Investment Banking and Investment Management Businesses Achieved Outstanding Performance
HONG KONG — GF SECURITIES CO., LTD. (“GF Securities” or the “Company”, stock code: 1776.HK; 000776.SZ) is pleased to announce its annual audited and consolidated results for the year ended December 31, 2016 (the “Reporting Period”).
In 2016, the economic situation in the PRC and abroad was complicated and the Chinese economic growth faced continuous downside pressure. Against the backdrop of decrease in the overall capacity and profitability of the securities industry, the Company consistently adhered to the basic principle of “Making Progress While Maintaining Stability” and managed to achieve good results in the market condition characterized by slower economic growth, stricter supervision and increasing competition and various major operation indicators continued to rank top in the industry, which created good returns for its shareholders. As of 31 December 2016, total assets of the GF Securities amounted to RMB 359,801 million, total revenue and other income of the Company was RMB 27,488 million, profit before income tax was RMB 10,705 million, net profit attributable to owners of the Company was RMB 8,030 million.
The principal business of the Company can be divided into four segments, namely investment banking, wealth management, trading and institutional client service and investment management. During the Reporting Period, the investment banking and investment management businesses of the Company achieved outstanding performance. Total revenue and other income from the investment banking business segment was RMB 2,773 million, representing a year-on-year increase of 32.02%; and total revenue and other income from the investment management business segment was RMB 6,051 million, representing a year-on-year increase of 6.20%. In terms of the wealth management business segment and the trading and institutional client services business segment, GF Securities continued to promote the strategic transformation based on the Internet and internationalization, and achieved remarkable results in the promotion of the development of Internet finance and cross-border businesses, which laid a solid foundation for deepening the development of an integrated business system.
Investment banking and investment management businesses achieved outstanding performance, ranking top in the industry
The Company continued to pursue its four development strategies, namely “Customer-oriented Integrated Operation”, “Resource Allocation-Type Investment Banking”, “Capital Intermediary Profitability Model” and “Professional Service”, which further strengthened and improved its market position and profitability. During the Reporting Period, the Company completed 54 equity financing projects, ranking 3rd in the industry; the lead underwritten amount was RMB70.046 billion, ranking 6th in the industry. Among these projects, the Company acted as a lead underwriter for 16 IPOs, ranking 2nd in the industry. The Company’s commission and fee income from stock underwriting and sponsorship was RMB 1,190 million, representing a year-on-year increase of 25.16%.
The Company achieved good results in respect of its bond business and made significant breakthrough in respect of large bond projects. During the Reporting Period, the amount of bonds underwritten by the Company by acting as lead underwriter ranked 6th in the industry. The Company recorded commission and fee income from the bond underwriting business of RMB 893 million during the year, representing a year-on-year increase of 159.55%.
Overseas M&As of the Company developed rapidly and the activeness of M&A restructuring generally continued the increasing momentum. During the Reporting Period, the Company acted as a financial advisor for 27 material assets restructurings (including the CSRC M&A and Restructuring Committee projects and non-administrative material assets restructuring projects), ranking 1st in the industry. The Company recorded commission and fee income from M&A and restructuring financial advisory of RMB 299 million.
The asset management business of the Company also achieved remarkable results. As at the end of the Reporting Period, the total size of assets under management of GF Securities Asset Management (Guangdong) Co., Ltd. (“GF Asset Management”) ranked 6th in the securities industry, and the management size of its collective schemes ranked 1st. GF Asset Management has managed 105 collective asset management schemes, with a collective asset scale of RMB 368.106 billion, representing a year-on-year increase of 23.91%; GF Asset Management has managed 440 targeted asset management schemes with an asset scale of RMB 321.135 billion, representing a year-on-year increase of 47.52%; GF Asset Management has managed 41 specific asset management schemes with an asset scale of RMB 27.172 billion, representing a year-on-year increase of 69.59%. The leasing asset securitization products and asset securitization product of receivables issued by GF Asset Management in the exchange market maintained the top ranking in the industry, thus, establishing the industrial influence and leading advantages.
Internet finance promotes business transformation, international business accelerates development
In 2016, in respect of the Internet finance, the Company continued to maintain a leading position, promoted comprehensive Internet-enabled services, and continuously improved its customer acquisition and transformation capacity. Meanwhile, GF Securities Internet Investor Education Base (edu.gf.com.cn) constructed and operated by the Company was accredited as national securities and futures investor education base, which was the first Internet base in the industry. Meanwhile, the Company constructed and completed five major projects including Beta Bull robot investment advisory system, Points Mall service system, Jingubang investment advisory business new model, investment advisory management platform and assets allocation platform, and focused on the effective promotion of the transformation of the Company to wealth management. As at the end of the Reporting Period, the number of mobile securities users was approximately 10 million, the number of subscribers of the Company’s WeChat account was approximately 3 million and the number of Golden Key system customers was over 2.3 million. During the Reporting Period, the sales and transfers on the Yitaojin E-commerce platform was RMB72.4 billion. the WeChat H5 webpage system of the Company commenced operation in 2016 in order to integrate various Internet finance platforms.
In promoting the development of its international business, GF Securities sped up its pace of development. The Company provided brokerage services for high-net-worth individuals and retail customers primarily through its indirectly wholly-owned subsidiary, GF Securities (Hong Kong) (“GFHK”), covering stocks listed on the Hong Kong Stock Exchange and other overseas exchanges. During the Reporting Period, GFHK recorded total revenue and other income from the securities brokerage business of RMB 293 million, representing a year-on- year increase of 8.36%. In addition, the Company vigorously expands the FICC business. The Company built an overseas FICC investment platform mainly through GF Global Capital Co., Ltd., its indirectly wholly-owned subsidiary, with the assets allocated to 18 countries and regions including Asia, Europe and the United States of America, covering the diversified investment fields including bonds and structured products. In 2016, the Company actively developed counterparties of cross-border underlying assets and became the first securities firm to conduct OTC options transactions linked with overseas underlying assets under the SAC Agreement in the PRC. The integrated service nature of institutional clients in the structured notes business of the Company was apparent; institutional client customization for this year accounted for more than 90% of the total volume of new additions. Diversity of floating income products continued to increase; underlying assets of linked structured notes had coverage over various domestic and overseas markets since 2016, including overseas individual stocks, overseas indices; crude oil ETF, commodities, NEEQ indices, etc., to satisfy the customized investment demand of investors, and our product diversity was in a leading position within the industry.