Economic Overview - In the first half of 2022, the number of visitors to Hong Kong was only 76,000, representing a 125% increase compared to the previous year, but less than 1% of the pre-pandemic level of almost 35 million visitors in the first half of 2019[12]. - Total retail sales in the first seven months of 2022 decreased by 1.7% compared to the same period last year[12]. - Hong Kong's GDP fell year-on-year by 3.9% in the first quarter and by 1.3% in the second quarter, with the actual GDP growth rate for the year expected to be adjusted downward to between -0.5% and 0.5%[12]. - The consumer price index in September 2022 rose by 4.4% year-on-year, higher than the increase of 1.9% in August[12]. - Excluding one-off government bailouts, the basic inflation rate in September would return to 1.8%[12]. - The Federal Reserve increased interest rates by a total of 3% from January to September 2022, leading to banks in Hong Kong raising the prime rate[12]. - Residential property prices in Hong Kong faced declines due to interest rate hikes and a wave of migration[12]. Financial Performance - For the six months ended September 30, 2022, the Group recorded revenue of HK$436.2 million, a year-on-year decrease of 23.0% from HK$566.5 million[21]. - Profit for the Period was HK$231.1 million, reflecting a decline of 21.6% compared to HK$294.9 million in the previous year[21]. - The average daily turnover for Hong Kong stocks during the Period was approximately HK$113.01 billion, a decrease of approximately 28.7% from HK$158.54 billion in the same period last year[21]. - The Group's total comprehensive income attributable to equity shareholders amounted to HK$231.5 million, a decline of 21.5% from HK$294.8 million in the previous year[21]. - The board of directors does not recommend the payment of any interim dividend for the Period, consistent with the previous year[21]. - The Group recorded revenue of HK$436.2 million, a year-on-year drop of 23.0% from HK$566.5 million[27]. - Commission income from securities brokerage was HK$166.3 million, a decrease of 28.9% year-on-year, accounting for 38.1% of total revenue[28][29]. - Commission income from Hong Kong futures and options brokerage increased by 9.9% to HK$64.0 million, accounting for 14.7% of total revenue[30][31]. - Global futures brokerage commission income rose by 74.1% to HK$60.1 million, representing 13.8% of total revenue[32][35]. - IPO brokerage commission income decreased by 82.5% to HK$2.1 million, with interest income from IPO financing down 99.4% to HK$236,000[33][36]. - Average daily margin borrowings decreased by 36.7% to HK$6.84 billion, with interest income from margin financing at HK$132.3 million, a decrease of 25.6%[34]. - The Group's investment losses from financial assets at fair value through profit or loss were HK$15.8 million, an improvement from a loss of HK$21.6 million in the previous year[39]. - Operating expenses decreased by 15.8% year-on-year to HK$263.7 million, while the net profit margin slightly increased to 53.0% from 52.1%[40]. - Staff costs decreased by 1.3% to HK$76.2 million, while finance costs saw a significant reduction of 44.2% to HK$45.4 million[42]. Client and Market Activity - The number of companies listed in Hong Kong for financing in the first half of the year decreased by 48% year-on-year to 24, with financing amount dropping 92% to HK$17.8 billion[15]. - The Hang Seng Index dropped approximately 50% from its high to low since 2021, hitting a 13-year low below 15,000 points[15]. - The total number of client accounts increased to 538,629, representing a growth of 5.4% from 510,957 as of September 30, 2021, with 27,672 new accounts opened during the period[24][25]. - Client assets decreased by 22.6% to approximately HK$53.0 billion as of September 30, 2022, down from approximately HK$68.5 billion as of September 30, 2021[24][25]. - The average daily trading volume during the period was approximately HK$113.01 billion, a decrease of about 28.7% compared to HK$158.54 billion in the same period last year[23]. Strategic Initiatives - The Group invested heavily in the research and development of one-stop mobile trading apps, BS Securities and BS Futures, anticipating a rapid increase in investor demand for financial technology[21]. - The Group maintained services of physical stores across Hong Kong Island, Kowloon, and New Territories, providing all-round, one-stop, and 24-hour services to investors[17]. - The Group's strategies were adjusted in response to changes in market conditions, aiming to retain customers with high-quality service despite adverse market conditions[17]. - The Group plans to enhance its online trading systems and improve the speed of order placement through regular updates to its trading apps[46]. - The Group aims to expand its branch network by identifying prime locations with high pedestrian traffic, currently operating 14 outlets[46]. - Future strategies include attracting talents, technology, and capital to strengthen the Group's position in the securities industry[43]. - The Group emphasizes the importance of stable and reliable trading channels to avoid disruptions during trading[46]. - The Group is committed to nurturing the next generation of industry elites through regular job fairs, regardless of market conditions[46]. - The Group launched a live streaming channel "Bright Smart Finance Channel" to provide real-time financial information and investor education[49]. - The Group's online trading platforms connect to global markets, offering a wide range of financial products including Hong Kong stocks, US stocks, and various futures[53]. - The Group introduced a "one for five" futures account, allowing investors to trade with a margin of 20%, which has gained popularity since its launch in June[53]. - Significant investments were made in developing two mobile trading apps, BS Securities (Baobao) and BS Futures (Doudou), equipped with AI 3.0 features[55]. - The Baobao app now includes premarket trading for US stocks, allowing clients to trade before 4 PM Hong Kong time[55]. - The Group won seven awards from HKEX, including five "Top Broker" awards, reflecting its strong market position and service quality[58]. - The Group's mobile apps received recognition as "Outstanding One-Stop Mobile Application for Securities and Futures Trading" by industry organizations[58]. - The Group is committed to enhancing financial literacy among the public through various educational initiatives and partnerships with renowned financial institutions[49]. - The introduction of the "24-hour Electronic Direct Debit Authorisation (eDDA) Service" allows clients to deposit and trade anytime, breaking traditional industry constraints[55]. - The Group's efforts in fintech and service upgrades have significantly boosted client confidence and brand reputation in the market[58]. Financial Position and Liquidity - As of September 30, 2022, the Group maintained a strong cash position with total bank deposits, bank balances, and cash amounting to HK$570.7 million, an increase from HK$524.7 million as of March 31, 2022[71]. - The Group's total bank borrowings decreased to HK$4,255.0 million as of September 30, 2022, down from HK$5,162.2 million as of March 31, 2022, resulting in a gearing ratio of 168.0%[71]. - The net current assets of the Group increased by 3.8% to HK$2,384.2 million as of September 30, 2022, compared to HK$2,296.3 million as of March 31, 2022[71]. - The Group's current ratio improved to 1.4 times as of September 30, 2022, compared to 1.3 times as of March 31, 2022[71]. - The Group's unutilized banking facilities amounted to HK$17,825.1 million as of September 30, 2022, compared to HK$16,048.8 million as of March 31, 2022[71]. - The Group's asset-liability ratio was 168.0% as of September 30, 2022, down from 208.9% as of March 31, 2022[74]. - The Group's liquidity position is strong, with unused bank financing of HK$17,825.1 million as of September 30, 2022, compared to HK$16,048.8 million as of March 31, 2022[74]. - Corporate guarantees provided by the Company for banking facilities to subsidiaries amounted to HK$16,492.8 million as of September 30, 2022, up from HK$15,724.5 million as of March 31, 2022[79]. - As of September 30, 2022, the subsidiaries utilized HK$3,525.0 million of the aggregate banking facilities, down from HK$4,063.7 million as of March 31, 2022[81]. - The Group maintains a policy of regular monitoring of liquidity requirements and compliance with loan covenants to ensure sufficient cash reserves[86]. Risk Management - The Group actively manages foreign currency risk by monitoring positions daily and addressing short-term imbalances as necessary[93]. - The Group's interest-bearing assets and liabilities are primarily priced based on floating rates, mainly linked to HIBOR[90]. - The Group is exposed to price risk from listed equity investments and futures contracts classified as financial assets at fair value through profit or loss[95]. - The fair value of accounts receivable from margin, cash, and IPO clients is referenced against the fair value of collaterals, exposing the Group to price risk[96]. - The Group manages foreign currency risk primarily from financial instruments denominated in USD, RMB, AUD, SGD, JPY, and GBP, with daily monitoring of foreign currency positions[94]. Corporate Governance - The company has fully complied with the Corporate Governance Code during the reporting period[113]. - The company confirmed that all directors complied with the Model Code for Securities Transactions during the period[115]. - The interim financial report has been reviewed by KPMG, confirming compliance with the relevant accounting standards[140]. - The Audit Committee, along with external auditor KPMG, reviewed the financial reporting processes and internal control procedures for the six months ended September 30, 2022[111]. Employee and Workforce - The Group's workforce decreased to 217 employees as of September 30, 2022, from 262 employees as of March 31, 2022[93]. - The Group's remuneration policy aims to provide competitive compensation to attract and retain talented employees, including a bonus plan for executives[99].
耀才证券金融(01428) - 2023 - 中期财报