耀才证券金融(01428) - 2022 - 中期财报

Corporate Information This section provides fundamental corporate information, including executive leadership, board committees, and key external partners like auditors and principal bankers Corporate Executives and Partners This section details the company's key corporate information, including board members, registered office, and principal business partners - The company's Chairman is Mr. Yip Mau Lam, and the Chief Executive Officer is Mr. Hui Yuk Bun[6] - The company's auditor is KPMG[9] - The company maintains business relationships with several major banks, including Bank of China (Hong Kong), Bank of Communications, Hang Seng Bank, and HSBC[9] Management Discussion and Analysis This section provides an overview of the market, operating performance, client growth, detailed revenue analysis, investment outcomes, operating expenses, and future strategic plans Market Review Hong Kong's economy recovered amid global improvements, with robust financial markets and significant IPO activity, despite challenges from inflation and geopolitical uncertainties - In the first three quarters of 2021, Hong Kong's total IPO fundraising reached HK$285.9 billion, a new high for the period, with full-year projections up to HK$500 billion[14] - As of June 2021, Hong Kong's stock market capitalization grew 39% year-on-year to HK$52.8 trillion, primarily driven by the return of Chinese concept stocks[12] - In Q2 and Q3, Hong Kong's average daily stock trading volume stabilized at HK$158.5 billion, a year-on-year increase of approximately 24%[14] - Tightening mainland regulatory policies and ongoing US-China tensions are identified as key uncertainties impacting future market trends[16][18] Operating Results For the six months ended September 30, 2021, the Group's revenue decreased by 2.8% to HK$567 million, and profit for the period fell 14.8% to HK$295 million, with increased investment in mobile trading applications Operating Results Summary | Metric | Six Months Ended September 30, 2021 | Six Months Ended September 30, 2020 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | HK$566.5 million | HK$582.9 million | -2.8% | | Profit for the Period | HK$294.9 million | HK$346.1 million | -14.8% | | Basic Earnings Per Share | 17.38 HK cents | 20.39 HK cents | -14.8% | | Interim Dividend | Not Distributed | Not Distributed | - | - The Group actively responded to market changes by increasing investment in FinTech, focusing on developing the 'Bright Smart Securities (Baobao)' and 'Bright Smart Futures (Doudou)' mobile applications, which successfully attracted hundreds of thousands of investors[23][24] Total Client Accounts and Assets As of September 30, 2021, the Group's client base expanded, with total client accounts growing 25.9% year-on-year to approximately 510,000 and total client assets increasing 27.8% to approximately HK$68.5 billion, indicating strong growth in client acquisition and asset management Client Accounts and Assets Summary | Metric | September 30, 2021 | September 30, 2020 | Year-on-Year Growth | | :--- | :--- | :--- | :--- | | Total Client Accounts | 510,957 | 405,761 | +25.9% | | Client Assets | Approx. HK$68.5 billion | Approx. HK$53.6 billion | +27.8% | - During the reporting period, the Group opened 28,544 new accounts (net of closed accounts)[25][26] Revenue Analysis Total revenue for the period was HK$567 million, a slight 2.8% year-on-year decrease, driven by growth in securities brokerage (+6.4%) and margin financing interest income (+55.9%), while futures brokerage and IPO-related revenues significantly declined Revenue Breakdown The Group's total revenue decreased by 2.8% year-on-year, with securities brokerage and margin financing interest income as primary sources, while IPO-related brokerage and financing interest income significantly declined by 44.1% and 60.9% respectively Revenue Composition | Revenue Source | 2021 H1 (HK$ '000) | Proportion | 2020 H1 (HK$ '000) | Proportion | Year-on-Year Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Securities Brokerage | 233,969 | 41.3% | 219,990 | 37.7% | +6.4% | | Hong Kong Futures and Options Brokerage | 58,220 | 10.3% | 62,460 | 10.7% | -6.8% | | Global Futures Brokerage | 34,525 | 6.1% | 53,754 | 9.2% | -35.8% | | IPO Brokerage | 11,972 | 2.1% | 21,416 | 3.7% | -44.1% | | IPO Financing Interest | 37,290 | 6.6% | 95,321 | 16.4% | -60.9% | | Margin Financing Interest Income | 177,908 | 31.4% | 114,092 | 19.6% | +55.9% | | Total | 566,523 | 100.0% | 582,891 | 100.0% | -2.8% | Securities Brokerage Benefiting from a 22.8% year-on-year increase in Hong Kong's overall stock market turnover, the Group's securities brokerage commission income grew steadily by 6.4% to HK$234 million, increasing its proportion of total revenue to 41.3% - Securities brokerage commission income was HK$234 million, a year-on-year increase of 6.4%[31][32] Hong Kong Futures and Options Brokerage Due to a contraction in Hong Kong's futures market, with a 14.5% year-on-year decrease in HKEX derivatives contract turnover, the Group's Hong Kong futures and options brokerage commission income fell 6.8% to HK$58.2 million - Hong Kong futures and options brokerage commission income was HK$58.2 million, a year-on-year decrease of 6.8%[34][35] Global Futures Brokerage Global futures brokerage commission income significantly declined by 35.8% year-on-year to HK$34.5 million, with its proportion of total revenue decreasing from 9.2% to 6.1% - Global futures brokerage commission income was HK$34.5 million, a year-on-year decrease of 35.8%[36][37] IPO Brokerage and Financing IPO market-related business revenue significantly contracted, with IPO brokerage commission income falling 44.1% to HK$12 million and IPO financing interest income sharply decreasing 60.9% to HK$37.3 million - IPO brokerage commission income decreased by 44.1% year-on-year to HK$12 million[41][45] - IPO financing interest income decreased by 60.9% year-on-year to HK$37.3 million[41][45] Margin Financing Margin financing business performed strongly, becoming a key revenue growth driver, with average daily margin loans surging 74.5% to HK$10.8 billion, boosting related interest income by 55.9% to HK$178 million - Margin financing interest income was HK$177.9 million, a year-on-year increase of 55.9%[46][48] - Average daily margin loans increased by 74.5% year-on-year to HK$10.8 billion[46][48] Investment Loss During the reporting period, the Group recorded an investment loss of HK$21.6 million from financial assets, compared to a HK$7.2 million gain in the prior period, with a period-end book value of HK$60.3 million for investments - Investment loss from financial assets at fair value through profit or loss (including realized and unrealized losses) was HK$21.6 million, compared to a HK$7.2 million gain in the prior period[47][49] Operating Expenses and Net Profit Margin Operating expenses decreased by 4.9% to HK$313 million, primarily due to reduced finance costs and advertising, but the net profit margin declined from 59.4% to 52.1% due to lower revenue and investment losses Operating Expenses and Net Profit Margin Summary | Metric | 2021 H1 | 2020 H1 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Operating Expenses | HK$313.4 million | HK$329.6 million | -4.9% | | Net Profit Margin | 52.1% | 59.4% | -7.3 percentage points | - The decrease in expenses was primarily due to reductions in finance costs (-17.8%), advertising and promotion expenses (-28.2%), and information and communication fees (-12.3%), partially offset by increases in staff costs (+20.3%) and miscellaneous expenses (+23.0%)[53] Future Plans The Group plans an aggressive development strategy, focusing on optimizing digital services, diversifying global financial products, expanding client base through enhanced marketing, and strengthening transaction system security and investor education - Strategic focus includes aligning with China-Hong Kong policies (e.g., Greater Bay Area plan), adopting an aggressive development strategy, and innovating products, services, and market offers to expand the client base[56][60] - Continued investment in FinTech aims to enhance the 'Bright Smart Securities (Baobao)' and 'Bright Smart Futures (Doudou)' apps, including adding US stock pre-market trading and launching '24-hour eDDA Direct Debit Service' to improve client experience[64][65] - Commitment to strengthening online trading security involves relocating the central computer system to HKEX's central data center and implementing security measures like 'two-factor authentication'[70][71] - The company undertakes investor education through its 'Bright Smart Finance Channel' live broadcasts, free investment seminars, and simulated competitions[59][61] Capital Structure, Liquidity and Financial Resources The Group maintains a robust financial position, primarily funded by equity, operating cash flow, and bank borrowings, with ample cash and bank balances, a reduced debt-to-asset ratio, and effective management of various financial risks Capital Structure, Liquidity and Financial Resources Summary | Metric | September 30, 2021 | March 31, 2021 | | :--- | :--- | :--- | | Bank Deposits, Balances and Cash | HK$630.7 million | HK$418.5 million | | Total Bank Borrowings | HK$7.6208 billion | HK$11.4360 billion | | Debt-to-Asset Ratio | 338.3% | 425.7% | | Net Current Assets | HK$2.0109 billion | HK$1.9439 billion | | Current Ratio | 1.2x | 1.1x | - The Group's credit risk primarily stems from receivables from clients, brokers, and clearing houses, managed through strict credit policies, collateral requirements, and daily monitoring[84][85][86] - As of September 30, 2021, the Group had 259 employees, with a compensation policy designed to offer competitive remuneration to motivate and retain talent[98][100] Other Information This section details directors' and major shareholders' interests, and confirms the company's adherence to corporate governance standards Interests of Directors and Corporate Governance This section discloses directors' and major shareholders' interests, with Chairman Mr. Yip Mau Lam holding approximately 63.85% of shares, and confirms the company's full compliance with corporate governance codes and securities dealing standards during the period - Chairman Mr. Yip Mau Lam, through his wholly-owned companies and personal beneficial ownership, collectively holds approximately 63.85% of the company's issued shares[105][107] - During the reporting period, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities[102][103] - The company confirmed full compliance with the Corporate Governance Code and the Model Code for Securities Transactions by Directors during the reporting period[114][115][116] - The company's Audit Committee reviewed this interim financial report with external auditor KPMG[117][119] Financial Statements This section presents the consolidated financial statements, including the statement of comprehensive income, financial position, cash flows, and detailed notes Consolidated Statement of Comprehensive Income For the six months ended September 30, 2021, the Group reported revenue of HK$567 million (-2.8% YoY), operating profit of HK$429 million (-14.3% YoY), and profit after tax of HK$295 million (-14.8% YoY), with basic earnings per share at 17.38 HK cents Consolidated Statement of Comprehensive Income Summary | Item (HK$ '000) | 2021 H1 | 2020 H1 | | :--- | :--- | :--- | | Revenue | 566,523 | 582,891 | | Operating Profit | 428,587 | 500,176 | | Profit Before Tax | 347,122 | 401,037 | | Profit for the Period | 294,911 | 346,053 | Consolidated Statement of Financial Position As of September 30, 2021, total assets decreased to HK$11.839 billion from HK$15.858 billion, primarily due to reduced receivables, while total liabilities decreased to HK$9.634 billion, and total equity increased to HK$2.205 billion Consolidated Statement of Financial Position Summary | Item (HK$ '000) | September 30, 2021 | March 31, 2021 | | :--- | :--- | :--- | | Total Non-Current Assets | 198,221 | 194,818 | | Total Current Assets | 11,641,036 | 15,663,569 | | Total Current Liabilities | 9,630,139 | 13,719,716 | | Net Current Assets | 2,010,897 | 1,943,853 | | Net Assets | 2,204,869 | 2,130,675 | | Total Equity | 2,204,869 | 2,130,675 | Condensed Consolidated Cash Flow Statement Net cash inflow from operating activities was HK$4.348 billion, primarily due to reduced receivables, while financing activities resulted in a net outflow of HK$4.173 billion, leading to a net increase in cash and cash equivalents of HK$205 million to HK$631 million at period-end Condensed Consolidated Cash Flow Statement Summary | Item (HK$ '000) | 2021 H1 | 2020 H1 | | :--- | :--- | :--- | | Net Cash from Operating Activities | 4,347,536 | (21,466,443) | | Net Cash from Investing Activities | 30,583 | 82,666 | | Net Cash (Used in)/from Financing Activities | (4,173,255) | 21,301,756 | | Net Increase/(Decrease) in Cash and Cash Equivalents | 204,864 | (82,021) | | Cash and Cash Equivalents at End of Period | 630,658 | 407,312 | Notes to the Unaudited Interim Financial Report The notes detail financial statement preparation, accounting policies, and item specifics, highlighting securities brokerage as the primary profit source, adequately collateralized margin client receivables, and significant related party transactions with the controlling shareholder - Segment reporting indicates that securities brokerage is the Group's primary profit source, contributing HK$424 million in reportable segment profit (EBIT) during the period[171] - Receivables from margin clients amounted to HK$9.03 billion, collateralized by securities with a total market value of HK$29.18 billion[182][185] - The Group has significant related party transactions with companies owned by Director and controlling shareholder Mr. Yip, primarily for office property leases, with right-of-use assets and lease liabilities of HK$25.47 million and HK$25.15 million respectively[242][245] Independent Auditor's Review Report This section contains the independent auditor's review report on the interim financial statements Independent Auditor's Review Report KPMG reviewed this interim financial report under Hong Kong Standard on Review Engagements, noting that the scope is less than an audit, thus no audit opinion is expressed; based on the review, no material non-compliance with HKAS 34 was identified - Review Conclusion: Based on the review, the auditors did not note any matter that causes them to believe the interim financial report is not prepared, in all material respects, in accordance with Hong Kong Accounting Standard 34 'Interim Financial Reporting'[259][260]