方正证券(601901) - 2021 Q2 - 季度财报

Definitions This section provides definitions of key terms used throughout the report Company Profile and Key Financial Indicators This section provides an overview of the company's basic information and key financial performance metrics Company Information Founder Securities Co., Ltd. is a comprehensive securities company with full business licenses, led by legal representative Shi Hua and registered capital of RMB 8.232 billion - The company holds comprehensive business qualifications, covering 53 licenses including securities brokerage, investment banking, asset management, futures, and fund sales[10][11] Company Basic Information | Item | Information | | :--- | :--- | | Chinese Name | Founder Securities Co., Ltd. | | Stock Abbreviation | Founder Securities | | Stock Code | 601901 | | Listing Exchange | Shanghai Stock Exchange | | Legal Representative | Shi Hua | | Registered Capital | 8,232,101,395.00 RMB | Key Accounting Data and Financial Indicators In the first half of 2021, the company achieved strong performance growth with operating revenue up 20.25% and net profit attributable to shareholders surging by 102.70%, while total assets grew by 16.06% Key Accounting Data for H1 2021 (Consolidated Statements) | Key Indicator | Jan-Jun 2021 | Jan-Jun 2020 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue (RMB) | 4,079,949,848.55 | 3,392,945,977.69 | 20.25% | | Operating Profit (RMB) | 1,698,333,862.46 | 932,669,957.82 | 82.09% | | Net Profit Attributable to Parent (RMB) | 1,300,547,159.13 | 641,612,762.39 | 102.70% | | Net Profit Attributable to Parent (Excl. Non-recurring Items) (RMB) | 1,304,807,723.11 | 662,770,083.00 | 96.87% | | Net Cash Flow from Operating Activities (RMB) | 5,485,626,407.41 | 4,987,911,780.71 | 9.98% | Key Financial Indicators for H1 2021 (Consolidated Statements) | Key Indicator | Jan-Jun 2021 | Jan-Jun 2020 | Change | | :--- | :--- | :--- | :--- | | Basic EPS (RMB/share) | 0.16 | 0.08 | 100.00% | | Weighted Average ROE (%) | 3.24 | 1.66 | Increased by 1.58 percentage points | Balance Sheet Key Data (Consolidated Statements) | Key Indicator | Jun 30, 2021 | Dec 31, 2020 | Change from Prior Year-End (%) | | :--- | :--- | :--- | :--- | | Total Assets (RMB) | 143,049,097,757.91 | 123,256,369,688.39 | 16.06% | | Owners' Equity Attributable to Parent (RMB) | 40,707,839,886.82 | 39,620,740,244.32 | 2.74% | Parent Company Core Risk Control Indicators | Key Indicator | Jun 30, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | Net Capital (RMB) | 22,918,642,968.41 | 20,958,329,450.55 | | Risk Coverage Ratio (%) | 340.48 | 337.16 | | Capital Leverage Ratio (%) | 24.19 | 27.30 | | Liquidity Coverage Ratio (%) | 138.99 | 154.60 | | Net Stable Funding Ratio (%) | 134.57 | 142.08 | Management Discussion and Analysis This section provides an in-depth analysis of the company's industry, business operations, core competencies, and financial performance Industry and Main Business Overview during the Reporting Period In H1 2021, the securities industry experienced high prosperity, benefiting the company's five main business segments, which maintained leading positions in wealth management and fund market-making - The company's main businesses encompass five segments: wealth management, investment banking, asset management, institutional services, and investment and trading, providing comprehensive financial services to clients[23] - In H1 2021, A-share market activity was robust, with stock and fund transaction volume reaching RMB 115.73 trillion, a 22.21% year-on-year increase; margin financing and securities lending balance reached RMB 1.68 trillion, up 29.99% from the beginning of the year, fostering a favorable environment for brokerage business development[24] - The company's wealth management business ranks among the top tier in the industry, with over 12 million clients and an industry ranking of 8th; its self-developed "Xiaofang" APP's monthly active users rank 4th in the industry[25] - The company's fund market-making business is industry-leading, ranking 2nd in the industry by the number of market-making funds[26] Analysis of Core Competencies during the Reporting Period The company's core competencies include strong comprehensive strength, leading wealth management, optimized business model, excellent talent, and robust compliance and risk control - The company demonstrates strong comprehensive strength, with its total assets, net assets, and operating revenue all ranking among the top 20 in the industry in 2020[27] - Wealth management business is a flagship for the company, with multiple key indicators such as total client count, number of branches, and APP monthly active users consistently ranking in the top tier of the industry[28] - The company has received an A-class regulatory rating from the China Securities Regulatory Commission for 4 consecutive years, indicating robust compliance and risk control capabilities[29] Discussion and Analysis of Operating Performance In H1 2021, the company maintained stable operations despite shareholder restructuring, achieving significant financial improvements, including a 102.70% increase in net profit attributable to the parent Overall Operating Performance for H1 2021 | Indicator | Amount (Billion RMB) | YoY Growth | | :--- | :--- | :--- | | Operating Revenue | 40.80 | 20.25% | | Operating Profit | 16.98 | 82.09% | | Net Profit Attributable to Parent | 13.01 | 102.70% | - Despite some impact on the company's financing and business expansion due to the controlling shareholder's restructuring, the company's operations and team remained stable, with internal and external environments gradually improving[30] Wealth Management Business Wealth management, a core business, performed strongly in H1 2021, with significant growth in brokerage, investment advisory, and financial product distribution income - Net income from securities brokerage business reached RMB 1.826 billion, a 13.34% year-on-year increase; total clients exceeded 12.7 million, ranking 8th in the industry; Xiaofang APP's monthly active users rank 4th in the industry[31] - Financial product distribution income was RMB 245 million, surging by 191.06% year-on-year, with sales of equity private products increasing by 357.00% year-on-year[31] - Futures brokerage fee income reached RMB 312 million, a 85.77% year-on-year increase; clients' average daily equity grew by 36.84% year-on-year[32] Investment Banking Business In the reporting period, investment banking business generated RMB 177 million in revenue, with equity underwriting at RMB 1.655 billion and bond underwriting at RMB 19.03 billion Investment Banking Business Revenue Composition for H1 2021 | Business Type | Underwriting Scale (Billion RMB) | Business Revenue (Million RMB) | | :--- | :--- | :--- | | Equity Business | 1.655 | 36.67 | | Bond Business | 19.03 | 140.26 | Asset Management Business Asset management business achieved significant active management transformation, with securities asset management equity scale growing by 60% and private equity net profit surging by 438.15% - Securities asset management business firmly pursued active management transformation, with equity scale reaching RMB 5.684 billion, a 60.00% increase[34] - Private equity funds (Founder Hesheng) performed exceptionally, achieving a net profit of RMB 118 million, a 438.15% year-on-year increase[35] - Public funds (Founder Fubon) equity fund scale reached RMB 8.122 billion, a 226.05% year-on-year increase[35] Institutional Services Business Institutional services business experienced rapid growth, with research commission income reaching a historical high and private comprehensive services revenue surging by 240.75% - Research business achieved commission income of RMB 170 million, setting a new historical high[37] - Private comprehensive business income reached RMB 136 million, a 240.75% year-on-year increase[37] Investment and Trading Business Investment and trading businesses diversified, with strong performance in equity and fixed income, and fund market-making maintaining an industry-leading position - Fund market-making business maintained its industry-leading position, providing market-making services for 215 fund products, accounting for 44.42% of the total ETF market, with business revenue of RMB 100 million, a 7.00% year-on-year increase[38] - Bond investment advisory business achieved significant growth, leading the industry in both client numbers and assets under management[38] Key Operating Performance during the Reporting Period The company's net profit surged by 105.20% due to favorable market conditions and increased subsidiary earnings, while investment banking fees declined and fixed income activities increased Financial Statement Key Item Variation Analysis | Key Indicator | Current Period | Prior Period | Change (%) | Explanation of Change | | :--- | :--- | :--- | :--- | :--- | | Net Interest Income | 930,725,013.28 RMB | 711,080,276.50 RMB | 30.89% | Primarily due to changes in liability structure during the current period | | Net Investment Banking Fee and Commission Income | 195,437,295.90 RMB | 302,820,279.29 RMB | -35.46% | Primarily due to a decrease in investment banking project income during the current period | | Credit Impairment Losses | 118,444,624.28 RMB | 302,835,323.81 RMB | -60.89% | Primarily due to credit impairment losses recognized in the prior period | | Net Profit | 1,340,352,747.57 RMB | 653,197,942.24 RMB | 105.20% | Primarily due to market conditions impacting brokerage business and increased subsidiary earnings during the current period | Balance Sheet Key Item Variation Analysis | Item | Current Period End | Prior Period End | Change (%) | Explanation of Change | | :--- | :--- | :--- | :--- | :--- | | Other Debt Investments | 29,358,951,942.46 RMB | 14,190,249,453.69 RMB | 106.90% | Primarily due to an increase in financial asset investment scale during the current period | | Financial Assets Sold Under Repurchase Agreements | 27,797,522,291.52 RMB | 13,332,074,099.80 RMB | 108.50% | Primarily due to an increase in bond pledged repurchase and income right transfer repurchase scale during the current period | Analysis of Major Holding and Participating Companies%20%E4%B8%BB%E8%A6%81%E6%8E%A7%E8%82%A1%E5%8F%82%E8%82%A1%E5%85%AC%E5%8F%B8%E5%88%86%E6%9E%90) In H1 2021, major subsidiaries generally performed well, with Founder Hesheng Investment and Founder Securities Investment showing outstanding net profit, while some entities incurred losses Major Subsidiary Operating Performance for H1 2021 (Unit: Million RMB) | Holding Company Name | Net Assets | Operating Revenue | Net Profit | | :--- | :--- | :--- | :--- | | Founder Underwriting & Sponsorship | 3,178.84 | 208.79 | 30.30 | | Founder Hesheng Investment | 2,280.26 | 166.21 | 118.36 | | Founder Securities Investment | 1,354.45 | 134.18 | 97.78 | | Founder Mid-term Futures | 1,515.55 | 461.67 | 121.26 | | Founder Fubon Fund | 438.02 | 76.88 | -5.80 | | Founder Hong Kong Financial Holdings | 177.44 | -87.20 | -108.98 | | Credit Suisse Securities (Participating) | 1,503.30 | 242.31 | 32.50 | Potential Risks Faced The company manages primary risks including credit, liquidity, market, and operational risks through a comprehensive risk management system with established controls and monitoring 1. Credit Risk Credit risk primarily stems from client defaults in credit businesses and issuer defaults in bond investments, managed through various control measures, with overall risk controllable Credit Business Performance Guarantee Levels | Credit Business | Jun 30, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | Average Maintenance Guarantee Ratio for Margin Financing and Securities Lending Clients | 311.99% | 320.44% | | Average Performance Guarantee Ratio for Stock Pledge Repurchase Clients | 186.25% | 125.66% | Credit Risk Exposure (Unit: RMB) | Financial Asset Category | Jun 30, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | Funds Lent Out | 27,159,977,441.91 | 23,952,491,443.95 | | Other Debt Investments | 29,358,951,942.46 | 14,190,249,453.69 | | Financial Assets Purchased Under Resale Agreements | 1,467,681,999.14 | 1,487,479,876.71 | | Total Credit Risk Exposure | 122,885,893,058.74 | 101,443,923,402.87 | 3. Market Risk Market risk, encompassing interest rate, exchange rate, and equity price risks, is managed through size, duration, and stop-loss limits, with equity VaR at RMB 68 million Bond Portfolio Interest Rate Risk Indicators | Date | Modified Duration (Years) | Basis Point Value (Million RMB) | | :--- | :--- | :--- | | Jun 30, 2021 | 1.98 | 6.96 | | Dec 31, 2020 | 1.22 | 3.05 | - The VaR (Value at Risk) for equity securities holdings (99% confidence level, 1-day holding period) was RMB 68 million[65] - Sensitivity analysis indicates that a 5% change in the fair value of the company's financial instruments would result in a 6.05% corresponding change in the company's net assets[66] Corporate Governance This section details the company's corporate governance structure, including shareholder meetings and changes in directors, supervisors, and senior management Overview of Shareholder Meetings During the reporting period, the company held two shareholder meetings, approving key proposals and experiencing a change in independent directors - During the reporting period, the company held the first extraordinary general meeting of shareholders in 2021 and the 2020 annual general meeting of shareholders[69] - There was a change in independent directors: Mr. Ye Lin resigned, and Ms. Cao Shinan was elected as an independent director of the company's fourth board of directors on May 18, 2021[70] Environmental and Social Responsibility This section outlines the company's commitment and actions regarding environmental protection and social responsibility initiatives Environmental Information The company actively fulfills its environmental and social responsibilities through measures like waste sorting, energy conservation, and promoting poverty alleviation linked to rural revitalization - The company implemented various measures to protect the environment and reduce carbon emissions, including waste sorting, water and electricity conservation, paperless office, and reducing fuel consumption for official vehicles[74][75] - The company continuously promotes the alignment of its poverty alleviation model with rural revitalization, fulfilling its social responsibilities through industrial funds, strategic cooperation, public welfare projects, and consumption-based poverty alleviation[76] Significant Matters This section highlights critical events and developments, including the controlling shareholder's restructuring and major litigation cases Explanation of the Integrity Status of the Company, its Controlling Shareholder, and Actual Controller during the Reporting Period The most significant matter was the controlling shareholder's bankruptcy reorganization, which will lead to a change in the company's indirect control to Ping An and a shift to no actual controller, pending regulatory approval - On July 5, 2021, the court ruled to approve the reorganization plan of the controlling shareholder, Peking University Founder Group[87] - According to the reorganization plan, the company's controlling shareholder is proposed to change to the "New Founder Group," and Ping An Life Insurance Company of China, Ltd. or its wholly-owned entity will become the controlling shareholder of New Founder Group, thereby enabling Ping An to indirectly control the company[87][103] - This equity change will result in the company's actual controller changing from Peking University to no actual controller, but the change is still subject to approval by the China Securities Regulatory Commission[103][448] Major Litigation and Arbitration Matters During the reporting period, the company had no major litigation or arbitration matters, with most securities misrepresentation cases settled and recourse sought from Founder Group - During the reporting period, there were no major litigation or arbitration matters as defined in the Listing Rules[82] - Lawsuits involving amounts exceeding RMB 10 million primarily concerned routine business disputes such as margin financing and securities lending, stock pledges, contract disputes, and securities misrepresentation[83] - Out of 2,992 securities misrepresentation cases arising from the failure to disclose shareholder related-party relationships, most have been settled according to judgments or mediation, with cumulative compensation amounting to approximately RMB 146 million, and the company has filed a claim with Founder Group to exercise its right of recourse[90][439] Share Changes and Shareholder Information This section provides details on changes in the company's shares and information about its shareholders Top Ten Shareholders and Top Ten Circulating Shareholders (or Non-Restricted Shareholders) as of the End of the Reporting Period As of the reporting period end, the company's share structure remained unchanged, with Peking University Founder Group and Beijing Zhengquan Holdings as top shareholders, both with frozen shares Top Ten Shareholders (as of June 30, 2021) | Shareholder Name | Number of Shares Held | Percentage (%) | Share Status | | :--- | :--- | :--- | :--- | | Peking University Founder Group Co., Ltd. | 2,284,609,852 | 27.75 | Frozen | | Beijing Zhengquan Holdings Co., Ltd. | 1,799,591,164 | 21.86 | Frozen | | Hong Kong Securities Clearing Company Limited | 1,449,267,847 | 17.61 | Unrestricted | | Harbin Hatou Investment Co., Ltd. | 194,086,999 | 2.36 | Unrestricted | | China Securities Finance Corporation Limited | 139,461,318 | 1.69 | Unrestricted | | Central Huijin Asset Management Co., Ltd. | 138,731,200 | 1.69 | Unrestricted | - Shares held by the first largest shareholder, Peking University Founder Group, and the second largest shareholder, Beijing Zhengquan Holdings, were both judicially frozen[98] Preferred Shares Related Information This section provides information regarding the company's preferred shares Preferred Shares Related Information During the reporting period, the company had no preferred shares related information - The company has no preferred shares[104] Bonds Related Information This section provides details on the company's outstanding bonds and their repayment status 1. Basic Information on Corporate Bonds As of the reporting period, the company had two outstanding non-public corporate bonds totaling RMB 3.1 billion, maintaining an AAA credit rating with strengthened debt-paying ability Outstanding Corporate Bonds Basic Information (Unit: Million RMB) | Bond Abbreviation | Code | Issue Date | Maturity Date | Bond Balance | Interest Rate (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | 19 Founder F1 | 151205 | 2019/2/27 | 2022/2/27 | 2,500 | 4.71 | | 19 Founder F2 | 151290 | 2019/3/21 | 2022/3/21 | 600 | 4.65 | - United Credit Rating Co., Ltd. maintained an AAA credit rating for the company's entity and relevant bond issues on June 28, 2021, with a stable outlook[108] Key Debt-Paying Ability Financial Indicators | Key Indicator | Current Reporting Period (Jan-Jun 2021) | Prior Period (Jan-Jun 2020) | Change | | :--- | :--- | :--- | :--- | | Interest Coverage Ratio | 3.35 | 2.04 | Increased by 64.22% | | EBITDA Interest Coverage Ratio | 3.61 | 2.19 | Increased by 64.84% | Financial Report This section includes the company's unaudited 2021 semi-annual consolidated and parent company financial statements, along with detailed notes covering key accounting policies, changes, and significant events Financial Statements This section presents the company's consolidated and parent company balance sheets as of June 30, 2021, and the income statement, cash flow statement, and statement of changes in owners' equity for H1 2021 Notes to Financial Statements The notes detail financial statement preparation, accounting policies, and major items, including new lease standards, financial instruments, related party transactions, and the controlling shareholder's restructuring - The company adopted new lease standards from January 1, 2021, retrospectively adjusting opening financial statements to recognize right-of-use assets and lease liabilities, which increased total assets and liabilities but had no significant impact on owners' equity and net profit[218][219] - The notes extensively disclose the reorganization progress of the controlling shareholder, Peking University Founder Group, a matter that may lead to a change in the company's control, with Ping An intending to indirectly control the company[447][448] - The notes also reveal the progress of the RMB 2.05 billion payment matter from former China Minzu Securities; as of the report date, the amount has not been fully recovered, and a bad debt provision of RMB 522.45 million has been made[450][492] Securities Company Information Disclosure This section provides information on the company's administrative licenses and regulatory ratings Regulatory Classification Results for the Company During the reporting period, the company obtained administrative approval to expand its business scope and received an A-class A-level regulatory rating for three consecutive years - On January 22, 2021, the company obtained administrative approval from the Hunan Securities Regulatory Bureau to expand its business scope[573] - The company received an A-class A-level regulatory classification result for three consecutive years (2019, 2020, 2021)[573]