Huaan Securities(SH:600909)2018-08-24 16:00Financial Performance - The company's operating revenue for the first half of the year was approximately CNY 810.12 million, a decrease of 19.44% compared to the same period last year[36]. - Net profit attributable to shareholders of the parent company was CNY 244.97 million, down 39.73% year-on-year[37]. - The basic earnings per share decreased by 36.36% to CNY 0.07 compared to CNY 0.11 in the previous year[36]. - The net cash flow from operating activities was CNY 38.26 million, a significant decrease of 97.64% from CNY 1.62 billion in the same period last year[36]. - The company's total profit for the first half of 2018 was CNY 312,913,636.22, down 41.18% from CNY 531,982,671.34 in the first half of 2017[44]. - The company's net interest income decreased by 50.28% to CNY 146,701,127.38 in the first half of 2018 from CNY 295,067,570.68 in the same period of 2017[44]. - The company's total assets at the end of the reporting period were CNY 46.58 billion, an increase of 16.71% from the previous year[36]. - Total liabilities increased by 24.58% to CNY 34.05 billion compared to the previous year[36]. - The company's interest expenses increased by CNY 236 million, a rise of 112% year-on-year, due to rising market funding costs and business expansion[37]. - The liquidity coverage ratio was 324.89%, down from 516.29% in the previous year[39]. Risk Management - The company is facing increased credit risk pressures due to frequent credit defaults and tightening macroeconomic conditions[7]. - Huaan Securities is committed to enhancing its internal control and risk management systems to ensure operations remain within manageable risk levels[8]. - The company is actively monitoring and managing risks associated with policy changes, operational challenges, and liquidity issues[7]. - The company faces various risks including market risk, credit risk, liquidity risk, operational risk, compliance risk, and reputational risk, with specific measures in place to manage these risks[106]. - Credit risk control measures include setting risk limits for specific counterparties and monitoring credit exposure, limit breaches, and concentration risks[110]. - The company maintained a high level of comprehensive credit and interbank borrowing limits, enhancing liquidity management through overdraft agreements with banks[113]. - The company implemented a robust operational risk management framework, including standardized operating procedures and automated controls to minimize human error[114]. - Compliance risk management was strengthened through enhanced training, system upgrades, and proactive measures to ensure legal and regulatory adherence[117]. - Reputation risk management was prioritized by embedding risk assessments into key business decisions and enhancing internal communication and coordination[118]. Regulatory Compliance and Licenses - The company holds various licenses for securities and futures business, ensuring compliance with regulatory requirements[15]. - The company received the Securities Business Foreign Exchange Operating License on September 9, 2010, allowing it to engage in foreign exchange operations[17]. - The company was approved for margin financing and securities lending business by the China Securities Regulatory Commission on May 10, 2012[18]. - The company was confirmed to have a repurchase agreement trading permission with a pilot business scale of 400 million yuan as of October 26, 2012[18]. - The company was granted the qualification to conduct internet securities business on March 3, 2015[22]. - The company became a market maker in the inter-institutional private equity product quotation and service system on December 11, 2017[23]. Shareholder Information - The total number of ordinary shareholders at the end of the reporting period was 159,065[157]. - The largest shareholder, Anhui State-owned Assets Operation Co., Ltd., holds 887,020,879 shares, representing 24.50% of the total shares[158]. - Anhui Publishing Group Co., Ltd. is the second-largest shareholder with 349,601,131 shares, accounting for 9.65%[158]. - The top ten shareholders hold a total of 1,500,000,000 shares, with the largest shareholder, Anhui Publishing Group, owning 349,601,131 shares[161]. - Anhui State-owned Assets Operation Co., Ltd. holds 887,020,879 restricted shares, which will become tradable after 36 months from the company's listing date[162]. Corporate Governance and Management - The company has appointed several new senior management personnel, including Mr. Zhao Wanli as Deputy General Manager[151]. - The company has modified its articles of association, with approval received from the Anhui Securities Regulatory Bureau[154]. - The company has confirmed that there were no changes in the total number of shares and capital structure during the reporting period[156]. - The company has authorized the board to determine audit fees for the 2018 fiscal year, not exceeding RMB 2 million, with adjustments possible based on changes in audit scope[128]. - The company has appointed a new Chief Risk Officer and General Manager during the reporting period, indicating a shift in management[165]. Community Engagement and Social Responsibility - The company has established a public welfare foundation to support poverty alleviation donations and educational assistance in targeted areas[145]. - The company has committed to promoting environmental governance and sustainable development in rural areas[141]. - The company provided CNY 4.09 million in assistance to 51 impoverished households and elderly party members[143]. - A total of CNY 6.56 million was allocated to donate 193 sets of safe school bags and educational materials to Lu Tian Miao Primary School[142]. - The company invested CNY 2.2 million to purchase 560 trash bins for improving the living environment in Lu Zhang Zhuang village[141]. - The company plans to deepen its poverty alleviation efforts in the second half of 2018, focusing on industry support in impoverished areas[145]. Legal Matters - The company has a major lawsuit involving a claim for repayment of principal amounting to RMB 835 million and interest of RMB 5,990,661.11, with a total claim including penalties reaching RMB 840,990,661.11[129]. - The company is subject to a significant lawsuit regarding a breach of contract related to a stock pledge agreement, with the case being accepted by the Anhui Provincial High Court[129]. - The company has initiated a lawsuit against Jiang Jiuming for failure to repay debts, with a claim for principal, interest, and penalties totaling 28.83 million yuan[132]. - The company is involved in ongoing litigation related to an investment cooperation agreement, with potential financial implications still being assessed[131]. Financial Strategy and Capital Management - The company plans to issue subordinated bonds with a proposed amount of CNY 3 billion, to be sold by the company itself in a phased manner[152]. - The company has received approval for a non-public issuance of corporate bonds totaling up to CNY 4 billion, also to be issued in phases[153]. - The company has significant financial assets measured at fair value totaling 15,445,433,483.95 RMB, with a net balance of 15,309,752,376.90 RMB at the end of the reporting period[97]. - The company reported a total asset of 6,042,000 RMB and a net asset of 5,742,000 RMB for its wholly-owned subsidiary, Huazhong New Energy, with a revenue of 353,000 RMB and a net profit of 56,000 RMB for the first half of 2018[99].