国泰海通(02611) - 2020 - 中期财报

Definitions This section provides definitions for terms used throughout the report Company Profile and Key Financial Indicators Company Information Guotai Junan Securities Co., Ltd. provides its basic information and extensive business qualifications across various regions - The company possesses comprehensive business qualifications, covering securities brokerage, investment banking, asset management, margin financing and securities lending, options market making, and cross-border business, along with innovative qualifications such as OTC options primary dealer and fund investment advisory pilot programs[9][10][11] - The company's controlled subsidiaries, such as Guotai Junan International, Guotai Junan Asset Management, and Guotai Junan Futures, also hold complete business licenses in their respective fields, supporting the group's diversified and international development[13][15][16] Key Accounting Data and Financial Indicators In H1 2020, the Group's total revenue grew 13.81% to CNY 20.848 billion, with profit attributable to equity holders up 8.64% Key Financial Data for H1 2020 | Major Financial Indicators | Current Period (Jan-Jun) | Prior Period | YoY Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue and Other Income (CNY thousand) | 20,848,145 | 18,318,179 | 13.81 | | Operating Profit (CNY thousand) | 7,325,537 | 6,724,140 | 8.94 | | Profit Attributable to Equity Holders of the Company (CNY thousand) | 5,453,713 | 5,020,115 | 8.64 | | Net Cash from Operating Activities (CNY thousand) | -15,544,131 | 9,122,641 | N/A | | Basic Earnings Per Share (CNY/share) | 0.58 | 0.54 | 7.41 | | Weighted Average Return on Net Assets (%) | 4.16 | 4.03 | Up 0.13 percentage points | Key Balance Sheet Data as of June 30, 2020 | Indicator | As of Current Period End | As of Prior Year End | Change from Prior Year End (%) | | :--- | :--- | :--- | :--- | | Total Assets (CNY thousand) | 623,022,247 | 559,314,278 | 11.39 | | Total Liabilities (CNY thousand) | 481,714,734 | 413,220,455 | 16.58 | | Equity Attributable to Equity Holders of the Company (CNY thousand) | 132,266,977 | 137,501,490 | -3.81 | Parent Company Net Capital and Risk Control Indicators | Item | As of Current Period End | As of Prior Year End | | :--- | :--- | :--- | | Net Capital (CNY thousand) | 89,338,264 | 85,971,493 | | Net Assets (CNY thousand) | 119,989,759 | 126,344,316 | | Risk Coverage Ratio (%) | 301.52 | 271.23 | | Capital Leverage Ratio (%) | 28.36 | 19.97 | | Liquidity Coverage Ratio (%) | 314.52 | 258.18 | | Net Stable Funding Ratio (%) | 146.58 | 146.85 | Business Overview Main Businesses, Operating Model, and Industry Overview The company's main businesses, including institutional and personal finance, drove H1 2020 revenue growth, seeing rapid industry development opportunities H1 2020 Main Business Revenue Composition | Main Business Category | Total Revenue and Other Income (CNY thousand) | YoY Growth (%) | Contribution to Total Revenue and Other Income (%) | | :--- | :--- | :--- | :--- | | Institutional Finance | 9,744,208 | 28.88 | 46.74 | | Personal Finance | 7,356,269 | 19.47 | 35.29 | | Investment Management | 1,447,092 | -26.15 | 6.94 | | International Business | 1,720,371 | -17.36 | 8.25 | | Other | 580,205 | 3.89 | 2.78 | | Total | 20,848,145 | 13.81 | 100.00 | - The company believes that after a downturn from 2015-2018, China's securities industry has re-entered an upward trend, presenting long-term opportunities for rapid development characterized by business diversification, differentiated growth, international competition, and technology-driven operations[29] Explanation of Significant Changes in Major Assets As of June 2020, the Group's total assets grew 11.39% to CNY 623.022 billion, driven by increased cash and financial assets - As of June 2020, the Group's total assets increased by 11.39% to CNY 623.022 billion compared to the end of the previous year[31] - Key asset changes include: * Cash held on behalf of brokerage clients: Increased by 27.13%, primarily due to higher client trading settlement funds * Financial assets at fair value through profit or loss: Increased by 16.64%, mainly due to the Group's adjustment of trading and investment structure * Financial assets purchased under resale agreements: Decreased by 11.91%, primarily due to a reduction in the Group's stock pledge business scale Core Competitiveness Analysis The company's core competitiveness stems from robust risk management, leading market position, and significant technology investment - The company maintains a prudent risk culture, having received the A-class AA regulatory rating from the China Securities Regulatory Commission for 12 consecutive years, and was granted the first batch of consolidated supervision pilot qualifications in March 2020[32] - The company's key operating indicators are among the industry's top performers; in H1 2020, its total assets, net assets, net capital, and operating revenue ranked 2nd, 2nd, 1st, and 2nd respectively in the industry, according to the Securities Association of China[33] - The company highly prioritizes technology investment, with information system investment ranking 1st in the industry for three consecutive years from 2017-2019; by period-end, Junhong APP mobile users reached 35.18 million, with 4.78 million monthly active users, ranking 2nd in the industry[34] Board of Directors' Report Overall Business Performance In H1 2020, the Group's operating performance steadily improved, maintaining strong business competitiveness, AA regulatory rating, and stable international credit ratings - The company has received the AA classification rating from the China Securities Regulatory Commission for 12 consecutive years and maintains S&P BBB+ and Moody's Baa1 international credit ratings, both with a stable outlook[35] Analysis of Main Businesses In H1 2020, the company's main business segments performed robustly, with strong performance across investment banking, wealth management, and international operations Investment Banking Business In H1 2020, investment banking achieved rapid underwriting growth, with securities lead underwriting reaching CNY 297.06 billion, up 54.0%, ranking 3rd H1 2020 Investment Banking Business Scale | Item | Current Period | Prior Period | | :--- | :--- | :--- | | IPO | | | | Lead Underwriting Count | 3 | 2 | | Lead Underwriting Amount (CNY 100 million) | 25.3 | 17.1 | | Refinancing | | | | Lead Underwriting Count | 17 | 9 | | Lead Underwriting Amount (CNY 100 million) | 279.6 | 212.5 | | Corporate Bonds | | | | Lead Underwriting Count | 18 | 1 | | Lead Underwriting Amount (CNY 100 million) | 87.2 | 4.5 | | Company Bonds | | | | Lead Underwriting Count | 170 | 96 | | Lead Underwriting Amount (CNY 100 million) | 807.2 | 672.6 | - During the reporting period, the Group's securities lead underwriting count was 940, a 49.7% increase year-on-year, with a lead underwriting amount of CNY 297.06 billion, a 54.0% increase year-on-year, both ranking 3rd in the industry[37] Research and Institutional Brokerage Business Institutional client service capabilities steadily improved, with client accounts reaching 45,000 and custody outsourcing ranking 2nd in the securities industry - Key metrics include: * Institutional Client Accounts: 45,000, a 5.8% increase from the end of the previous year * PB System Client Asset Scale: CNY 175.15 billion, a 48.4% increase from the end of the previous year * Custody and Outsourcing Product Scale: CNY 1.2453 trillion, an 11.7% increase from the end of the previous year, ranking 2nd in the industry * Custody Public Fund Scale: CNY 85.2 billion, continuing to rank 1st among securities firms Trading and Investment Business Trading and investment business focused on low-risk strategies, with OTC derivatives growing rapidly by 133% to CNY 230.84 billion and interest rate swaps ranking 1st - OTC derivatives business experienced rapid growth, with new scale reaching CNY 230.84 billion during the reporting period, a 133% increase year-on-year[45] - Key metrics include: * OTC Options: Cumulative new notional principal of CNY 58.63 billion, a 62.0% increase year-on-year * Total Return Swaps: New notional principal of CNY 13.72 billion, a 1,231.6% increase year-on-year * Interest Rate Swaps: New scale of CNY 799.77 billion, ranking 1st in the industry Credit Business Credit business maintained stable operations, with stock pledge and margin financing balances ranking 3rd in the industry Stock Pledge and Agreed Repurchase Business Scale (CNY 100 million) | Item | As of Current Period End | As of Prior Year End | | :--- | :--- | :--- | | Stock Pledge Outstanding Repurchase Balance | 388.2 | 410.7 | | Of which: Stock Pledge Repurchase Funds Lent | 319.6 | 328.5 | | Agreed Repurchase Transaction Outstanding Repurchase Balance | 6.6 | 7.1 | Margin Financing and Securities Lending Business Scale (CNY 100 million) | Item | As of Current Period End | As of Prior Year End | | :--- | :--- | :--- | | Funds Lent Balance | 663.0 | 616.4 | | Securities Lent Market Value | 29.7 | 15.8 | Wealth Management Business Wealth management accelerated transformation, with securities brokerage net income ranking 1st, Junhong APP users reaching 35.18 million, and Guotai Junan Futures client equity rising to 2nd - During the reporting period, the company's market share for net income from securities brokerage business (including seat leasing) was 5.79%, continuing to rank 1st in the industry[54] - Guotai Junan Futures' client equity scale reached CNY 34.1 billion by period-end, a 38% increase from the end of the previous year, with its industry ranking rising to 2nd[57] Investment Management Guotai Junan Asset Management's active AUM ranked 2nd, reaching CNY 403.6 billion, while Huaan Fund's AUM grew 14.2% to CNY 467.16 billion Guotai Junan Asset Management AUM (CNY 100 million) | Item | As of Current Period End | As of Prior Year End | | :--- | :--- | :--- | | Asset Management Business Scale | 6,432 | 6,974 | | Of which: Active Management Scale | 4,036 | 4,200 | - According to the Asset Management Association of China, Guotai Junan Asset Management's average monthly active asset management scale ranked 2nd in the industry in H1 2020[62] - Huaan Fund's AUM reached CNY 467.16 billion by period-end, a 14.2% increase from the end of the previous year, with public fund management scale at CNY 415.77 billion, an 18.2% increase from the end of the previous year[67] International Business International business, primarily through Guotai Junan International, maintained leading competitiveness among Hong Kong-based Chinese brokerages, with wealth management AUM reaching HKD 22.2 billion Guotai Junan International Business Revenue Composition (HKD thousand) | Item | Current Period | Prior Period | | :--- | :--- | :--- | | Fees and Commission Income | 543,164 | 754,441 | | Loan and Financing Income | 518,275 | 558,649 | | Financial Products, Market Making, and Investment Income | 736,350 | 1,008,945 | | Total Revenue | 1,797,789 | 2,322,035 | Financial Statement Analysis In H1 2020, the Group's total revenue grew 13.81%, total expenses increased 16.63%, and net cash from operating activities was a CNY 15.544 billion outflow - Total revenue and other income increased by 13.81% year-on-year, primarily driven by: * Fee and commission income: Increased by 10.32% year-on-year due to higher securities market trading volume * Interest income: Increased by 14.08% year-on-year due to higher income from margin financing and securities lending business * Other income and gains: Increased by 34.70% year-on-year, mainly due to higher income from futures commodity business[70] - Total expenses increased by 16.63% year-on-year, primarily driven by: * Other operating expenses: Increased by 65.15% year-on-year, mainly due to higher costs in the futures commodity business[71] - Net cash outflow from operating activities was CNY 15.544 billion, primarily due to a CNY 24.138 billion increase in cash held on behalf of brokerage clients and a CNY 22.855 billion increase in investments in financial instruments at fair value[72] Analysis of Major Controlled and Investee Companies This section outlines the operating performance of Guotai Junan's major controlled and investee companies, most of which achieved profitability in H1 2020 H1 2020 Operating Performance of Major Controlled and Investee Companies (CNY 100 million) | Company Name | Total Assets | Net Assets | Operating Revenue | Net Profit | | :--- | :--- | :--- | :--- | :--- | | Guotai Junan Financial Holdings | 1,212.17 | 126.51 | 10.75 | 4.57 | | Guotai Junan Asset Management | 69.09 | 54.87 | 10.05 | 3.74 | | Guotai Junan Futures | 393.69 | 36.47 | 32.18 | 1.64 | | Guotai Junan Innovation Investment | 84.08 | 74.09 | 1.67 | 0.84 | | Guotai Junan Zhengyu | 25.00 | 23.46 | 3.80 | 2.52 | | Shanghai Securities | 386.23 | 73.92 | 7.75 | 2.36 | | Huaan Fund | 41.94 | 30.23 | 11.56 | 2.80 | Risk Management The company established a comprehensive four-tier risk management system covering various risks, with all risk indicators operating stably and overall risk controllable - The company has established a four-tier risk management framework, comprising the Board of Directors (highest decision-making body), management, risk management department, and other business departments and branches, ensuring comprehensive and effective risk management[95][96][98][99] H1 2020 Group Value at Risk (VaR) (CNY ten thousand) | Category | June 30, 2020 | December 31, 2019 | H1 2020 Average | | :--- | :--- | :--- | :--- | | Equity Price Sensitive Financial Instruments | 13,568 | 18,230 | 15,166 | | Interest Rate Sensitive Financial Instruments | 37,961 | 9,106 | 29,064 | | Overall Portfolio VaR | 33,341 | 24,752 | 29,629 | - As of H1 2020, the company's credit risk was generally controllable, with an average performance guarantee ratio of 277% for stock pledge business and an average maintenance margin ratio of 282% for margin financing and securities lending business[106] - In H1 2020, the company's liquidity coverage ratio and net stable funding ratio both met regulatory requirements, indicating a sound overall liquidity position[108] Significant Matters Equity Incentive Plan The company launched a draft A-share restricted stock incentive plan for key personnel, approved by the Board and Shanghai SASAC, while a subsidiary's option scheme expired - In June 2020, the company's Board of Directors and Supervisory Board approved the 'Guotai Junan Securities Co., Ltd. A-share Restricted Stock Incentive Plan (Draft)', which has received in-principle consent from the Shanghai State-owned Assets Supervision and Administration Commission (SASAC)[125] Significant Related Party Transactions The company engaged in ordinary related party transactions with financial institutions and co-initiated the Guotai Junan Mother Fund, subscribing CNY 4 billion, with all transactions adhering to market principles - The company, along with related parties, co-initiated the first phase of the Guotai Junan Mother Fund, with a total subscribed capital of CNY 8.008 billion, of which the company subscribed CNY 4 billion[137] Major Related Party Transactions with SPD Bank (CNY) | Related Party Transaction Content | Amount for Current Period | Amount for Prior Period | | :--- | :--- | :--- | | Interest Income from Deposits with Financial Institutions | 79,433,158 | 171,084,398 | | Interest Expense on Funds Borrowed | 11,795,972 | 1,853,389 | | Bond Interest Expense | 6,485,310 | 3,632,877 | Convertible Corporate Bonds The company issued CNY 7 billion A-share convertible bonds in 2017, with CNY 6.9997 billion outstanding, and both the company's and bond's credit ratings are AAA with a stable outlook - The company issued CNY 7 billion convertible bonds in July 2017, with an outstanding unconverted amount of CNY 6.9997 billion as of the end of the reporting period[150][152] - Shanghai Brilliance Credit Rating & Investors Service maintained the company's corporate credit rating at AAA and the A-share convertible bond rating at AAA, with a stable outlook[154] Other Significant Matters The company addressed horizontal competition with Shanghai Securities, its controlling shareholder increased H-share holdings, and it actively contributed to COVID-19 relief efforts, securing new business qualifications - To resolve horizontal competition, the company plans to reduce its shareholding in Shanghai Securities from 51% to 24.99% through a private placement by Shanghai Securities; this transaction is pending approval from the China Securities Regulatory Commission[158][159] - The company's controlling shareholder, International Group, cumulatively increased its holdings of the company's H-shares by 41,193,600 shares from January 9 to June 30, 2020[160] - The company actively fulfilled its social responsibility in combating the pandemic, urgently donating CNY 20 million to establish a special fund, with employees cumulatively donating over CNY 4 million[162] Changes in Ordinary Shares and Shareholder Information Changes in Share Capital During the reporting period, the company's total share capital slightly increased by 409 shares due to A-share convertible bond conversions - During the reporting period, the company's total share capital increased by 409 shares as CNY 8,000 of A-share convertible bonds were converted into the company's A-shares[171] Shareholder Information As of period-end, the company had 167,170 ordinary shareholders, with the top three being Shanghai State-owned Assets Operation, HKSCC Nominees, and Shanghai International Group Top Ten Shareholders' Shareholding | Full Name of Shareholder | Number of Shares Held at Period End | Proportion (%) | | :--- | :--- | :--- | | Shanghai State-owned Assets Operation Co., Ltd. | 1,900,963,748 | 21.34 | | HKSCC Nominees Limited | 1,391,677,520 | 15.62 | | Shanghai International Group Co., Ltd. | 682,215,791 | 7.66 | | Shenzhen Investment Holdings Co., Ltd. | 609,428,357 | 6.84 | | China Securities Finance Corporation Limited | 260,547,316 | 2.92 | Share Repurchases, Sales, or Redemptions The company executed multiple securities repurchases and redemptions, including CNY 5 billion perpetual subordinated bonds and 88.9999 million A-shares for its equity incentive plan - The company completed the redemption of CNY 5 billion in principal amount of '15 Guojun Y2' perpetual subordinated bonds on April 3, 2020[188] - From June to July 2020, the company cumulatively repurchased 88.9999 million A-shares through centralized bidding, representing 0.9991% of total share capital, for a total of CNY 1.543 billion, to be used for the restricted stock equity incentive plan[189] Preferred Shares Information Not Applicable During the reporting period, the company had no preferred shares related information - The company had no preferred shares related information during the current reporting period[193] Directors, Supervisors, and Senior Management Changes in Directors, Supervisors, and Senior Management Significant personnel changes occurred within the company's Board and Supervisory Board, with new appointments for Chairman, Executive Director, Non-executive Director, and Supervisory Board Chairperson - Key changes include: * He Qing: Elected Chairman and Executive Director * Liu Xinyi: Elected Non-executive Director * Li Zhongning: Elected Supervisor, later elected Chairperson of the Supervisory Board Employee Information As of June 30, 2020, the Group had 15,063 employees, with a performance-based compensation system and increased online training due to the pandemic - As of June 30, 2020, the Group had 15,063 employees[200] - In H1 2020, the average learning time per employee reached 41.73 hours, a 55.88% increase year-on-year[200] Corporate Bonds Information Basic Information on Corporate Bonds This section details the company's outstanding corporate bonds issued in mainland China and Hong Kong, with all bond payments and redemptions completed on time - The company disclosed details of multiple corporate bonds listed on the Shanghai Stock Exchange and Hong Kong Stock Exchange, including fixed and floating rate bonds with maturities ranging from 2020 to 2023[201][202][203] Use of Proceeds As of June 30, 2020, all corporate bond proceeds were fully utilized to supplement working capital, consistent with committed uses - As of June 30, 2020, all corporate bond proceeds were used to supplement the company's working capital, consistent with the uses committed in the offering circular[207] Corporate Bond Ratings Shanghai Brilliance Credit Rating maintained the company's and its corporate bonds' credit ratings at AAA with a stable outlook - Shanghai Brilliance Credit Rating & Investors Service maintained the company's corporate credit rating at AAA and all relevant corporate bond credit ratings at AAA, with a stable outlook[208][209] Bank Credit Facilities As of June 2020, the company had approximately CNY 447 billion in total credit facilities from major banks, indicating ample financing capacity Bank Credit Facilities (CNY 100 million) | Item | Amount | | :--- | :--- | | Total Credit Limit | Approx. 4,470 | | Utilized Limit | Approx. 641 | | Remaining Limit | Approx. 3,829 | Interim Condensed Consolidated Financial Statements Interim Condensed Consolidated Statement of Profit or Loss For H1 2020, the Group's total revenue was CNY 20.848 billion, up 13.81%, with profit attributable to equity holders at CNY 5.454 billion, up 8.64% Summary of Interim Condensed Consolidated Statement of Profit or Loss (CNY thousand) | Item | For the six months ended June 30, 2020 | For the six months ended June 30, 2019 | | :--- | :--- | :--- | | Total Revenue and Other Income | 20,848,145 | 18,318,179 | | Operating Profit | 7,325,537 | 6,724,140 | | Profit Before Income Tax | 7,354,519 | 6,866,837 | | Profit for the Period | 5,732,269 | 5,337,141 | | Profit Attributable to Equity Holders of the Company | 5,453,713 | 5,020,115 | Interim Condensed Consolidated Statement of Financial Position As of June 30, 2020, the Group's total assets were CNY 623.022 billion, up 11.39%, with total liabilities at CNY 481.715 billion, up 16.58% Summary of Interim Condensed Consolidated Statement of Financial Position (CNY thousand) | Item | June 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | Total Assets | 623,022,247 | 559,314,278 | | Total Non-current Assets | 119,846,083 | 114,500,561 | | Total Current Assets | 503,176,164 | 444,813,717 | | Total Liabilities | 481,714,734 | 413,220,455 | | Total Current Liabilities | 417,763,094 | 351,422,945 | | Total Non-current Liabilities | 63,951,640 | 61,797,510 | | Total Equity | 141,307,513 | 146,093,823 | | Equity Attributable to Equity Holders of the Company | 132,266,977 | 137,501,490 | Interim Condensed Consolidated Statement of Cash Flows In H1 2020, the Group reported a CNY 15.544 billion net cash outflow from operating activities, with net inflows from investing and financing activities Summary of Interim Condensed Consolidated Statement of Cash Flows (CNY thousand) | Item | For the six months ended June 30, 2020 | For the six months ended June 30, 2019 | | :--- | :--- | :--- | | Net Cash (Used in)/Generated from Operating Activities | (15,544,131) | 9,122,641 | | Net Cash Generated from/(Used in) Investing Activities | 2,811,301 | (12,065,355) | | Net Cash Generated from Financing Activities | 8,017,973 | 13,330,557 | | Net (Decrease)/Increase in Cash and Cash Equivalents | (4,714,857) | 10,387,843 | | Cash and Cash Equivalents at Beginning of Period | 45,771,060 | 37,947,251 | | Cash and Cash Equivalents at End of Period | 41,179,740 | 48,362,461 | Reference Documents This section lists all reference documents pertinent to the report Securities Company Information Disclosure Significant Administrative Licensing Matters During the reporting period, the company obtained several key administrative licenses, including approval for new branches and pilot fund investment advisory business - Key administrative licenses obtained: * February 28, 2020: Received a reply from the China Securities Regulatory Commission, approving the company to pilot fund investment advisory business * June 29, 2020: Received approval from the Shanghai State-owned Assets Supervision and Administration Commission (SASAC), consenting to the company's implementation of the restricted stock incentive plan Regulatory Classification Results According to the regulatory classification, the company's 2019 classification result was A-class AA, maintaining the highest industry rating - The company's 2019 classification rating was: A-class AA[370]