Group 1: Stablecoin Regulation in Hong Kong - The "Stablecoin Regulation" in Hong Kong will take effect on August 1, with strict standards for issuers and high entry barriers, resulting in only a few institutions likely to receive licenses initially [1] - Licensed stablecoins must correspond to specific uses, particularly related to trade, especially cross-border trade, and Web 3.0 applications [1] - The Hong Kong Monetary Authority's (HKMA) stablecoin sandbox program is experimental, allowing industry participants to test application scenarios and share experiences, but does not guarantee licensing [1] - The regulation provides a comprehensive framework for issuers, ensuring that similar risks receive the same regulatory treatment, promoting healthy and sustainable industry development [1] Group 2: Cross-Border Wealth Management - Initially, only about 1.5% of southbound funds were directed towards fund products under the cross-border wealth management scheme, but this has increased to 40% as mechanisms improve and investor understanding grows [1] - The HKMA is actively promoting the cross-border wealth management 3.0 initiative to further enhance the sales process, with the current scheme being experimental within the Greater Bay Area [1] Group 3: Hong Kong Monetary Policy and Market Conditions - Low Hong Kong dollar interest rates are seen as beneficial, with continuous capital inflow since May, supported by a strong stock market and a vibrant new stock market [2] - The interest rate spread between the Hong Kong dollar and the US dollar has widened to 3-4%, potentially leading the HKMA to intervene if the situation persists post half-year settlement [2] - Hong Kong's strong foreign exchange reserves and high liquidity are viewed as buffers against current market conditions, with opportunities arising from international investors seeking diversified asset allocation [2]

Core Insights - Guosen Securities reported a strong financial performance for 2024, achieving operating revenue of 20.167 billion yuan, a year-on-year increase of 16.46%, and a net profit of 8.217 billion yuan, up 27.84%, outperforming the industry and large brokerages [2][3][4] Business Performance - The investment and trading segment saw remarkable growth, with revenue increasing by 68.86%, contributing 44.64% to total revenue [5][6] - Wealth management and institutional business generated 8.810 billion yuan in revenue, a 17.97% increase, supported by a digital transformation strategy [4][6] - Asset management revenue rose to 0.852 billion yuan, reflecting a 60.55% increase, with total net asset management scale reaching 144.764 billion yuan [6] Market Position - Guosen Securities maintained a strong market position, with brokerage client assets exceeding 2.4 trillion yuan, an 11% increase year-on-year, and a market share in the stock and fund market of 2.75%, up approximately 15% [4][6] - The company completed 11.17 underwriting projects, ranking ninth in the industry, and raised 12.605 billion yuan, ranking sixth [4] Regional Focus - As a major player in the Guangdong-Hong Kong-Macao Greater Bay Area, Guosen Securities has supported 92 IPOs and 64 refinancing projects, with a total financing scale of approximately 125.6 billion yuan [7] - The company is actively involved in cross-border financial services, participating in the "Cross-Border Wealth Management Connect" pilot program [7][8]

Core Viewpoint - The company demonstrated strong resilience and vitality in a complex market environment, achieving a significant after-tax profit increase of 73% year-on-year, with all business segments showing notable revenue growth, maintaining its leading position in the industry [1] Group 1: Wealth Management Performance - The company expanded its high-quality customer base and developed a balanced and robust diversified product matrix, resulting in a 13% year-on-year increase in commission and fee income to HKD 439 million [2] - The company received regulatory approval to conduct virtual asset brokerage services, enhancing its offerings to clients [2] - The launch of the investment-grade bond fund aligns with investors' varying risk preferences and investment goals [2] Group 2: Cross-Border Financial Services - The company focused on customer needs, leading to a 20% year-on-year increase in net income from financial products to HKD 912 million [3] - It leveraged strategic opportunities from the deepening interconnectivity between mainland China and Hong Kong, providing seamless cross-border financial services [3] Group 3: Corporate Financing Business - The company participated in 232 bond issuance underwriting projects, a 59% increase year-on-year, with a total issuance amount of approximately HKD 389.1 billion, up 85% [4] - In equity business, the company completed three IPO sponsorship projects, raising approximately HKD 1.7 billion [4] Group 4: ESG Initiatives - The company completed 78 ESG bond issuance projects, a 123% increase year-on-year, with an issuance scale of nearly HKD 163.6 billion, marking a 125% increase [5] - The company achieved carbon neutrality for the second consecutive year through its participation in carbon offset projects [5] - The company received high praise for its sustainable development efforts, improving its ESG ratings to A-level from multiple rating agencies [5] Group 5: Future Outlook - The company aims to enhance its cross-border financial service capabilities and assist high-net-worth clients in global asset allocation and wealth preservation [6] - It will focus on maintaining stable and growing market value through effective capital operations and transparent information disclosure [6]

Core Viewpoint - The "Cross-Border Wealth Management Connect" 2.0 program is a financial innovation in the Guangdong-Hong Kong-Macao Greater Bay Area, allowing investors from mainland China and Hong Kong/Macao to invest in qualified financial products through a closed-loop funding channel, which has gained significant popularity among residents in the region [1][4][5]. Group 1 - The "Cross-Border Wealth Management Connect" allows for broad investment opportunities, enabling investors to diversify their portfolios and access high-quality assets in the Hong Kong and Macao markets, thus mitigating risks associated with single-market investments [7]. - The program lowers the entry barriers for cross-border investments by increasing the investment limit to 3 million RMB per individual, which does not consume personal foreign exchange quotas, facilitating easier access to investment services through mainland brokers [7][8]. - The initiative is part of a national strategy and is directly supervised by regulatory bodies such as the central bank and foreign exchange administration, ensuring that all products are rigorously vetted, thus maintaining a relatively controlled risk environment [8].

Summary of Conference Call Company and Industry Overview - The conference was held by State-Taiwan Security International, focusing on the company's performance and business development in 2024 [1] - The global economy is experiencing a downturn, with geopolitical uncertainties and global trade friction affecting the Hong Kong capital market [1] Key Financial Performance - The Hengsheng Technology Index increased by 18.7% year-on-year, with a daily trading volume of Hong Kong stocks rising by over 25% [2] - The total amount of IPO financing in the Hong Kong stock market reached 87.5 billion Hong Kong dollars, growing nearly 90% in 2023 [2] - The company's total assets at the end of 2024 were 1,301.73 billion yuan, up 21% from the end of 2023 [3][13] - The company achieved a tax return of 73%, with profits maintained since the last report [3] Revenue Breakdown - The company's income rose across all sectors, with commission and cost-benefit income reaching 8.72 billion Hong Kong dollars, a 26% increase [3] - Internal revenue increased by 28% to 23.14 billion Hong Kong dollars, driven by a market opportunity to increase holdings in high-quality fixed income securities [4] - Interest income from fixed income securities surged by 188% to 5.53 billion Hong Kong dollars [4] - Wealth management distribution revenue was 19.19 billion Hong Kong dollars, accounting for 43% of total revenue, benefiting from the recovery in Hong Kong stock trading volume [5] Business Development and Strategy - The company is focusing on enhancing its service capabilities, particularly in cross-border financial services and digital wealth management [8][9] - The company has launched a new app, offering 120 different funds and structured products [8][9] - The company is actively involved in the IPO market, with a rich pipeline of projects expected to grow significantly compared to the previous year [10] Cost Management and Financial Health - The company has seen an increase in financing costs due to higher market interest rates, but is implementing measures to optimize financing channels and manage costs effectively [14][15] - The company maintains a healthy financial structure, with a bank credit balance of 38.68 billion Hong Kong dollars and a usage rate of 15% [6] Market Outlook and Future Plans - The management anticipates a bullish market in Hong Kong, driven by increased foreign investment and supportive government policies [23][24] - The company plans to leverage opportunities in high-rated, high-liquidity fixed income securities, with expectations of reduced financing costs as interest rates decline [20] - The focus will be on diversifying financial products and enhancing asset management capabilities to adapt to market changes [19][21] Additional Insights - The company has been recognized for its ESG efforts, achieving an MSCI rating of A and maintaining its status as a signatory of the UN Global Compact [12] - The management emphasized the importance of investor returns, proposing a stable dividend policy with an annual payout ratio of 88% [7] This summary encapsulates the key points discussed during the conference call, highlighting the company's performance, strategic direction, and market outlook.