山东国信(01697) - 2024 - 中期财报

Company Overview Company Profile, Shareholding Structure and Business Layout Shandong Guoxin, established in 1987, is a non-bank financial institution approved by the People's Bank of China and Shandong Provincial Government, listed on the Hong Kong Stock Exchange in 2017 as the first mainland trust company to enter the international capital market. Its controlling shareholder is Shandong Luxin Investment Holdings Group Co., Ltd. The company's business is structured around the "New Three Categories" reform, establishing three major divisions: Capital Market, Wealth Management, and Family Trust, covering family trusts, asset management, and asset services, with a network expanding to major cities like Jinan, Qingdao, Beijing, and Shanghai - The company positions itself as a professional wealth management institution based on asset allocation, committed to supporting the real economy, serving public welfare, and fulfilling social responsibilities[4][8] - The company was listed on the Main Board of the Hong Kong Stock Exchange (stock code: 1697.HK) in 2017, becoming the first domestic trust company listed on the international capital market[7][8] Shareholding Structure Overview (As of Mid-2024) | Shareholder Name | Shareholding Percentage | | :--- | :--- | | Shandong Luxin Investment Holdings Group Co., Ltd. | 48.13% | | CNPC Asset Management Co., Ltd. | 18.75% | | Jinan Jintou Holdings Group Co., Ltd. | 5.43% | | Shandong High-tech Venture Capital Co., Ltd. | 4.83% | | Shandong Gold Group Co., Ltd. | 1.72% | | Weifang Investment Group Co., Ltd. | 1.29% | | Jinan Energy Investment Co., Ltd. | 0.28% | | Other Public Shareholders | 19.57% | Key Financial Indicators Financial Data Summary For the six months ended June 30, 2024, the company's total operating income was RMB 588 million, a year-on-year decrease. Total profit was RMB 253 million, slightly lower than the same period last year. Total assets remained relatively stable at RMB 13.70 billion Key Financial Data (RMB Million) | Indicator | H1 2024 | H1 2023 | YoY Change | | :--- | :--- | :--- | :--- | | Total Operating Income | 588 | 836 | -29.7% | | Fee and Commission Income | 273 | 421 | -35.2% | | Total Profit | 253 | 276 | -8.3% | | Total Assets (Period-end) | 13,700 | 13,704 | -0.03% | Management Discussion and Analysis Environment and Business Review In H1 2024, facing a complex macro environment, the company maintained steady progress and firmly returned to its trust origins. Managed trust assets significantly grew to RMB 241.237 billion, up 19.77% from the beginning of the year, with securities investment trust business growing particularly fast at 73.10%. Family trust business also maintained strong growth, with existing scale increasing by 32% year-on-year. Despite business expansion, total operating income decreased by 29.7% to RMB 588 million, and net profit slightly decreased by 2.6% to RMB 171 million, due to reduced net fee and commission income and investment income - China's trust industry is accelerating its transformation from traditional private financing models to asset services and asset management models. As of the end of 2023, the industry's managed trust assets reached RMB 23.92 trillion[14] H1 2024 Key Business Scale Indicators | Business Indicator | Scale as of June-end 2024 (RMB Billion) | Change from Year-start/YoY | | :--- | :--- | :--- | | Managed Trust Assets | 241.237 | Up 19.77% from year-start | | Securities Investment Trust Business | >100 | Up 73.10% from year-start | | Family Trust Existing Scale | ≈47 | Up 32% YoY | | Green Trust Assets Existing Scale | 3.556 | - | H1 2024 Performance Overview (RMB Million) | Indicator | H1 2024 | H1 2023 | YoY Change | | :--- | :--- | :--- | :--- | | Total Operating Income | 587.8 | 836.2 | -29.7% | | Total Profit | 253.3 | 275.9 | -8.2% | | Net Profit | 170.5 | 175.1 | -2.6% | Business Segment Performance The company's business is divided into trust business and proprietary business. In H1 2024, trust business accounted for 46.0% of revenue, and proprietary business for 54.0%. Within trust business, investment-type trust assets significantly grew by 50.2% to RMB 127.285 billion, becoming the largest asset category. For proprietary business, the company prudently utilized its own funds, achieving segment income of RMB 317 million in H1, a year-on-year decrease mainly due to reduced investment income H1 2024 Segment Revenue Composition | Business Segment | Revenue (RMB Thousand) | Percentage | | :--- | :--- | :--- | | Trust Business | 270,866 | 46.0% | | Proprietary Business | 317,348 | 54.0% | | Total | 588,214 | 100.0% | Trust Business In H1 2024, trust business generated RMB 271 million in revenue. By management type, investment-type trust assets grew significantly from RMB 84.7 billion at the beginning of the year to RMB 127.3 billion, an increase of 50.2%, becoming the largest trust type by scale. Financing-type trusts remained the primary source of income, contributing RMB 151 million, accounting for 55.3% of trust business fee and commission income. The company made significant progress in core trust businesses such as family trusts, securities investment trusts, and charitable trusts Managed Asset Scale by Trust Type (RMB Million) | Trust Type | June 30, 2024 | December 31, 2023 | Change | | :--- | :--- | :--- | :--- | | Financing Trust | 41,627 | 43,845 | -5.1% | | Investment Trust | 127,285 | 84,725 | +50.2% | | Administration Trust | 50,825 | 56,982 | -10.8% | | Total | 219,737 | 185,552 | +18.4% | Income Generated by Trust Type (RMB Million) | Trust Type | H1 2024 Income | Percentage | H1 2023 Income | Percentage | | :--- | :--- | :--- | :--- | :--- | | Financing Trust | 151 | 55.3% | 263 | 62.5% | | Investment Trust | 77 | 28.2% | 82 | 19.5% | | Administration Trust | 45 | 16.5% | 76 | 18.0% | | Total | 273 | 100.0% | 421 | 100.0% | - Family trust business continues to lead, with over 4,600 cumulative setups and an existing scale of nearly RMB 47 billion as of June-end 2024[26] - Securities investment trust business expanded rapidly, with an existing scale exceeding RMB 100 billion as of June-end 2024[32] - Continuous innovation in public welfare and charitable trusts, including the first dual-trustee charitable trust in Shandong Province and the industry's first charitable trust with a foreign settlor, with 45 standardized charitable trusts established and a delivered scale of approximately RMB 148 million[36] Proprietary Business In H1 2024, the proprietary business segment generated RMB 317 million in revenue, a year-on-year decrease of 24.5%. This was primarily due to a significant reduction in investment income from RMB 134 million in the prior year to RMB 42.1 million, and net interest income turning negative. However, fair value change gains increased. In terms of asset allocation, the company continued to optimize its structure, with securities investments remaining the largest allocation at 79.7%, though the total amount decreased. Long-term equity investments increased - Proprietary business segment revenue decreased by 24.5% year-on-year, mainly due to reduced investment income and net interest income turning negative, partially offset by increased fair value change gains[37] Proprietary Asset Allocation (RMB Thousand) | Asset Category | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Monetary Asset Investments | 788,662 | 628,173 | | Securities Investments | 9,187,712 | 10,019,091 | | Long-term Equity Investments | 1,269,530 | 1,153,095 | | Proprietary Fund Loans | 173,368 | 115,627 | | Trust Industry Guarantee Fund | 113,962 | 111,448 | | Total | 11,533,234 | 12,027,434 | - The company made strategic long-term equity investments in several financial institutions, including Sinotruk Auto Finance, Taishan Property Insurance, Dezhou Bank, and Minsheng Securities[43][44] Financial Review In H1 2024, the group's net profit was RMB 171 million, a slight year-on-year decrease of 2.6%. Total operating income decreased by 29.7% to RMB 588 million, primarily due to significant year-on-year reductions in net fee and commission income and investment income. However, credit impairment losses decreased by 44.3% to RMB 155 million, and non-operating expenses significantly decreased due to reduced estimated litigation compensation, partially offsetting the negative impact on revenue. Consequently, operating profit margin increased from 33.0% to 43.1%, and net profit margin increased from 20.9% to 29.0% H1 2024 Consolidated Income Statement Summary (RMB Thousand) | Item | H1 2024 | H1 2023 | Reason for Change | | :--- | :--- | :--- | :--- | | Total Operating Income | 587,752 | 836,157 | Decrease in net fee and commission income, investment income | | Net Interest Income | -4,550 | 35,014 | Decrease in loan interest income | | Net Fee and Commission Income | 270,763 | 418,612 | Decrease in trust remuneration | | Investment Income | 42,144 | 133,775 | Decrease in investment income from financial assets held during the period | | Fair Value Change Gains | 241,813 | 212,071 | Increase in fair value change gains from equity investments, etc. | | Total Operating Expenses | 295,780 | 447,435 | Decrease in credit impairment losses, business and management expenses | | Credit Impairment Losses | 154,963 | 278,020 | Decrease in provisions based on credit risk assessment | | Non-operating Expenses | 39,107 | 115,722 | Significant decrease in estimated litigation compensation expenses | | Total Profit | 253,327 | 275,922 | Revenue decline partially offset by cost and expense decline | | Net Profit | 170,508 | 175,077 | Combined impact of total profit decline and reduced income tax expense | - Trust business total profit decreased from RMB 137 million to RMB 102 million, a 25.7% decrease, mainly due to reduced income. Proprietary business total profit increased from RMB 139 million to RMB 151 million, a 9.2% increase, mainly due to a significant reduction in credit impairment losses[62][63][65] - As of June 30, 2024, the group's total assets were RMB 13.70 billion, a 3.3% decrease from the beginning of the year. Major assets include debt investments (34.1%), financial assets held for trading (28.8%), and loans and advances (14.8%)[67] - The company holds 579 million A-shares of Zheshang Bank (representing 2.11% of its total share capital), with a fair value of RMB 1.562 billion as of June 30, 2024, accounting for 11.4% of the company's total assets[73] Risk Management The company has established a comprehensive risk management and internal control system, with an organizational structure covering the Board of Directors, Board of Supervisors, senior management, and various functional departments. Risk management encompasses credit risk, market risk, liquidity risk, compliance risk, operational risk, and reputational risk. During the reporting period, the company strictly adhered to regulatory requirements, utilized intelligent risk control systems to enhance decision-making capabilities, and continuously improved its anti-money laundering management mechanism. The Board of Directors has reviewed and deemed the group's risk management and internal control systems adequate and effective - The company has established a multi-level comprehensive risk management organizational structure covering the Shareholders' Meeting, Board of Directors, Board of Supervisors, General Manager's Office, and various functional departments[87][88] - The company faces key risks including macroeconomic and financial market fluctuations, changes in the regulatory environment, business portfolio structure, market competition, and interest rate environment changes[90][91][93][94][95] - The company has formulated and implemented the "Anti-Money Laundering Management Measures," established an anti-money laundering working group, and set up customer identification and suspicious transaction reporting systems[106][107] Capital and Human Resources Management The company manages capital based on net capital and risk capital to ensure compliance with regulatory requirements. As of June 30, 2024, all capital adequacy ratios met regulations. In human resources, the company continued to deepen market-oriented reforms, implementing a market-driven performance appraisal and incentive system. As of June 30, 2024, the company had 307 employees, a decrease of 27 from the same period last year, with 78.5% holding master's degrees or higher Capital Adequacy Ratios (As of June 30, 2024) | Indicator | Actual Value | Regulatory Requirement | | :--- | :--- | :--- | | Net Capital | Approx. RMB 9.0 billion | ≥ RMB 200 million | | Net Capital / Total Risk Capital | 280.2% | ≥ 100% | | Net Capital / Net Assets | 80.0% | ≥ 40% | Employee Structure (As of June 30, 2024) | Category | Number of Employees | Percentage | | :--- | :--- | :--- | | Total Employees | 307 | 100% | | By Function | | | | Trust Business Employees | 122 | 39.74% | | Wealth Management Employees | 53 | 17.26% | | Risk Control and Audit Employees | 47 | 15.31% | | By Education | | | | Doctorate and Above | 5 | 1.63% | | Master's Degree | 236 | 76.87% | | Bachelor's Degree | 61 | 19.87% | Future Outlook Looking ahead, despite global economic uncertainties, the fundamental long-term positive trend of the Chinese economy remains unchanged. The trust industry will accelerate its return to core business and transformation. Shandong Guoxin will continue to be guided by regulatory policies, firmly advance its transformation, focus on capital markets, family trusts, and wealth management as its three key business areas, enhance localized capabilities, serve the real economy and public welfare, and strive to build a new pattern of high-quality development - The company will focus on three key business areas: capital markets, family trusts, and wealth management, leveraging regional resources to excel in "five major articles" (tech finance, green finance, inclusive finance, elderly care finance, digital finance) in the future[113] Share Capital Changes and Major Shareholder Holdings Share Capital Structure and Major Shareholders As of June 30, 2024, the company's total share capital was 4,658,850,000 shares, with no changes during the reporting period, comprising 75% domestic shares and 25% H-shares. Among major shareholders, Shandong Provincial Department of Finance, through its controlled entities including Luxin Group, collectively held 52.96% of the company's shares, serving as the actual controller. CNPC Asset Management Co., Ltd. held 18.75% of the shares, making it the second-largest shareholder Share Capital Structure (As of June 30, 2024) | Share Class | Number of Shares | Percentage (%) | | :--- | :--- | :--- | | Domestic Shares | 3,494,115,000 | 75 | | H-Shares | 1,164,735,000 | 25 | | Total | 4,658,850,000 | 100 | Major Shareholder Holdings (As of June 30, 2024) | Shareholder Name | Share Class | Number of Shares Held | Percentage of Total Share Capital | | :--- | :--- | :--- | :--- | | Shandong Provincial Department of Finance (Interests of controlled corporations) | Domestic Shares | 2,467,202,580 | 52.96% | | CNPC Asset Management Co., Ltd. | Domestic Shares | 873,528,750 | 18.75% | | Jinan Jintou Holdings Group Co., Ltd. | H-Shares | 252,765,000 | 5.43% | Directors, Supervisors and Senior Management Changes in Directors, Supervisors and Senior Management During the reporting period, several changes occurred in the company's directors, supervisors, and senior management. Mr. Yue Zengguang officially assumed the role of Executive Director and Chairman on January 1, 2024. Following the Annual General Meeting in June 2024, the Board of Directors and Board of Supervisors underwent re-election, with several directors and supervisors not seeking re-election due to term expiry, and new members being elected. In senior management, Mr. Lin Guanwei was appointed as Deputy General Manager, while Mr. Cui Fang ceased to be Assistant General Manager due to term expiry - Mr. Yue Zengguang was approved by the Shandong Financial Regulatory Bureau on January 10, 2024, to officially serve as the company's Executive Director and Chairman[120] - The company completed the re-election of the Fourth Board of Directors and Board of Supervisors at the Annual General Meeting on June 27, 2024[120][122] - Mr. Fang Hao ceased to be Executive Director and General Manager due to term expiry. Mr. Wang Zengye and Mr. Zhao Zikun did not seek re-election as Non-executive Directors due to term expiry[120] - Mr. Lin Guanwei was approved to serve as the company's Deputy General Manager on July 24, 2024[123] Significant Matters Corporate Governance and Internal Control The company is committed to maintaining high standards of corporate governance and has adopted the HKEX Corporate Governance Code. During the reporting period, there was a brief deviation from the code's provision requiring separation of Chairman and Chief Executive roles due to the General Manager acting as Chairman and the Chairman acting as General Manager. The company has established a comprehensive risk management and internal control system, which the Board of Directors annually reviews and deems adequate and effective. Internal audit, led by the Audit Committee, conducts regular special inspections to ensure the company's healthy development - During the reporting period, due to personnel changes, the company briefly deviated from the Corporate Governance Code's provision on the separation of Chairman and Chief Executive roles, but the Board believes the checks and balances structure remains sufficient[125] - The Board of Directors bears ultimate responsibility for the establishment, soundness, and effective implementation of internal controls, and has reviewed and deemed the group's risk management and internal control systems adequate and effective[130][133] - The company's Board of Directors does not recommend the distribution of an interim dividend for 2024[134] Disclosure of Significant Matters During and after the reporting period, several significant matters occurred. The company's Articles of Association were revised in accordance with changes in Chinese regulations, removing provisions related to class shareholders and their meetings. Regarding litigation, as of June 30, 2024, the company was involved in 8 major lawsuits/arbitrations as plaintiff, totaling approximately RMB 1.72 billion; and 4 major lawsuits as defendant, totaling approximately RMB 794 million. Additionally, on August 8, 2024, the company reached an agreement with Guolian Securities to sell part of its equity in Minsheng Securities for approximately RMB 347 million, to be paid by issuing A-shares of Guolian Securities - The company revised its Articles of Association in accordance with changes in Chinese regulations and HKEX rules, removing provisions regarding class shareholders and the convening of class shareholder meetings[136][137] Major Litigation and Arbitration Cases (As of June 30, 2024) | Role | Number of Cases | Amount Involved (RMB) | | :--- | :--- | :--- | | Plaintiff/Applicant | 8 cases | Approx. RMB 1.72 billion | | Defendant | 4 cases | Approx. RMB 794 million | - On August 8, 2024, the company entered into an agreement with Guolian Securities to sell 132,715,017 shares of Minsheng Securities for a consideration of RMB 346.7 million, to be paid by newly issued A-shares of Guolian Securities. This transaction constitutes a discloseable transaction[140] Interim Financial Information Review Report Auditor's Review Opinion ShineWing Certified Public Accountants (Special General Partnership) reviewed the company's interim financial statements as of June 30, 2024. Based on the review, the auditor did not note any matters that would lead them to believe the financial statements were not prepared in all material respects in accordance with enterprise accounting standards, or that they failed to fairly present the company's financial position, operating results, and cash flows - ShineWing Certified Public Accountants issued an unmodified review conclusion, stating that the financial statements fairly present the company's financial position in all material respects[147]