中原证券(601375) - 2023 Q4 - 年度财报

Definitions This section defines key terms and abbreviations used in the annual report, providing a foundational understanding of its content Definitions of Common Terms This chapter clarifies professional terms and institutional abbreviations, including internal company titles and external regulatory bodies, essential for report comprehension - The report defines internal entities (e.g., Central China Securities, the Group), governance structures (e.g., Board of Directors, Supervisory Board), and external regulators and markets (e.g., CSRC, SSE, HKEX), specifying the reporting period as January 1 to December 31, 2023[33] Company Profile and Key Financial Indicators This section provides an overview of the company's fundamental information, business qualifications, organizational structure, and key financial performance over the past three years Company Basic Information Central China Securities Co., Ltd., listed in Shanghai and Hong Kong, provides essential contact details and information disclosure channels Key Company Information | Item | Information | | :--- | :--- | | Company Chinese Name | 中原证券股份有限公司 | | Company Chinese Abbreviation | 中原证券 | | Company English Name | CENTRAL CHINA SECURITIES CO.,LTD. | | A-share Stock Code | 601375 | | H-share Stock Code | 01375 | | Legal Representative | Lu Zhili | | Company Website | https://www.ccnew.com | Business Qualifications and Organizational Structure The company holds comprehensive securities business licenses and maintains a robust governance structure with extensive domestic and international service networks - The company possesses comprehensive business licenses, including core qualifications for securities brokerage, investment advisory, underwriting and sponsorship, proprietary trading, asset management, margin financing and securities lending, and fund distribution[37] - The company has established a sound corporate governance structure, including the Shareholders' Meeting, Board of Directors, and Supervisory Board, supported by various specialized committees and functional departments to ensure standardized operations[247][222] - As of the report disclosure date, the company operates 31 branches and 76 securities brokerage offices, with 66 offices located in Henan Province, indicating a wide national network[254][225] Key Financial Data and Indicators for the Past Three Years In 2023, the company achieved revenue growth and a significant increase in net profit, while maintaining stable risk control indicators despite negative operating cash flow Key Accounting Data (Consolidated Statements) | Item | 2023 (Yuan) | 2022 (Yuan) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 1,968,016,572.87 | 1,881,047,259.12 | 4.62% | | Net Profit Attributable to Parent Company Shareholders | 211,601,553.51 | 106,577,985.92 | 98.54% | | Net Cash Flow from Operating Activities | -467,298,168.05 | 2,002,498,853.10 | -123.34% | | Total Assets | 51,701,683,772.46 | 50,182,639,547.46 | 3.03% | | Equity Attributable to Parent Company Shareholders | 13,902,762,596.08 | 13,757,829,045.04 | 1.05% | Key Financial Indicators (Consolidated Statements) | Item | 2023 | 2022 | Change | | :--- | :--- | :--- | :--- | | Basic Earnings Per Share (Yuan/share) | 0.05 | 0.02 | 150.00% | | Weighted Average Return on Net Assets (%) | 1.53 | 0.78 | Increased by 0.75 percentage points | Parent Company Key Risk Control Indicators | Item | End of Reporting Period | End of Prior Year | Trend | | :--- | :--- | :--- | :--- | | Risk Coverage Ratio (%) | 248.71 | 220.96 | Up | | Capital Leverage Ratio (%) | 19.06 | 18.79 | Up | | Liquidity Coverage Ratio (%) | 198.96 | 192.85 | Up | | Net Stable Funding Ratio (%) | 150.69 | 158.54 | Down | Management Discussion and Analysis This section provides an in-depth review of the company's operational performance, business segment analysis, industry landscape, core competencies, financial results, and future outlook with risk considerations Overall Business Performance In 2023, the company achieved steady operational growth by implementing four key strategies, optimizing subsidiary business structures, and focusing on cost reduction and efficiency improvements - The company aims to become a leading modern investment bank in core business areas and regional markets, pursuing a development path based on "specialization, integration, platformization, and localization"[273] - The company's core businesses developed steadily: wealth management transformation deepened with a strong start in investment advisory; bond proprietary trading maintained high returns; investment banking facilitated over 18 billion yuan in equity and debt financing; and asset management scale significantly increased[272] - The company guided its subsidiaries to focus on their primary responsibilities, with Zhongzhou Lan Hai specializing in STAR Market follow-on investments, Zhongyuan Futures vigorously developing brokerage business, and Zhongzhou International shifting towards light-asset operations[272] Analysis of Main Businesses The company's business segments showed mixed performance, with brokerage revenue declining, investment banking shifting to debt, and asset management and proprietary trading showing growth Securities Brokerage Business Despite market volatility, the company's brokerage business saw client growth and stable app activity, though revenue declined due to reduced market trading volume - Securities brokerage client accounts reached 2.9891 million, a 13.63% increase year-over-year[299] - The company's Caishangbao APP maintained over one million monthly active users, ranking 24th in internet operation indicators among securities firms[276] - Full-year public fund sales reached 3.342 billion yuan, a 3.76% increase year-over-year[299] Investment Banking Business Investment banking faced challenges from tightened IPOs, leading to a decrease in equity underwriting but a significant increase in bond underwriting and distribution Key Investment Banking Performance | Item | 2023 | | :--- | :--- | | IPO Joint Lead Underwriting Projects | 1 project | | Listed Company Refinancing Lead Underwriting Projects | 3 projects | | A-share Equity Lead Underwriting Amount | 1.656 billion yuan | | Bond Lead Underwriting Amount | 7.075 billion yuan (41.27% YoY increase) | | Bond Distribution Amount | 9.189 billion yuan (83.49% YoY increase) | Investment Management Business The investment management segment, including asset management, private equity, and alternative investments, saw increased scale and strategic fund launches - Total asset management scale reached 3.663 billion yuan, with large-scale money market products accounting for 2.090 billion yuan[304] - Subsidiary Zhongding Kaiyuan managed 16 private equity funds with a total scale of 6.2995 billion yuan[307][333] - Subsidiary Zhongzhou Lan Hai (alternative investment) had 47 active projects with a total scale of 2.535 billion yuan[310] Proprietary Trading Business The company's proprietary trading business performed steadily in the bond market, maintaining stable returns and actively expanding OTC derivatives - In fixed income investment, the company expanded its investment scale and effectively avoided significant drawdowns by deeply researching interest rate market trends and flexibly adjusting positions[339] - In equity investment, adhering to a "neutral" strategy, the company successfully mitigated downside risks in the equity market and actively expanded its over-the-counter derivative products business[339] Credit Business The company's margin financing and securities lending balance increased, while stock pledge repurchase business was actively reduced to control risks Credit Business Balance | Item | End of Reporting Period | Change from Prior Year-End | | :--- | :--- | :--- | | Margin Financing and Securities Lending Balance | 7.408 billion yuan | +8.81% | | Stock Pledge Repurchase Balance | 1.580 billion yuan | -26.16% | Futures Business The futures business, conducted through Zhongyuan Futures, saw significant growth in institutional clients, daily average margin, trading volume, and turnover - Zhongyuan Futures' average daily client margin reached 2.206 billion yuan, a 35.14% increase year-over-year[373] - Trading volume was 38.4201 million lots, up 42.36%; turnover was 3.219273 trillion yuan, up 8.99%[373] Overseas Business Despite a sluggish Hong Kong market, Zhongzhou International's securities client assets and public fund distribution significantly increased, with improved exchange rankings - Zhongzhou International's total client assets under custody for securities business reached 4.296 billion HKD, a 2.41% increase year-over-year[349] - Cumulative subscription amount for public fund distribution business was approximately 882 million HKD, an increase of approximately 2.72 times year-over-year[349] Industry Conditions and Core Competencies In 2023, China's capital market reforms shifted focus to investors, intensifying competition, while the company leveraged its regional, integrated platform, and A+H listing advantages - In 2023, capital market reforms shifted focus from financing to investment and trading, emphasizing "activating the capital market and boosting investor confidence"[401] - The company's core competencies include: 1. Focusing on regional development advantages by deeply cultivating the Henan market; 2. Integrated platform advantages, building an "one client, one Zhongyuan" operating model; 3. A+H dual-listing platform advantages, providing comprehensive capital market services[384][406][362] Financial Analysis of Operating Performance Operating revenue increased due to proprietary and futures businesses, while operating costs remained stable; cash flow from operations decreased due to increased trading investments Key Income Statement and Cash Flow Statement Items | Item | Current Period Amount (Yuan) | Prior Year Period Amount (Yuan) | Change (%) | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 1,968,016,572.87 | 1,881,047,259.12 | 4.62 | Primarily due to increased investment business income in the current period | | Operating Costs | 1,758,744,134.17 | 1,765,497,934.13 | -0.38 | Primarily due to decreased business and management fees and credit impairment losses in the current period | | Net Cash Flow from Operating Activities | -467,298,168.05 | 2,002,498,853.10 | -123.34 | Primarily due to increased cash outflow from investments in financial instruments in the current period | | Net Cash Flow from Investing Activities | 1,891,107,180.96 | -1,451,877,153.18 | Not applicable | Primarily due to increased cash inflow from investment recoveries in the current period | Key Balance Sheet Item Changes | Item | Period-End Amount (Yuan) | Period-Beginning Amount (Yuan) | Change (%) | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Financial Assets Held for Trading | 24,271,207,692.01 | 21,614,103,009.80 | 12.29 | Primarily due to increased bond scale at period-end | | Accounts Receivable | 421,115,609.11 | 87,679,998.85 | 380.29 | Primarily due to increased receivables from OTC business transactions at period-end | | Other Debt Investments | 410,921,462.71 | 2,288,258,640.42 | -82.04 | Primarily due to decreased investment scale in local and corporate bonds at period-end | | Funds Borrowed | 3,297,906,994.48 | 1,502,279,361.14 | 119.53 | Primarily due to increased bank borrowings at period-end | Future Development Outlook and Risk Analysis The company plans to enhance its strategic role in Henan's capital market, focusing on light-asset businesses and improving operational efficiency, while managing identified credit, market, liquidity, and operational risks - The company's future development strategy focuses on strengthening Henan's capital market strategic carrier function, adhering to the "specialization, integration, platformization, and localization" strategies, and pursuing a "differentiated and distinctive" development path centered on clients[433] - Key operational plans for 2024 include: comprehensively improving operational quality and efficiency, accelerating the implementation of the four major strategies, continuously ensuring organizational support, and strengthening the development of financial culture with Chinese characteristics[451][434][479][452] - The company identified seven major risks: credit risk, market risk, liquidity risk, reputational risk, operational risk, compliance risk, and information technology risk, with corresponding management and response measures in place[454] Corporate Governance This section details the company's governance structure, including board and supervisory board functions, executive compensation, and internal control systems Overview of Corporate Governance As an A+H listed company, the company continuously optimizes its governance structure, ensuring compliance with regulations and maintaining independence across all operations - The company strictly adheres to domestic and international regulations, including the Company Law, Securities Law, and Corporate Governance Code, with no significant discrepancies in its governance practices[529] - During the reporting period, the company revised its Articles of Association, Board of Directors' Rules of Procedure, and Independent Directors' Work System to adapt to new regulatory requirements and enhance governance[529] - The company maintains independence from its controlling shareholder in assets, personnel, finance, organization, and business, ensuring no interference in decision-making or operations[529] Shareholders' Meeting The company held four shareholders' meetings in 2023, approving key proposals including the annual report, profit distribution, auditor re-appointment, and director elections - A total of 4 shareholders' meetings were held in 2023, with all proposals approved[532] - Key proposals included reviewing the 2022 annual report, profit distribution plan, re-appointing auditors, and electing Mr. Lu Zhili as a director of the Seventh Board of Directors[502][535] Directors, Supervisors, and Senior Management The report details changes in the board and senior management, including the election of a new chairman, and discloses their tenure, shareholdings, and total remuneration - During the reporting period, Mr. Lu Zhili was elected as the company's Chairman, and Mr. Guan Mingjun resigned as Chairman due to reaching retirement age[576][506] - The total pre-tax remuneration received by all directors, supervisors, and senior management at the end of the reporting period was 13.3243 million yuan[520] Performance of the Board of Directors and Special Committees The Board of Directors held 10 meetings, approving major proposals, while its four specialized committees provided professional support for decision-making - The Board of Directors held 10 meetings throughout the year, with 5 conducted via communication and 5 combining in-person and communication methods[554] - The Audit Committee held 5 meetings, reviewing the annual report, internal control evaluation report, and related party transactions[585][561] - The Risk Control Committee held 3 meetings, deliberating on risk appetite, proprietary business scale, and risk limits[585][560] Performance of the Supervisory Board The Supervisory Board held five meetings, effectively overseeing company operations, financial status, and the performance of directors and senior management without objection - The Supervisory Board held 5 meetings throughout the year, approving all proposals and effectively overseeing company operations and internal controls[589][565] - The Supervisory Board had no objections regarding the supervised matters during the reporting period[591] Employee Status, Compensation, and Training The company's workforce of 2,738 employees, primarily with bachelor's degrees or higher, is compensated through a structured policy including performance bonuses and enterprise annuities, supported by diverse training programs Employee Composition | Item | Number of Employees | | :--- | :--- | | Total Employees | 2,738 | | Professional Composition | | | Brokerage Personnel | 1,786 | | Investment Banking Personnel | 245 | | Education Level | | | Master's Degree and Above | 680 | | Bachelor's Degree | 1,899 | - The company's compensation comprises basic salary, allowances, performance bonuses, and benefits, along with an enterprise annuity plan[592] Profit Distribution Plan The board proposed a 2023 profit distribution of 0.14 yuan per 10 shares (tax inclusive), totaling approximately 65 million yuan, representing 30.72% of net profit attributable to parent company shareholders 2023 Profit Distribution Plan | Item | | | :--- | :--- | | Dividend per 10 Shares (Yuan, tax incl.) | 0.14 | | Cash Dividend Amount (Yuan, tax incl.) | 65,000,385.80 | | Ratio to Net Profit Attributable to Parent Company Shareholders (%) | 30.72 | Internal Control and Subsidiary Management The company maintains a comprehensive internal control system and employs a "strategy + operation" model for subsidiary management, ensuring effective risk oversight - The company has established and effectively implemented a comprehensive internal control system, with no significant deficiencies identified[624][603] - The company employs a "strategy + operation" control model for its subsidiaries, with compliance, risk control, and finance departments providing vertical and penetrating management[625][606] - The internal control audit report issued by the company's appointed auditor received a standard unqualified opinion[606][627] Environmental and Social Responsibility (ESG) This section outlines the company's environmental compliance, social responsibility initiatives, and contributions to rural revitalization efforts Environmental Information The company and its subsidiaries are not designated as key polluting entities and incurred no environmental administrative penalties during the reporting period - The company and its subsidiaries are not classified as key polluting entities and received no environmental administrative penalties during the reporting period[685] Social Responsibility and Rural Revitalization The company actively fulfills its social responsibilities, publishing a dedicated report and contributing 336.4 thousand yuan to rural revitalization through product procurement and donations - The company separately disclosed its "2023 Social Responsibility Report"[686] Poverty Alleviation and Rural Revitalization Project Investment | Item | Amount (Million Yuan) | | :--- | :--- | | Total Investment | 0.3364 | | Of which: Funds | 0.2705 | | Value of Materials | 0.0659 | Significant Matters This section covers the company's fulfillment of commitments, major litigation, regulatory penalties, significant related-party transactions, guarantees, and changes in fundraising plans Fulfillment of Commitments The company and its controlling shareholder consistently fulfilled long-term commitments, including avoiding horizontal competition and other refinancing-related pledges - The company and its controlling shareholder, Henan Investment Group, promptly and strictly fulfilled their long-term commitments to avoid horizontal competition[46] Major Litigation and Arbitration The company was involved in several major stock pledge repurchase disputes, actively pursuing recovery and making progress in certain cases - The company was involved in multiple stock pledge repurchase contract disputes with significant amounts, including counterparties such as Shenwu Technology, Xingguang Holdings, and Kedi Group[54] - Progress was made in the Kedi Group stock pledge default case, with the company receiving 8.4706 million yuan in cash repayment for priority claims and obtaining 27,105,906 shares in 2023[58] - In the contract dispute between Zhongzhou Lan Hai and Zhongyi Real Estate, the company obtained the right to dispose of 51 properties in November 2023 and has applied for appraisal and auction[84] Penalties and Rectifications The company and its subsidiary Zhongyuan Futures received regulatory rectification orders for issues in research reports and private asset management, completing rectifications, though further structural issues were noted in early 2024 - In May 2023, the company received a rectification order from the Henan Securities Regulatory Bureau for deficiencies in its securities research report business system and review mechanisms, which has since been rectified[85] - Subsidiary Zhongyuan Futures received two rectification orders from the Henan Securities Regulatory Bureau in July and October 2023 for non-standard private asset management operations and internal control deficiencies, both of which have been rectified[681] - In February 2024, the company again received a rectification order from the Henan Securities Regulatory Bureau for incomplete organizational structure rectification and has submitted a rectification report[727] Significant Related-Party Transactions The company increased its stake in subsidiary Zhongyuan Futures from 51.357% to 92.29% through an acquisition, strengthening control over its futures business - The company acquired Zhongyuan Futures equity held by Henan Tiejiantou for 226 million yuan, increasing its stake from 51.357% to 92.29% upon completion in October 2023[88] Major Contracts and Guarantees As of the reporting period end, the company's total external guarantees amounted to 623.2776 million yuan, primarily for subsidiary Zhongzhou International's overseas bond issuance Guarantee Status | Item | Amount (Yuan) | | :--- | :--- | | Total Guarantee Balance for Subsidiaries at Period-End | 623,277,600 | | Ratio of Total Guarantees to Company Net Assets (%) | 4.48 | Use of Raised Funds In 2023, the company decided to terminate its private placement of A-shares, with the Shanghai Stock Exchange concluding its review in August - The company decided in July 2023 to terminate its private placement of A-shares and applied to the Shanghai Stock Exchange to withdraw relevant documents[93] - On August 2, 2023, the Shanghai Stock Exchange officially decided to terminate the review of the company's private placement of shares[68] Share Changes and Shareholder Information This section details the company's stable share capital, recent bond issuances, and shareholder structure, including major holders and ultimate control Share Changes During the reporting period, the company's total share capital and equity structure remained unchanged at 4,642,884,700 shares - During the reporting period, the company's total share capital and equity structure remained unchanged[94] Securities Issuance Information In 2023, the company successfully issued three bonds, raising 2.5 billion yuan to supplement working capital and optimize debt structure Securities Issuance Details | Bond Name | Issuance Amount (Billion Yuan) | Interest Rate (%) | Term | | :--- | :--- | :--- | :--- | | 23 Zhongyuan 01 | 10 | 3.68 | 3 years | | 23 Zhongyuan 02 | 10 | 2.61 | 368 days | | 23 Zhongyuan C1 | 5 | 3.70 | 3 years | Shareholder Information As of the reporting period end, the company had 127,202 common shareholders, with stable ownership dominated by institutional investors and state-owned entities - As of the end of the reporting period, the company had 127,202 common shareholders, including 127,167 A-share shareholders and 35 H-share registered shareholders[710] - Controlling shareholder Henan Investment Group Co., Ltd. held a total of 22.05% of the company's shares through direct and indirect means[72] - The company's ultimate controlling party is the Henan Provincial Department of Finance[178][201] Preferred Share Information This section confirms that the company had no preferred shares during the reporting period Preferred Share Status The company had no preferred shares during the reporting period - Not applicable, the company had no preferred shares during the reporting period[180] Bond Information This section provides an overview of the company's outstanding bonds, their issuance details, and the company's robust debt repayment capabilities Overview of Outstanding Bonds The company has multiple outstanding corporate and subordinated bonds listed on the Shanghai Stock Exchange, issued to professional investors with varying terms and interest rates - The company has multiple outstanding corporate and subordinated bonds, including "21 Zhongyuan 01", "22 Zhongyuan 01", and "23 Zhongyuan 01", all traded on the Shanghai Stock Exchange[182][185][188] Use of Raised Funds and Debt Repayment Capability All bond proceeds were used as committed, the company maintained an AAA credit rating, and all debts were serviced on time, demonstrating stable repayment capacity - All proceeds from bonds issued during the reporting period were used as committed in the offering circulars, with no instances of misuse[193][195] - The company's corporate credit rating remained AAA with a stable outlook; all maturing and interest-bearing bonds were repaid or paid in full and on time during the reporting period[111][162] Key Debt Repayment Indicators | Item | 2023 | 2022 | Trend | | :--- | :--- | :--- | :--- | | Asset-Liability Ratio (%) | 64.77 | 62.94 | Up | | Interest Coverage Ratio | 1.32 | 1.17 | Improved | | EBITDA Interest Coverage Ratio | 1.49 | 1.31 | Improved | Financial Report This section presents the company's audited financial statements, including the auditor's opinion, key audit matters, and consolidated financial performance Audit Report Dahua Certified Public Accountants (Special General Partnership) issued a standard unqualified audit opinion on the company's 2023 financial statements, highlighting key audit matters related to financial asset impairment and fair value assessment - The auditing firm, Dahua Certified Public Accountants (Special General Partnership), issued a standard unqualified audit opinion[122][149] - Key Audit Matter One: Determination of impairment provisions for funds lent, financial assets purchased under resale agreements, debt investments, and other debt investments; auditors deemed management's relevant judgments and assumptions reasonable[125][152][154] - Key Audit Matter Two: Valuation of financial instruments at fair value; auditors deemed management's judgments and assumptions regarding the fair value assessment of financial assets held for trading, other debt investments, and financial liabilities held for trading reasonable[172][157][159] Consolidated Financial Statements As of year-end 2023, the company's consolidated total assets were 51.702 billion yuan, with total liabilities of 37.551 billion yuan, and net profit attributable to parent company shareholders of 212 million yuan Key Consolidated Balance Sheet Items (2023-12-31) | Item | Amount (Yuan) | | :--- | :--- | | Total Assets | 51,701,683,772.46 | | Financial Assets Held for Trading | 24,271,207,692.01 | | Funds Lent | 7,604,853,831.45 | | Total Liabilities | 37,551,184,086.55 | | Client Funds for Securities Trading | 11,538,050,603.00 | | Financial Assets Sold Under Repurchase Agreements | 10,602,387,479.57 | | Total Equity Attributable to Parent Company Shareholders | 13,902,762,596.08 | Key Consolidated Income Statement Items (2023 Annual) | Item | Amount (Yuan) | | :--- | :--- | | Total Operating Revenue | 1,968,016,572.87 | | Net Interest Income | 126,068,459.51 | | Net Fee and Commission Income | 745,988,329.71 | | Investment Income | 873,177,476.72 | | Gains/Losses from Changes in Fair Value | -96,656,528.14 | | Total Operating Expenses | 1,758,744,134.17 | | Total Profit | 212,248,563.49 | | Net Profit Attributable to Parent Company Owners | 211,601,553.51 | Securities Company Information Disclosure This section details the company's significant administrative licensing matters, including branch relocations and cancellations, and notes the absence of regulatory classification disclosure Administrative Licenses and Regulatory Classification During the reporting period, the company completed the relocation of 5 branches and 6 brokerage offices, and the cancellation of 2 offices - During the reporting period, the company completed the relocation of 5 branches, 6 brokerage offices, the cancellation of 2 offices, and the renaming of 1 institution[1674]