Financial Performance - In 2020, Huaxing Capital's net profit exceeded RMB 1 billion for the first time, achieving a year-on-year growth of 320.5% and an annual return on equity of 18.8%[23]. - Total revenue for 2020 was RMB 1,589.3 million, up from RMB 1,304.1 million in 2019, while total operating expenses increased to RMB 1,606.1 million from RMB 1,183.7 million[32]. - The operating profit for 2020 was RMB 1,125.4 million, compared to RMB 438.0 million in 2019, and the profit before tax was RMB 1,160.4 million, up from RMB 388.6 million[32]. - The company declared a dividend of RMB 0.38 per share for 2020, representing a payout ratio of 20%[27]. - The total revenue and net investment income for the year ended December 31, 2020, was RMB 2,731.4 million, an increase of 68.4% compared to RMB 1,621.7 million in 2019[88]. - The adjusted net profit attributable to the company’s owners increased from RMB 322.4 million to RMB 1,085.9 million, excluding unrealized gains[102]. - Operating profit surged from RMB 438.0 million to RMB 1,125.4 million, reflecting significant growth in operational performance[91]. - Net profit attributable to owners for the year ended December 31, 2020, was RMB 1,037,752,000, up from RMB 246,778,000 in 2019, reflecting a growth of approximately 320.5%[192]. Investment Management - The investment management segment accounted for 50% of the group's revenue in 2020, with total assets under management exceeding RMB 57 billion[23]. - The investment management strategy is research-driven, which helps shape industry focus and client selection for the investment banking segment[15]. - The company has developed its own ecosystem for value creation in new economy companies, leveraging private equity advisory services as a flow entry point for clients[15]. - The investment management income is derived mainly from management fees and carried interest from the funds[162]. - The internal rate of return for proprietary funds was 43.0%, while for third-party funds it was 17.1% as of December 31, 2020[58]. - The unrealized carried interest income rose by 624.5% from RMB 461.4 million for the year ended December 31, 2019, to RMB 3,343.4 million for the year ended December 31, 2020, attributed to the appreciation of portfolio companies under the investment management business[70]. Revenue Growth - Investment banking revenue and net investment income increased to RMB 1,003.6 million, up 44.3% from RMB 695.3 million in 2019, driven by increased IPOs and advisory fees[50]. - Investment management revenue surged by 127.8% to RMB 1,374.1 million from RMB 603.1 million in 2019, reflecting strong performance in managed funds[42]. - The operating profit for the investment management segment increased to RMB 952.3 million, a growth of 218.4% from RMB 299.1 million in 2019[43]. - The total unrealized net carried interest for the year was RMB 1,090.2 million, compared to RMB 140.9 million in 2019, indicating a strong performance in fund management[35]. Operational Efficiency - The company has established a strong track record of creating significant value for clients, partners, and shareholders over the past 16 years, aligning its interests with theirs[19]. - The company’s business scale has approximately doubled every three years, successfully executing its growth strategy despite short-term market fluctuations[19]. - The company aims to become the preferred partner for clients pursuing excellence, focusing on long-term relationships rather than just individual transactions[19]. - The company is positioned as a unique entity in the secondary market, allowing investors to participate in the rapid value creation of new economy companies in the primary market[19]. Cash Flow and Financing - The net cash generated from operating activities was RMB 340.1 million, based on a profit before tax of RMB 1,160.4 million, adjusted for non-cash and non-operating items totaling RMB 943.0 million[106]. - The net cash used in investing activities for the year ended December 31, 2020, was RMB 521.4 million, primarily due to net receivables of RMB 538.7 million and purchases of financial assets totaling RMB 276.2 million[108]. - The net cash used in financing activities for the year ended December 31, 2020, was RMB 95.7 million, mainly due to share repurchase payments of RMB 147.9 million and dividend payments of RMB 79.9 million[111]. - The company maintained a cash balance of RMB 4.3 billion as of December 31, 2020, with RMB 2.9 billion attributed to Huaxing Securities, which is expected to benefit from a newly acquired proprietary investment license[26]. Employee and Compensation - The total employee compensation expenses, including share-based payment expenses, for the year ended December 31, 2020, were RMB 1,098.8 million, representing a 42.1% increase from the previous year[128]. - The company had a total of 653 full-time employees as of December 31, 2020, with over 83% being consultants and investment professionals[123]. Risks and Compliance - The company faces significant risks including intense competition in the financial services industry and potential challenges from the macroeconomic environment due to COVID-19[146]. - The company has complied with the relevant laws and regulations, with no significant violations reported for the year ended December 31, 2020[145]. - The company has disclosed related party transactions in accordance with the listing rules[147]. - The company has confirmed strict compliance with the relevant provisions of the listing rules and the exemptions granted at the time of its listing[178]. Assets and Liabilities - Total assets increased to RMB 11,537,329 thousand in 2020 from RMB 9,510,430 thousand in 2019, representing a growth of 21.3%[194]. - Total liabilities rose to RMB 4,155,351 thousand in 2020, up from RMB 2,838,285 thousand in 2019, indicating an increase of 46.5%[194]. - The company's debt-to-asset ratio as of December 31, 2020, was 24.8%, an increase from 10.4% as of December 31, 2019, primarily due to an increase in repurchase financing assets[115].