国泰君安国际(01788) - 2025 - 中期财报

Company Information This chapter outlines Guotai Junan International Holdings Limited's board members, committee structures, company secretary, registered office, auditor, share registrar, and investor relations contacts - The Board of Directors comprises Executive Directors Dr. Yan Feng (Chairman) and Ms. Qi Haiying, Non-executive Directors Ms. Yu Xuping, Mr. Dong Boyang, Mr. Han Zhida (resigned), and Mr. Zou Hua (appointed), along with Independent Non-executive Directors Dr. Fu Tingmei, Professor Chan Ka Keung, and Mr. Liu Chung Man[3] - Membership and chair positions for the Audit, Remuneration, Nomination, Risk, and ESG Committees are detailed, including records of director changes[3] - The Company Secretary is Ms. Fung Ching Yiu, the registered office is at 27/F, Low Block, Grand Millennium Plaza, 181 Queen's Road Central, Hong Kong, and the auditor is KPMG[4] Financial Highlights This chapter provides an overview of Guotai Junan International Holdings Limited's key financial data for the six months ended June 30, 2025, showing significant growth in revenue and profit, along with substantial increases in payout ratio and return on shareholders' equity Key Financial Data for the 6 Months Ended June 30 | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Revenue | 2,825,044 | 2,170,922 | 30% | | – Commission and fee income | 541,145 | 358,511 | 51% | | – Interest income | 1,195,970 | 1,095,004 | 9% | | – Net trading and investment income | 1,087,929 | 717,407 | 52% | | Profit attributable to ordinary equity holders | 550,089 | 194,937 | 182% | | Dividends | 475,950 | 114,576 | 315% | | Payout ratio | 87% | 59% | 28 percentage points | | Return on shareholders' equity (annualized) | 7.3% | 2.6% | 4.7 percentage points | | Basic earnings per share (HK cents) | 5.77 | 2.04 | 183% | | Diluted earnings per share (HK cents) | 5.77 | 2.04 | 183% | | Dividend per share (HK cents) | 5.00 | 1.20 | 317% | Financial Position (Period-end) | Metric | As of June 30, 2025 (HK$ thousand) | As of December 31, 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Total assets | 122,005,130 | 130,173,149 | (6%) | | Shareholders' equity | 15,434,464 | 14,914,657 | 3% | | Number of shares issued | 9,518,994,707 | 9,539,503,707 | (0.2%) | | Equity per ordinary share (HK$) | 1.62 | 1.56 | 4% | - Revenue increased by 30% year-on-year to HK$2.825 billion, and profit attributable to ordinary equity holders surged by 182% year-on-year to HK$550 million[9] Management Discussion and Analysis This chapter provides an in-depth analysis of the company's operating performance and financial position in the first half of 2025, along with an outlook on future markets and corporate strategy, covering market review, business segment development, revenue and cost analysis, balance sheet overview, capital structure, and risk management I. Market Review In the first half of 2025, the global economy experienced continued volatility due to geopolitical and tariff policies, while China's economy operated steadily, mainland support policies boosted capital market recovery, and the Hong Kong market significantly rebounded, with the Hang Seng Index and Hang Seng Tech Index leading performance, and a substantial increase in average daily turnover and IPO fundraising in Hong Kong stocks - In the first half of 2025, the Hang Seng Index cumulatively rose by 23%, and the Hang Seng Tech Index increased by 22%, leading among major global stock indices[10] - The average daily turnover of Hong Kong stocks reached HK$240.2 billion, a 118% year-on-year increase[10] - The Hong Kong Main Board completed 44 initial public offerings, raising approximately HK$107.1 billion, a 7-fold year-on-year increase, surpassing the full-year scale of 2024[10] - The primary market for Chinese offshore USD bonds saw a significant rebound in issuance volume compared to 2024, with the secondary market recovering, as the high-yield bond total return index rose by 6% and the investment-grade bond total return index increased by 4%[10] II. Operating Performance Review The Group achieved leapfrog growth in revenue and profit in the first half of 2025, with revenue reaching HK$2.825 billion, a 30% year-on-year increase, and profit attributable to ordinary equity holders at HK$550 million, surging by 182% year-on-year, primarily driven by the synergistic development and innovation of core businesses such as wealth management, corporate finance, and investment management Business Development The Group achieved diversified development and innovation in wealth management, corporate finance, and institutional business, making significant progress in virtual asset services, bond underwriting, and ESG green finance, while continuously optimizing customer services and digital transformation - Wealth management commission income significantly increased by 56% year-on-year to HK$279 million, benefiting from diversified products and services, and the enhancement of Cross-boundary Wealth Management Connect 2.0 services[12] - The Group has established comprehensive service capabilities for digital asset-related businesses, including the offering, issuance, distribution, and trading services for virtual asset-related products[13] - Corporate finance placement, underwriting, and sub-underwriting commission income significantly increased by 85% year-on-year to HK$165 million[13] - In the first half, the Group participated in 150 bond issuance underwritings, a 33% year-on-year increase, with a total issuance size of approximately HK$258.8 billion, a 38% year-on-year increase, ranking first in the market for the number and amount of Chinese offshore bond lead underwritings[15] - In equity business, the Group assisted CATL in completing its Hong Kong IPO and helped 18 companies submit listing applications to the HKEX Main Board[16] - Hong Kong stock derivative trading volume grew significantly, with financial product business reaching HK$41.74 billion, a 4% increase from the end of 2024[18] - Completed 47 ESG bond issuances, with a financing scale of approximately HK$102.7 billion, ranking first among Chinese securities firms for lead underwriting amount of Chinese offshore ESG bonds[18] - Achieved operational carbon neutrality for the third consecutive year, offsetting 609.29 tonnes of CO2 equivalent of Scope 1 and Scope 2 greenhouse gas emissions for 2024[18] Performance Analysis The Group's revenue structure is diversified, with growth in commission and fee income, interest income, and net trading and investment income, particularly strong performance in corporate finance and investment management segments, though total costs increased due to higher finance costs Revenue by Nature Analysis | Revenue Type | 2025 H1 (HK$ hundred million) | 2024 H1 (HK$ hundred million) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Commission and fee income | 5.41 | 3.59 | 51% | | Interest income | 11.96 | 10.95 | 9% | | Net trading and investment income | 10.88 | 7.17 | 52% | - Brokerage business income significantly increased by 46% to HK$323 million, while placement, underwriting, and sub-underwriting commission income surged by 85% year-on-year to HK$165 million[19] - Interest income from other financial institutions soared by 159% to HK$304 million, and interest income from fixed income securities significantly increased by 76% to HK$309 million[20] - Net trading income from fixed income securities, non-consolidated investment funds, derivatives, and equity investments dramatically increased by 246% to HK$531 million[20] Revenue by Segment Analysis | Segment | 2025 H1 (HK$ hundred million) | 2024 H1 (HK$ hundred million) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Wealth Management | 9.13 | 9.77 | (7%) | | Institutional Investor Services | 8.28 | 8.63 | (4%) | | Corporate Finance Services | 2.02 | 1.20 | 69% | | Investment Management | 8.83 | 2.11 | 317% | - Total costs increased by 10% year-on-year to HK$2.132 billion, primarily due to higher finance costs, as well as increased client manager commissions and staff costs commensurate with business growth[23] III. Financial Position Analysis The Group's total assets and liabilities decreased in the first half of 2025, but shareholders' equity grew steadily, maintaining healthy financial ratios and ample liquidity through optimized balance sheet structure and market risk control Balance Sheet Overview The Group's total assets and liabilities both decreased, but shareholders' equity increased, with continuous optimization of the balance sheet structure, ample liquidity reserves, and effective control over market risks and financing costs Balance Sheet Overview | Metric | As of June 30, 2025 (HK$ hundred million) | As of December 31, 2024 (HK$ hundred million) | Change | | :--- | :--- | :--- | :--- | | Total assets | 1,220.1 | 1,301.7 | (6%) | | Total liabilities | 1,064.6 | 1,151.5 | (8%) | | Total equity | 155.5 | 150.3 | 3% | - Total assets decreased primarily due to the Group's appropriate reduction in fixed income securities holdings in response to market conditions[24] - The decrease in total liabilities was mainly due to the Group's reduction in fixed income securities holdings, leading to a fall in repurchase agreement obligations[26] Financial Ratios | Ratio | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Nominal leverage ratio | 7.04 times | 7.77 times | | Leverage ratio excluding financial products held on behalf of clients | 4.36 times | 5.09 times | | Debt-to-equity ratio | 0.87 times | 1.10 times | | Current ratio | 1.13 times | 1.15 times | Capital Commitments, Other Commitments, and Contingent Liabilities At the end of the reporting period, the Group had capital commitments of approximately HK$10.1 million for system upgrades and property renovations, but no contingent liabilities or underwriting commitments - The Group had capital commitments of approximately HK$10,097,000 for system upgrades and property renovations, which were contracted but not yet provided for as of June 30, 2025[211] - As of June 30, 2025, the Group had no contingent liabilities or underwriting commitments[27][215] Liquidity and Financial Resources The Group's liquid assets and cash and cash equivalents decreased, but operating cash flow remained strong, and it successfully renewed its Medium Term Note Programme and issued new USD notes after the reporting period, ensuring sufficient financial resources - As of June 30, 2025, the Group's liquid assets were HK$111.91 billion, a 9% decrease from the end of 2024[28] - Cash and cash equivalents balance was HK$5.89 billion, with a net cash outflow of HK$1.31 billion (compared to an inflow of HK$4.67 billion in the first half of 2024)[28] - The Company successfully renewed its Medium Term Note Programme with a limit of HK$35 billion and, through its subsidiaries, holds a Guaranteed Structured Note Programme with a limit of US$15 billion[28] - As of June 30, 2025, outstanding Medium Term Notes and Structured Notes were HK$6.6 billion and US$4.9 billion, respectively[28] - Subsequent to the reporting period, the Company issued notes totaling US$500 million in July 2025[29] Significant Acquisitions and Disposals For the six months ended June 30, 2025, the Group did not undertake any significant acquisitions or disposals of subsidiaries, associates, or joint ventures - For the six months ended June 30, 2025, the Group had no significant acquisitions or disposals of subsidiaries, associates, or joint ventures[33] Material Investments Held As of June 30, 2025, the Group did not hold any material investments exceeding 5% of its total assets - As of June 30, 2025, the Group did not hold any material investments exceeding 5% of its total assets[34] Capital Structure and Regulatory Capital The Company repurchased and cancelled 23 million shares during the reporting period, issued 2.5 million new shares due to share option exercises, and continuously monitors its capital structure to ensure compliance with capital requirements of regulatory bodies like the SFC - For the six months ended June 30, 2025, the Company repurchased 20,055,000 shares on the Stock Exchange for a total consideration of HK$21,988,689, and cancelled a total of 23,009,000 repurchased shares[35][59] - The Company allotted and issued a total of 2,500,000 new shares upon the exercise of share options under the Share Option Scheme[35] - As of June 30, 2025, the total number of issued shares was 9,518,994,707[35] - All licensed subsidiaries of the Group have complied with their respective applicable capital requirements[35] Foreign Exchange Risk The Group's foreign exchange risk primarily arises from leveraged foreign exchange trading and brokerage business, but it hedges client positions through back-to-back transactions and faces lower foreign exchange risk due to the HKD-USD peg, taking appropriate hedging measures for RMB or other currency fluctuations - The Group's foreign exchange risk primarily arises from its leveraged foreign exchange trading and brokerage business, as well as its transactions denominated in currencies other than HKD[36] - The Group hedges most client positions' exchange rate fluctuations through back-to-back transactions with external counterparties and strictly monitors its positions[36] - Due to the HKD-USD peg, the Group does not face significant foreign exchange risk and will take appropriate hedging measures for RMB or other currency exchange rate fluctuations[36] IV. Outlook Looking ahead to the second half of 2025, the global economy faces uncertainties, but deepening capital market connectivity between mainland China and Hong Kong, along with proactive Hong Kong government policies, will drive growth momentum. The Group will adhere to its "seeking progress while maintaining stability" strategy, optimize its revenue structure, strengthen core businesses, accelerate digital transformation, and build a "one-stop digital financial service platform" to seize Web3.0 opportunities - In the second half of 2025, geopolitical competition, tariff negotiations, and US Federal Reserve monetary policy are uncertain factors that will pose challenges to the global economy[37] - China continues to introduce supportive policies, capital market connectivity between mainland China and Hong Kong is deepening, and the Hong Kong government actively promotes the development of the digital asset industry, anticipating continued positive momentum in the Hong Kong capital market in the second half[37] - The Group will adhere to its overall strategy of "seeking progress while maintaining stability, promoting stability through progress, and pragmatic advancement" to optimize its revenue structure and drive high-quality sustainable development[38] - In wealth management, the Group will focus on "product iteration + experience upgrade + market expansion" as core drivers, continuously expanding its product matrix, optimizing Cross-boundary Wealth Management Connect 2.0 services, and accelerating digital transformation[38] - In digital asset business, the Group will continue to optimize related trading services, strengthen product design capabilities, and build a "one-stop digital financial service platform" to help clients seize new wealth growth opportunities in the Web3.0 era[38] V. Human Capital and Remuneration Policy The Group is committed to providing employees with competitive remuneration and comprehensive training and development opportunities; as of June 30, 2025, it had 642 employees in Hong Kong, Singapore, and Macau, with salaries reviewed annually and discretionary bonuses based on performance - As of June 30, 2025, the Group had 642 employees in Hong Kong, Singapore, and Macau[39] - The company offers competitive remuneration, with salaries reviewed annually and discretionary bonuses based on Group and individual performance[39] - Other benefits include a Mandatory Provident Fund Scheme and medical and dental insurance, along with training courses in financial knowledge, compliance, and leadership management[39] Other Information This chapter discloses dividend declarations, share transfer registration arrangements, directors' and substantial shareholders' interests in shares, details of the share option scheme, Listing Rules disclosures, corporate governance and model code compliance, share repurchase activities, changes in directors' information, Audit Committee work, and updates to the non-competition undertaking Dividends The Board has declared an interim dividend of HK$0.05 per share for the six months ended June 30, 2025, with a payout ratio of 87%, payable on September 30, 2025 - The Board has declared an interim dividend of HK$0.05 per share for the six months ended June 30, 2025 (2024: HK$0.012 per share)[40] - The interim dividend, with a payout ratio of 87%, will be paid on September 30, 2025, to shareholders on the register of members as of September 15, 2025[40] Closure of Register of Members To determine eligibility for the interim dividend, the Company will suspend share transfer registration on September 15, 2025, with all relevant documents to be submitted to the share registrar by 4:30 p.m. on September 12, 2025 - The Company will suspend share transfer registration on Friday, September 15, 2025, to determine shareholders' entitlement to the interim dividend[41] - To qualify for the interim dividend, all duly completed transfer documents, together with the relevant share certificates, must be lodged with the Company's share registrar by 4:30 p.m. on Friday, September 12, 2025[41] Directors' and Chief Executive's Interests in Shares and Underlying Shares of the Company or Associated Corporations This chapter discloses the long positions in the Company's shares and underlying shares held by directors and the chief executive as of June 30, 2025, with Dr. Yan Feng holding 0.74% and Ms. Qi Haiying holding 0.09% of the shares Directors' Long Positions in Shares and Underlying Shares of the Company | Director Name | Capacity | Number of Shares | Number of Underlying Shares related to Share Options | Total | Percentage of Issued Shares (1) | | :--- | :--- | :--- | :--- | :--- | :--- | | Yan Feng | Personal Interest | 68,546,955 | 2,300,000 | 70,846,955 | 0.74% | | Qi Haiying | Personal Interest | 6,012,000 | 2,300,000 | 8,312,000 | 0.09% | | Fu Tingmei | Personal Interest | 1,512,096 | – | 1,512,096 | 0.02% | - The percentage is calculated based on 9,518,994,707 shares issued as of June 30, 2025[42] - Save as disclosed above, no other director or chief executive of the Company had any other interests or short positions in the shares, underlying shares, or debentures of the Company or any of its associated corporations[43] Share-Based Remuneration Schemes The Company has a share option scheme designed to incentivize employees; although the scheme expired in 2020, granted options remain exercisable. As of June 30, 2025, 15.8 million share options remained unexercised, representing approximately 0.20% of issued shares Share Option Scheme The Share Option Scheme was adopted in 2010 and expired in 2020, but granted options remain exercisable for 10 years. The scheme has grant limits, exercise prices determined by the Board, and 2.5 million options were exercised during the reporting period - The Share Option Scheme was adopted on June 19, 2010, and expired on June 19, 2020, after which no further options may be granted, but options already granted remain exercisable for a period of 10 years from their respective grant dates[45] - The Share Option Scheme aims to provide individuals working for the Group's benefit with an opportunity to acquire equity in the Company, thereby incentivizing them to work for the Group's interests[45] - The maximum number of options that can be granted to any participant is 1% of the total issued shares, while for substantial shareholders or independent non-executive directors, the limit is 0.1% or a total value of HK$5 million[46] - The exercise price of the share options is determined by the Board, being at least the higher of the closing price on the offer date or the average closing price for the five trading days immediately preceding the offer date[48] - As of August 27, 2025, the total number of shares issuable under unexercised share options granted under the Share Option Scheme was 7,850,000 shares, representing approximately 0.08% of the issued shares[50] Movements in Share Options for the 6 Months Ended June 30, 2025 | Participant Name | As of January 1, 2025 | Granted during the period | Exercised during the period | Cancelled during the period | Lapsed during the period | As of June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Directors Subtotal | 4,600,000 | – | – | – | – | 4,600,000 | | Employees Subtotal | 14,000,000 | – | (2,500,000) | – | (300,000) | 11,200,000 | | Total | 18,600,000 | – | (2,500,000) | – | (300,000) | 15,800,000 | - During the period ended June 30, 2025, 2,500,000 share options were exercised, resulting in the issuance of 2,500,000 shares for a total cash consideration of HK$3,841,000[210] Substantial Shareholders' Interests and Short Positions in Shares and Underlying Shares As of June 30, 2025, Guotai Junan Financial Holdings and its parent company, Guotai Haitong, were the Company's substantial shareholders, each beneficially owning or deemed to own 74.01% of the share interests Substantial Shareholders' Long Positions in Shares and Underlying Shares | Shareholder Name | Capacity | Number of Shares (Long Position) | Percentage of Issued Shares (2) | | :--- | :--- | :--- | :--- | | Guotai Junan Financial Holdings | Beneficial Owner | 7,044,877,066 | 74.01% | | Guotai Haitong (1) | Interest in Controlled Corporation | 7,044,877,066 | 74.01% | - Guotai Junan Financial Holdings is a wholly-owned subsidiary of Guotai Haitong, thus Guotai Haitong is deemed to have an interest in these shares[54] - The percentage is calculated based on the 9,518,994,707 shares issued as of June 30, 2025[55] Disclosure Pursuant to Rule 13.21 of the Listing Rules The Company's committed revolving loan agreements with banks contain a default clause stating that if Guotai Haitong ceases to be the single largest legal and beneficial owner or no longer controls the Company, it will constitute an event of default - The Company has entered into committed revolving loan agreements with certain banks in Hong Kong, with an aggregate limit of HK$1.6 billion and HK$2.15 billion[56] - Under the loan agreements, if Guotai Haitong ceases to be the single largest legal and beneficial owner of the Company's shares, directly or indirectly, or ceases to control the Company, it will constitute an event of default[56] - In the event of default, lenders may cancel commitments, declare loans immediately due, or demand repayment[56] Compliance with Corporate Governance Code The Company has adopted all principles and code provisions of the Corporate Governance Code and confirmed full compliance during the period from January 1, 2025, to June 30, 2025 - The Company has adopted all principles and code provisions of the Corporate Governance Code as its own corporate governance code[57] - During the period from January 1, 2025, to June 30, 2025, the Company complied with all code provisions set out in the Corporate Governance Code[57] Compliance with Model Code The Company has adopted the Model Code for securities transactions by directors and confirmed that all directors fully complied with its required standards during the period from January 1, 2025, to June 30, 2025 - The Company has adopted the Model Code for securities transactions by its directors[58] - Following specific enquiries by the Company, all directors confirmed their full compliance with the required standards set out in the Model Code during the period from January 1, 2025, to June 30, 2025[58] Repurchase, Sale or Redemption of the Company's Listed Securities For the six months ended June 30, 2025, the Company repurchased a total of 20,055,000 shares on the Stock Exchange for HK$21,988,689 and fully cancelled a total of 23,009,000 repurchased shares - For the six months ended June 30, 2025, the Company repurchased a total of 20,055,000 shares on the Stock Exchange for a total consideration of HK$21,988,689[59] - During the period, a total of 23,009,000 repurchased shares (including 2,954,000 shares repurchased but not yet cancelled as of December 31, 2024) were fully cancelled[59] Details of Shares Repurchased During the Period | Month | Number of Shares Repurchased | Highest Price Paid Per Share (HK$) | Lowest Price Paid Per Share (HK$) | Total Consideration (including transaction costs) (HK$) | | :--- | :--- | :--- | :--- | :--- | | January 2025 | 500,000 | 1.06 | 1.04 | 543,823 | | March 2025 | 1,000,000 | 1.11 | 1.05 | 1,079,749 | | April 2025 | 4,500,000 | 1.08 | 0.86 | 4,403,012 | | May 2025 | 8,640,000 | 1.16 | 1.02 | 9,519,281 | | June 2025 | 5,415,000 | 1.22 | 1.11 | 6,442,824 | Changes in Directors' Information Mr. Liu Chung Man was appointed as an independent non-executive director of Pola Pharma Co., Ltd. on March 14, 2025, and PGG Wrightson Limited on July 1, 2025, respectively - Mr. Liu Chung Man was appointed as an independent non-executive director of Pola Pharma Co., Ltd. (stock code: 2592.HK) on March 14, 2025[61] - Mr. Liu Chung Man was appointed as an independent director of PGG Wrightson Limited (stock code: PGW.NZ) on July 1, 2025[61] Audit Committee The Audit Committee, comprising four directors including three independent non-executive directors and one non-executive director, is responsible for reviewing accounting principles, internal controls, and financial reporting matters, and has reviewed this interim report - The Audit Committee comprises Mr. Liu Chung Man (Chairman), Dr. Fu Tingmei, Professor Chan Ka Keung (Independent Non-executive Directors), and Mr. Dong Boyang (Non-executive Director)[63] - The Audit Committee has reviewed the accounting principles and practices adopted by the Group and discussed internal controls and financial reporting matters, including the unaudited condensed consolidated interim financial information and this interim report for the six months ended June 30, 2025[63] - KPMG, the Group's external auditor, has reviewed the interim financial information in accordance with Hong Kong Standard on Review Engagements 2410[63] Non-Competition Undertaking Guotai Haitong and its subsidiaries have provided a non-competition undertaking to the Company, committing to resolve any potential competition issues with the Group within five years after the merger completion on March 14, 2025, through asset restructuring and business integration - Guotai Haitong and its two wholly-owned subsidiaries entered into a non-competition undertaking deed with the Company on June 19, 2010, undertaking not to compete with the Group in brokerage business in Hong Kong and/or any other jurisdiction (excluding mainland China)[64] - On November 21, 2024, Guotai Haitong issued a non-competition undertaking letter to the Company, committing to resolve any competition issues with the Group within five years from the completion of the merger, through methods compliant with applicable laws, regulations, and relevant regulatory authorities[64] - The aforementioned merger was completed on March 14, 2025[64] Review Report on Interim Financial Report KPMG reviewed Guotai Junan International Holdings Limited's interim financial report for the six months ended June 30, 2025, concluding that they found no matters leading them to believe the report was not prepared in all material respects in accordance with Hong Kong Accounting Standard 34 - KPMG has reviewed the interim financial report contained on pages 40 to 97, which complies with the applicable disclosure provisions of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants[66][69] - The scope of review is substantially less than that of an audit conducted in accordance with Hong Kong Standards on Auditing, and therefore no audit opinion is expressed[68][70] - Based on the review, nothing has come to their attention that causes them to believe that the interim financial report as of June 30, 2025, is not prepared in all material respects in accordance with Hong Kong Accounting Standard 34[71][72] Consolidated Statement of Profit or Loss and Other Comprehensive Income This consolidated statement of profit or loss and other comprehensive income presents Guotai Junan International Holdings Limited's financial performance for the six months ended June 30, 2025, showing a profit for the period of HK$551 million and total comprehensive income of HK$730 million, a significant increase from the prior year Summary of Consolidated Statement of Profit or Loss and Other Comprehensive Income | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Revenue | 2,825,044 | 2,170,922 | | Operating profit | 1,860,551 | 1,340,338 | | Profit before taxation | 636,798 | 197,309 | | Profit for the period | 551,410 | 196,772 | | Total comprehensive income for the period | 729,901 | 184,223 | | Profit attributable to owners of the Company | 550,089 | 194,937 | | Basic earnings per share (HK cents) | 5.77 | 2.04 | - Profit for the period increased by 180% year-on-year, from HK$197 million in 2024 to HK$551 million in 2025[74] - In other comprehensive income, investments at fair value through other comprehensive income generated a gain of HK$87.943 million, and foreign currency translation differences generated a gain of HK$28.346 million[74] Consolidated Statement of Financial Position This consolidated statement of financial position presents Guotai Junan International Holdings Limited's assets, liabilities, and equity as of June 30, 2025, showing a slight decrease in total assets but an increase in shareholders' equity, reflecting a robust financial structure Summary of Consolidated Statement of Financial Position | Metric | As of June 30, 2025 (HK$ thousand) | As of December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Total non-current assets | 10,090,725 | 6,621,189 | | Total current assets | 111,914,405 | 123,551,960 | | Total assets | 122,005,130 | 130,173,149 | | Total current liabilities | (98,797,229) | (107,692,555) | | Total non-current liabilities | (7,659,907) | (7,453,891) | | Total liabilities | (106,457,136) | (115,146,446) | | Total equity | 15,547,994 | 15,026,703 | | Equity attributable to shareholders | 15,434,464 | 14,914,657 | - Total assets decreased by 6% from HK$130.17 billion as of December 31, 2024, to HK$122.01 billion as of June 30, 2025[75] - Shareholders' equity increased by 3% from HK$14.915 billion as of December 31, 2024, to HK$15.434 billion as of June 30, 2025[77] - Net current assets were HK$13,117,176 thousand, a decrease from HK$15,859,405 thousand at the end of 2024[76] Consolidated Statement of Changes in Equity This consolidated statement of changes in equity details the movements in the components of Guotai Junan International Holdings Limited's equity for the six months ended June 30, 2025, including the impact of total comprehensive income, share repurchases, dividend payments, and share option exercises on shareholders' equity - The balance of equity attributable to shareholders as of January 1, 2025, was HK$14,914,657 thousand, increasing to HK$15,434,464 thousand as of June 30, 2025[79] - Total comprehensive income for the period was HK$728,417 thousand, attributable to owners of the Company[79] - Share repurchases during the period reduced equity by HK$21,988 thousand, and a final dividend of HK$190,462 thousand for 2024 was paid[79] - The exercise of share options resulted in an increase in share capital of HK$5,256 thousand and a decrease in share option reserve of HK$1,416 thousand[79] Condensed Consolidated Statement of Cash Flows This condensed consolidated statement of cash flows outlines Guotai Junan International Holdings Limited's cash movements for the six months ended June 30, 2025, showing net cash inflow from operating activities but net cash outflow from financing activities, ultimately resulting in a net decrease in cash and cash equivalents Summary of Condensed Consolidated Statement of Cash Flows | Activity Type | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Net cash flows from/(used in) operating activities | 3,939,028 | (2,717,608) | | Net cash flows used in investing activities | (8,435) | (23,385) | | Net cash flows (used in)/from financing activities | (5,003,569) | 7,528,838 | | Net (decrease)/increase in cash and cash equivalents | (1,072,976) | 4,787,845 | | Cash and cash equivalents at end of period | 5,617,562 | 11,957,190 | - Operating activities generated a net cash inflow of HK$3.939 billion, a significant improvement from the net outflow in the prior year[81] - Financing activities resulted in a net cash outflow of HK$5.004 billion, primarily due to repayment of debt securities and dividend payments[81] - Cash and cash equivalents at the end of the period were HK$5.618 billion, a decrease of HK$1.073 billion from the beginning of the period[81] Notes to the Interim Financial Report This chapter provides detailed notes to the interim financial report, covering general company information, accounting policies, operating segment performance, revenue and cost analysis, balance sheet items, capital structure, related party transactions, and fair value measurements of financial instruments, offering in-depth background and explanations for the financial statements 1. General Information The Company was incorporated in Hong Kong on March 8, 2010, and listed on July 8 of the same year, primarily engaged in wealth management, institutional investor services, corporate finance services, investment management, and other businesses, with Guotai Junan Financial Holdings as its direct holding company and Guotai Haitong as its ultimate holding company - The Company was incorporated in Hong Kong on March 8, 2010, and its shares were listed on the Main Board of the Stock Exchange on July 8, 2010[84] - The Company is an investment holding company, and its subsidiaries are primarily engaged in wealth management, institutional investor services, corporate finance services, investment management, and other businesses[84] - The Company's direct holding company is Guotai Junan Financial Holdings, and its ultimate holding company is Guotai Haitong[85] 2. Basis of preparation and changes in accounting policies This interim financial report is prepared in accordance with the Listing Rules and Hong Kong Accounting Standard 34, adopting the same accounting policies as the 2024 annual financial statements, and has applied HKAS 21 (Amendment) "Lack of Exchangeability," which has no material impact on this report - This interim financial report is prepared in accordance with the applicable disclosure provisions of the Listing Rules, including compliance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants[86][89] - The interim financial report is prepared based on the same accounting policies adopted in the Group's 2024 annual financial statements, except for changes in accounting policies expected to be reflected in the 2025 annual financial statements[87][89] - The Group has applied HKAS 21 (Amendment) "Lack of Exchangeability" issued by the Hong Kong Institute of Certified Public Accountants to this interim financial report for the current accounting period, but it has no material impact on this interim report[98][101] - The interim financial report is unaudited, but KPMG has performed a review in accordance with Hong Kong Standard on Review Engagements 2410[92][94] 3. Operating segment information The Group's operating businesses are divided into five segments: wealth management, institutional investor services, corporate finance services, investment management, and others, each independently managed and providing differentiated services, with detailed disclosure of revenue and profit before taxation for each segment during the reporting period - The Group's operating businesses are divided into five segments: wealth management, institutional investor services, corporate finance services, investment management, and "others"[106] 2025 H1 Segment Revenue and Other Losses | Segment | Commission and Fee Income (HK$ thousand) | Interest Income (HK$ thousand) | Net Trading and Investment Income (HK$ thousand) | Other Losses (HK$ thousand) | Total (HK$ thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | | Wealth Management | 278,866 | 569,056 | 64,596 | – | 912,518 | | Institutional Investor Services | 38,175 | 377,974 | 411,590 | – | 827,739 | | Corporate Finance Services | 202,243 | – | – | – | 202,243 | | Investment Management | 21,861 | 248,940 | 611,743 | – | 882,544 | | Other | – | – | – | (56,504) | (56,504) | | Total | 541,145 | 1,195,970 | 1,087,929 | (56,504) | 2,768,540 | 2025 H1 Segment Profit Before Taxation | Segment | Profit Before Taxation (HK$ thousand) | | :--- | :--- | | Wealth Management | 249,563 | | Institutional Investor Services | 82,417 | | Corporate Finance Services | 38,917 | | Investment Management | 265,901 | | Other | – | | Total | 636,798 | 4. Revenue The Group's revenue primarily derives from commission and fee income, interest income, and net trading and investment income, with brokerage, placement underwriting, and fixed income securities trading being key growth drivers, while interest income from clients and banks decreased Revenue Details | Revenue Type | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Commission and fee income | 541,145 | 358,511 | | - Brokerage business | 323,171 | 221,717 | | - Placement, underwriting and sub-underwriting commissions | 164,992 | 89,206 | | Interest income | 1,195,970 | 1,095,004 | | - Interest income from customers | 215,588 | 226,052 | | - Interest income from banks | 367,071 | 575,871 | | - Interest from other financial institutions | 303,927 | 117,306 | | - Interest income from fixed income securities | 309,384 | 175,775 | | Net trading and investment income | 1,087,929 | 717,407 | | - Net trading income from fixed income securities, non-consolidated investment funds, derivatives and equity investments | 531,184 | 153,436 | | - Net financial product income | 556,745 | 563,971 | | Total Revenue | 2,825,044 | 2,170,922 | - Commission and fee income significantly increased by 51% year-on-year, primarily driven by growth in brokerage and corporate finance businesses[111] - Interest income increased by 9% year-on-year, with significant growth from other financial institutions and fixed income securities offsetting declines from clients and banks[111] - Net trading and investment income significantly increased by 52% year-on-year, primarily due to a substantial surge in net trading income from fixed income securities, non-consolidated investment funds, derivatives, and equity investments[111] 5. Staff costs For the six months ended June 30, 2025, the Group's total staff costs amounted to HK$444 million, an increase of approximately 15% from the prior year, primarily comprising salaries, bonuses, and allowances Staff Costs Details | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Salaries, bonuses and allowances | 437,341 | 378,647 | | Pension scheme contributions | 6,912 | 6,808 | | Total | 444,253 | 385,455 | - Staff costs (including directors' emoluments) increased by 15.25% from HK$385 million in 2024 to HK$444 million in 2025[114] 6. Finance costs For the six months ended June 30, 2025, the Group's total finance costs amounted to HK$1.224 billion, an increase of approximately 7% from the prior year, with repurchase agreements and bank borrowings being the main components Finance Costs Details | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Bank borrowings and overdrafts | 274,885 | 392,702 | | Debt securities in issue | 158,796 | 191,147 | | Securities borrowing | 2,098 | 1,279 | | Repurchase agreements | 697,716 | 468,633 | | Lease liabilities | 1,178 | 455 | | Accounts payable to customers | 10,904 | 27,792 | | Other | 14,651 | 12,213 | | Total | 1,223,753 | 1,143,029 | - Finance costs increased by 7.06% from HK$1.143 billion in 2024 to HK$1.224 billion in 2025[115] - Finance costs for repurchase agreements significantly increased by 48.8%, from HK$469 million in 2024 to HK$698 million in 2025[115] 7. Profit before taxation For the six months ended June 30, 2025, the Group's profit before taxation was HK$637 million, a substantial increase from the prior year, primarily influenced by professional and consulting fees, repair and maintenance expenses, goodwill impairment provisions, and net impairment provisions for receivables Profit Before Taxation Deductions/(Additions) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Professional and consulting fees | 52,283 | 39,458 | | Information services expenses | 24,865 | 22,630 | | Repair and maintenance (including system maintenance) | 46,477 | 46,530 | | Marketing, advertising and promotion expenses | 1,274 | 2,787 | | Other commission expenses | 23,020 | 19,565 | | Goodwill impairment provision | 20,473 | – | | Net impairment (reversal)/provision for loans and advances to customers | (4,259) | 21,484 | | Net impairment provision for accounts receivable | 6,578 | 4,949 | | Net impairment provision for other financial assets and loan commitments | 5,383 | 3,243 | | Net impairment (reversal)/provision for financial assets at fair value through other comprehensive income | (2,696) | 5,882 | - Profit before taxation increased by 222.7% from HK$197 million in 2024 to HK$637 million in 2025[74] - A goodwill impairment provision of HK$20.473 million was recognized in the first half of 2025, compared to zero in the prior year[117] - Net impairment for loans and advances to customers shifted from a provision of HK$21.484 million in 2024 to a reversal of HK$4.259 million in 2025[117] 8. Income tax expense For the six months ended June 30, 2025, the Group's income tax expense was HK$85.388 million, a significant increase from the prior year, primarily due to Hong Kong profits tax and deferred tax, with the temporary mandatory exception for global anti-base erosion rules and Hong Kong minimum top-up tax applied Income Tax Expense Details | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Current – Hong Kong expense for the period | 48,133 | 10,203 | | Deferred | 37,255 | (9,336) | | Total | 85,388 | 537 | - Income tax expense significantly increased from HK$0.537 million in 2024 to HK$85.388 million in 2025[119] - Hong Kong profits tax is provided at a rate of 16.5%[119] - The Hong Kong Legislative Council passed legislation to implement global anti-base erosion rules and Hong Kong minimum top-up tax, effective for fiscal years beginning on or after January 1, 2025[121] - The Group has applied the temporary mandatory exception for deferred tax accounting related to top-up tax, recognizing the tax as current tax when incurred[122] 9. Proposed interim/final dividend The Board has declared an interim dividend of HK$0.05 per share for the period ended June 30, 2025, totaling approximately HK$476 million, and paid a final dividend of HK$0.02 per share for 2024 on June 17, 2025 - The Board has declared an interim dividend of approximately HK$475,950,000 or HK$0.05 per share for the period ended June 30, 2025 (2024: HK$114,576,000 or HK$0.012 per share)[124] - The interim dividend declared after the reporting date has not been recognized as a liability in the interim financial report at the end of the reporting period[124] - The Board proposed a final dividend of HK$0.02 per share for the year ended December 31, 2024, on March 26, 2025, and paid approximately HK$190,462,000 on June 17, 2025[125] 10. Earnings per Share attributable to ordinary equity holders of the parent For the period ended June 30, 2025, the Company's basic earnings per share were 5.77 HK cents, and diluted earnings per share were also 5.77 HK cents, as the anti-dilutive effect of share options resulted in diluted earnings being the same as basic earnings - For the period ended June 30, 2025, basic earnings per share were 5.77 HK cents (2024: 2.04 HK cents)[126] - Basic earnings per share are calculated based on the profit attributable to ordinary equity holders of the parent of HK$550,089,000 and the weighted average number of issued shares of 9,529,767,207 during the period[126] - As the effect of unexercised share options is anti-dilutive to the presented basic earnings per share, no adjustment was made for dilution to the basic earnings per share, and diluted earnings per share were also 5.77 HK cents[128][130] 11. Loans and advances to customers As of June 30, 2025, the Group's total loans and advances to customers amounted to HK$8.334 billion, primarily comprising margin loans, term loans, and IPO loans, with margin loans secured by pledged securities Details of Loans and Advances to Customers | Item | As of June 30, 2025 (HK$ thousand) | As of December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Margin loans | 10,075,962 | 9,628,032 | | Term loans to customers | 235,365 | 235,365 | | IPO loans | 135,490 | – | | Less: Impairment provisions | (2,112,737) | (2,116,996) | | Total | 8,334,080 | 7,746,401 | - Margin loans are secured by relevant pledged securities, bear interest by reference to the Hong Kong Prime Rate, and are repayable on demand[134][137] - As of June 30, 2025, the total value of pledged securities as collateral for margin loans was approximately HK$41.802 billion (December 31, 2024: HK$39.512 billion)[135][137] - The Group also provides term loans to customers, with interest rates determined by reference to the customer's creditworthiness and the quality and value of collateral[136][138] 12. Accounts receivable As of June 30, 2025, the Group's total accounts receivable amounted to HK$12.858 billion, primarily from brokerage, securities lending, and corporate finance businesses, with impairment provisions of HK$82.739 million recognized Carrying Amount Details of Accounts Receivable | Item | As of June 30, 2025 (HK$ thousand) | As of December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Accounts receivable from brokerage business | 11,645,765 | 9,907,164 | | Accounts receivable from securities lending business | 1,039,844 | 1,098,216 | | Accounts receivable from corporate finance, asset management and other businesses | 254,906 | 167,080 | | Less: Impairment provisions | (82,739) | (76,090) | | Total | 12,857,776 | 11,096,370 | - Among accounts receivable from brokerage business, receivables from the Stock Exchange and other clearing houses increased from HK$2.296 billion as of December 31, 2024, to HK$5.044 billion as of June 30, 2025[141] - The aging analysis of accounts receivable from corporate clients, investment funds, and others shows that the amount not yet overdue is HK$156 million, and the amount overdue for more than three months is HK$70.274 million[149] - For accounts receivable from corporate clients, investment funds, and others, a simplified approach using a provision matrix is adopted, with provision rates calculated based on days overdue and similar loss patterns[150][151] 13. Financial assets at fair value As of June 30, 2025, the Group's total financial assets measured at fair value amounted to HK$73.254 billion, primarily comprising financial assets held for trading and investment, and financial products, with most being current assets and some pledged to secure liabilities Details of Financial Assets at Fair Value Through Profit or Loss | Item | As of June 30, 2025 (HK$ thousand) | As of December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Non-current financial assets | 8,980,656 | 5,602,967 | | Current financial assets | 55,022,503 | 64,722,825 | | Total | 64,003,159 | 70,325,792 | Details of Financial Assets at Fair Value Through Other Comprehensive Income | Item | As of June 30, 2025 (HK$ thousand) | As of December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Current financial assets | 7,292,989 | 8,985,272 | | Total | 7,292,989 | 8,985,272 | - The financial products held by the Group are primarily purchased due to client investment needs and serve as hedging instruments for structured notes or derivatives[155][156] - As of June 30, 2025, the total amount of pledged trading assets, financial investments, and cash was HK$881 million, securing liabilities of HK$818 million[160] 14. Derivative financial instruments As of June 30, 2025, the Group's derivative financial instruments had a total notional amount of HK$128.958 billion, fair value assets of HK$1.958 billion, and liabilities of HK$2.044 billion, primarily comprising commodity, currency, interest rate, and equity derivatives, with ISDA master netting agreements in place with counterparties Fair Value and Notional Amounts of Derivative Financial Instruments (As of June 30, 2025) | Derivative Instrument Type | Notional Amount (HK$ thousand) | Fair Value Assets (HK$ thousand) | Fair Value Liabilities (HK$ thousand) | | :--- | :--- | :--- | :--- | | Non-current | 16,886,796 | 420,754 | (206,153) | | Current | 112,071,419 | 1,537,498 | (1,837,830) | | Total | 128,958,215 | 1,958,252 | (2,043,983) | - The Group has entered into ISDA master netting agreements or similar agreements with most derivative counterparties, granting the right to offset cash collateral[167] - As of June 30, 2025, cash collateral paid and received from relevant counterparties amounted to HK$1.926 billion and HK$4.065 billion, respectively[167] 15. Receivables from reverse repurchase agreements As of June 30, 2025, the Group's receivables from reverse repurchase agreements amounted to HK$8.275 billion, a decrease from the end of 2024, with the fair value of collateral received for outstanding receivables being HK$8.378 billion - As of June 30, 2025, outstanding amounts paid for reverse repurchase agreements were HK$8,275,117,000 (December 31, 2024: HK$9,982,509,000)[169][171] - The fair value of collateral received for outstanding receivables was HK$8,378,188,000 (December 31, 2024: HK$9,963,680,000)[170][171] - Receivables from reverse repurchase agreements arise when the Group purchases securities with a simultaneous agreement to resell them at a specified future date and price[168][171] 16. Accounts payable As of June 30, 2025, the Group's total accounts payable amounted to HK$21.756 billion, primarily from brokerage clients, brokers and dealers, and the Stock Exchange, with most payables due on demand and interest-free except for amounts due to clients Accounts Payable Details | Item | As of June 30, 2025 (HK$ thousand) | As of December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Accounts payable from brokerage business | 21,010,107 | 18,777,066 | | Accounts payable from securities lending business | 79,948 | 49,618 | | Accounts payable from corporate finance, asset management and other businesses | 655,536 | 888,120 | | Total | 21,755,591 | 19,714,804 | - Amounts due to customers include HK$12.46 billion deposited in trust accounts with authorized financial institutions, and HK$97 million with Hong Kong Futures Exchange Limited and other futures brokers[174] - Most accounts payable are repayable on demand, except for certain amounts due to customers which are margins received from customers for trading activities in the ordinary course of business[176] - Except for amounts due to customers, accounts payable are interest-free[175][176] 17. Interest-bearing borrowings As of June 30, 2025, the Group's total interest-bearing borrowings amounted to HK$6.783 billion, primarily composed of unsecured bank borrowings and lease liabilities, with most denominated in USD and bank borrowings bearing interest at SOFR plus a spread Interest-Bearing Borrowings Details | Item | As of June 30, 2025 (HK$ thousand) | As of December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Non-current lease liabilities | 26,040 | 20,889 | | Current lease liabilities | 20,559 | 35,378 | | Current unsecured bank borrowings | 6,736,735 | 5,900,533 | | Total | 6,783,334 | 5,956,800 | Interest-Bearing Borrowings by Currency | Currency | As of June 30, 2025 (HK$ thousand) | As of December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | HKD | 1,831,498 | 40,195 | | USD | 4,867,000 | 5,861,443 | | Other currencies | 84,836 | 55,162 | | Total | 6,783,334 | 5,956,800 | - The Group's bank borrowings all bear interest at the Secured Overnight Financing Rate (SOFR) plus a spread[177][179] - The Group's lease liabilities bear interest at a weighted average annual rate of 4.65%[179] 18. Debt securities in issue As of June 30, 2025, the Group's total debt securities in issue amounted to HK$44.826 billion, primarily comprising unsecured medium-term notes accounted for at amortized cost and structured notes designated at fair value through profit or loss, with most denominated in USD, and no defaults on principal or interest during the reporting period Details of Debt Securities in Issue | Item | As of June 30, 2025 (HK$ thousand) | As of December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Non-current at amortized cost | – | 3,125,610 | | Non-current designated at fair value through profit or loss | 7,419,518 | 3,988,001 | | Current at amortized cost | 6,730,066 | 7,463,994 | | Current designated at fair value through profit or loss | 30,676,433 | 33,780,647 | | Total | 44,826,017 | 48,358,252 | Debt Securities in Issue by Currency | Currency | As of June 30, 2025 (HK$ thousand) | As of December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | USD | 37,668,591 | 42,213,898 | | HKD | 2,642,145 | 1,132,354 | | RMB | 4,169,740 | 2,982,139 | | Other currencies | 345,541 | 329,861 | | Total | 44,826,017 | 48,358,252 | - The current portion of unsecured notes in issue is redeemable on demand or has an original maturity of less than one year[182][184] - The Group had no defaults on principal or interest or any other unfulfilled obligations for the six months ended June 30, 2025[182][184] 19. Financial liabilities at fair value through profit or loss As of June 30, 2025, the Group's total financial liabilities at fair value through profit or loss amounted to HK$4.208 billion, primarily comprising listed equity and debt securities held for trading, as well as financial products designated at fair value through profit or loss and third-party interests in consolidated investment funds Details of Financial Liabilities at Fair Value Through Profit or Loss | Item | As of June 30, 2025 (HK$ thousand) | As of December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Financial liabilities held for trading | 2,576,563 | 1,807,541 | | Financial liabilities designated at fair value through profit or loss | 1,631,012 | 1,314,544 | | Total | 4,207,575 | 3,122,085 | - Among financial liabilities held for trading, listed equity securities amounted to HK$887 million, and listed debt securities amounted to HK$1.689 billion[187] - Financial liabilities designated at fair value through profit or loss include financial products of HK$1.494 billion and third-party interests in consolidated investment funds of HK$137 million[187] - During the period, the amount of change in the fair value of financial liabilities at fair value through profit or loss attributable to changes in their own credit risk was not significant[188] [20. Oblig