Par Currency Renminbi
Par Value 1.0
Industry Securities
Corporate Profile Business Summary: The Company’s principal business lines comprise wealth management, investment banking, asset management, trading and institutional client services, and financial leasing. Performance for the year: In 2019, the Group realised an operating income of RMB51,552 million and a net profit of RMB9,523 million, the total assets of RMB636,794 million and the net asset attributable to the Company of RMB126,091 million. Business Review: 1.Wealth management business Market conditions As the market expectation and liquidity improved, domestic stock market trading volume increased significantly in 2019. According to WIND, the average daily turnover of stocks and funds in in Shanghai Stock Exchange and Shenzhen Stock Exchange amounted to RMB559,900 million in 2019, representing a year-on-year increase of 35.3%. Traditional brokerage business has bid farewell to the era of aggressive client acquisition, and shifted to wealth management business with a focus on exploiting the value of existing customers. In 2019, the margin financing and securities lending business ushered in a series of innovations such as the launch of the Sci-Tech Innovation Board, the improvement in long and short sell mechanism in the market, the increase of number of securities eligible for margin financing and short selling. The market size exceeded RMB1,000,000 million. The function of financing secured by stock pledge to serve the real economy was further strengthened, meanwhile the use of the proceeds of stock pledge secured financing and risk control indicators were further tightened. Operating measures and performance In 2019, the Company continued to strengthen its wealth management capabilities, and improved its wealth management service system. During the Reporting Period, the Company’s stock and fund trading volume amounted to RMB10,500,000 million, representing a year-on-year increase of 37.6%. The number of customers of the wealth management business totaled 11.49 million, representing a year-on-year increase of 10.7%. The customers’ assets at the end of the period totaled RMB1,830,000 million (tradable), representing an increase of 34.3% compared with the end of last year. The Company’s customer structure was further improved. The assets of high-net worth customers increasing by over 40% year-on-year. The users of “e-Haitong Cai” (e海通財) mobile platform topped 32 million. The monthly active users of the platform exceeded 3.5 million, ranking top five in the industry. 2.Investment banking business In 2019, the equity capital market witnessed the introduction of various major reforms, including the launch of the Sci-Tech Innovation Board with the pilot registration system, the introduction of new regulation on major asset restructuring, and public consultation on regulation governing secondary offering and fund raising. A-share equity capital market rebounded obviously in 2019. According to WIND, the issuance proceeds in A-share equity market (including IPO, secondary offering, rights issue, preference shares and convertible bonds) amounted to RMB1.5 trillion in 2019, representing a year-on-year increase of 26.6%. The issuance proceeds in Hong Kong IPOs amounted to RMB460,150 million, representing a year-on-year increase of 63.5%. Activities of domestic merger and acquisition market drop slightly. The total value of announced M&A transactions in the market was RMB2.5 trillion, representing a year-on-year decrease of 26.6%. The domestic bond issuances remained steady in 2019. The total underwritten amount was RMB45.2 trillion in 2019, increased by 3.07% over 2018. A total of 179 bonds defaulted, involving bonds amounting to over RMB140,000 million. Risk appetite level of investors decreased. Bonds coupon rates fell and market competition continued to optimize. 3.Asset management business Market conditions: As of the end of the Reporting Period, the regulation and policies respectively governing the wealth management subsidiaries of banks, the asset management business of securities companies, the asset management business insurance companies and other sub-industries have all been promulgated, reflecting the trend of unified, top-down regulatory oversight in terms of functions and operations under the top-level design. As these new regulations prohibit multi-levelling and channel business, the AUM of asset management business of securities companies, trusts companies, fund subsidiaries, the asset management business of futures companies and other institutions declined significantly. Only the AUM of private funds, mutual funds and the asset management business of insurance companies increased. As of the end of 2019, the total AUM in the domestic asset management market fell below RMB100 trillion and amounted to about RMB98.8 trillion. The AUM of asset management business of securities companies was RMB11 trillion, the AUM of asset management business of fund companies and their subsidiaries was RMB8.7 trillion and the AUM of asset management business of futures companies was RMB0.14 trillion, down by 34.83%, 36.68% and 44% respectively compared with those before the promulgation of the new regulations at the end of 2017. Operating measures and performance: Against the background of new regulations on asset management, the Company’s asset management business timely adjusted its strategy and seized the opportunities for development in the market. Both its AUM and income grew rapidly. As of the end of the Reporting Period, the AUM of the asset management business amounted to RMB1.21 trillion, representing a year-on-year increase of 23%. 4.Trading and institutional client services In 2019, CSI 300 Index rose 36.07% and Hang Seng Index rose 9.07%. During the Report Period, derivatives market rapidly expanded. The launch of CSI 300 ETF options and CSI 300 Stock Index Options further enriched the profit models and risk management approaches of the securities industry. In 2019, the general market condition was favorable thanking to the tendency of loose monetary policy, CSI Aggregate Bond Total Return Index rose 3.76% during the year. The unsecured credit bonds outperformed the interest rate bonds, and the number of corporate default increased as well. 5.Financial leasing business Market conditions: In 2019, China’s leasing industry was affected by factors such as the downward pressure of the macro economy and the tightening of the financial regulatory environment. The growth rate of the number of industry companies, registered capital and lease contract balances has slowed down, and the overall growth of the industry slowed down. In the long run, the penetration rate of the leasing business industry was still low. With the transformation and upgrading of the domestic economic structure, and the implementation of major national strategies, there was still room for further improvement. With the transformation of the regulatory regime of the leasing business, the industry has been showing an increasingly obvious tendency of survival of the fittest, and corporate differentiation has intensified. While maintaining the growth rate of assets, leading companies have demonstrated obvious advantages in terms of financing difficulty, asset quality, and profitability. In 2019, China’s prudent monetary policy has achieved remarkable results, and the scale of social financing has picked up. Financing channels and capital replenishment channels for leasing companies have gradually widened. Carrying out diversified financing through the capital market has gradually become one of the main financing channels for leasing companies. Operating measures and performance: Haitong UT successfully completed the H-share listing raising a total amount of HK$2,320 million, which made it the third listing platform of the Company on Hong Kong Stock Exchange. The listing of Haitong UT H-share enhanced its capital capability, further broadened its financing channels, which strongly supported further expansion and strategic implementation of its business, and further improved its brand image, popularity, and talents attraction, as well as encouraged it to continue to enhance its consolidate governance. As of the end of 2019, Haitong UT recorded a total asset of RMB99,047 million, non-performing asset ratio of 1.08% and provision coverage ratio for non-performing asset of 265.19%, which remained stable. Prospects: Development strategy of the Company Under the background of transformation, the Company’s overall development strategy is as follows: adhering to customer focus; focusing on intermediary businesses such as brokerage, investment banking and asset management as core businesses; developing capital intermediary business and investment business as the wings which will draw upon conglomeration, internationalisation and informatisation as the driving force; reinforcing the four “pillars” including compliance and risk management, talent, IT and research. Meanwhile, the Company will enhance its capability building in five areas including capital and investment management, investment banking underwriting and sales pricing, assets management, institutional brokerage and sales transaction and wealth management in order to build an intelligent Haitong. With the mission of developing a world-class investment bank, we are committed to transforming Haitong into a leading domestic and globally influential Chinese benchmark investment bank. Business plan The year 2020 is an important window period for comprehensive deepening reform of the capital market, which avails the Company crucial opportunities for the development of securities industry and is a critical period for the Company’s further consolidation and enhancing its industry-leading advantage. The Company will, under the guidance of overall development strategy, continue to firmly leverage upon the resilient fundamentals of Chinese economy, and continuously increase its efforts to serve the real economy, and play its part in realising the transformation and upgrading China’s economic structure, and to prevent financial risks and foster its core comprehensive financial services capabilities at home and abroad. The Company will actively seize the opportunities of new economic structure brought on from the benefits of reform, strengthen customer service, speed up project implementation and strive to increase revenue; meanwhile, the Company will integrate operation and management practice and continue to closely follow changes brought on by areas such as Sci-Tech Innovation Board, the piloted registration-based system, new regulations of asset management, transformation of wealth management, which may have material impacts on industry development; the Company strives to actively meet the challenges and capture the advantageous position in the market based on the development trends in investment banking, asset management and brokerage business industries; the Company vows to deepen its internal reform and take the initiative to embrace change, and put it focus on solving the problems of institutional mechanisms that may hinder the development of the Company, and motivate the enthusiasm and vitality of senior management and employees; the Company will steadily advance the construction of infrastructure in terms of science and technology, talents and systems, enhance its financial service abilities and capabilities and lay a solid foundation for the Company to achieve high quality and sustainable development.

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