All segments of Haitong Securities achieved revenue growth. However, only the gross profit margin of investment banking, trading and institutional business increased, while the rest decreased. Among them, the gross profit rate of financial leasing business decreased by 9.26%, and the operating cost of the business increased by more than 50% year on year.
Haitong Securities explained in the annual report that its leasing business is mainly operated by Haitong Hengxin, whose full name is Haitong Hengxin International Leasing Co., Ltd., which landed on the Hong Kong Stock Exchange in June 2019. It is the first listed securities company in China that is a financial leasing company.
Main business of Haitong Securities by industry in 2019. Photo source: annual report of Haitong Securities in 2019
It is worth mentioning that Haitong Securities has accelerated its overseas layout, and the proportion of overseas revenue ranks first among the five securities companies that have published the annual report so far.
In the context of accelerating the opening up of securities companies, some investment bankers recently said to the Times financial analysis that the global layout will become one of the important areas for domestic securities companies to compete with foreign securities companies.
According to the 2019 annual report of Haitong Securities, its overseas business revenue is 8.993 billion yuan, accounting for 26.12% of the total revenue; its gross profit margin of overseas business is 36.48%, which is less than that of domestic business (39.69%).
Focusing on the industry level of securities companies, the restriction on the proportion of foreign shares of securities companies was cancelled on April 1, which also means that the financial opening will be accelerated and foreign securities companies will enter the domestic market to compete with domestic securities companies.
Before that, a famous national securities investment banker analyzed the times finance and economics, in recent years, the momentum of Chinese enterprises going out has continued to grow, and the demand for cross-border projects is relatively large. Most of the main positions of domestic securities companies are still in the domestic market, and the global layout still needs to be strengthened. In this context, some foreign securities companies with a long history and perfect global layout may have more advantages in some cross-border projects.
According to choice data, as of the evening of March 26, there were five securities companies that announced 2019, with Haitong Securities accounting for the highest proportion of overseas revenue in operating revenue.
As of the evening of March 26, the overseas income of securities companies that have announced their performance in 2019. Data source: choice data
In terms of investment banking, Haitong international has completed 49 IPO projects and 58 equity financing projects in the global market, mainly in Hong Kong market. Haitong international also participated in the US IPO of Ruixing coffee, the second largest IPO of Asian companies on NASDAQ this year. In addition, Haitong international has also completed 247 bond issuance projects, which is in a leading position in the Chinese real estate bond market. In terms of asset management business, Haitong Internationals asset management scale reached HK $53.5 billion.
In terms of trading and institutional business, Haitong international became the first Chinese market maker of NASDAQ in 2018. After one years development, the number of American shares covered by Haitong international increased to 32, and the number of Hong Kong shares covered by market option reached 78. Nearly 100 institutional customers have directly traded through their algorithms.
In addition, Haitong international also reorganizes ficc business into three units: credit products, macro and hybrid products, and institutional customer solutions. At the same time, the company also said in its 2019 annual report that the interest rate and credit product trading business has realized the daily provision of bilateral liquidity quotes to nearly 1000 institutional customers around the world, and the business income of two trading desks in New York and London has grown steadily, which is expected to become a new profit center outside the Asia Pacific region.
Ficc business of 10 billion fixed additional issuance capacity
In fact, Haitong Securities divides ficc business into trading and institutional service business, with revenue of 8.186 billion yuan, a year-on-year increase of 891.07%, and gross profit margin of 239.04%.
Haitong Securities pointed out in its 2018 annual report that in 2018, the trend of stock and bond market in domestic market is divided, the annual decline of CSI 300 index is nearly 25%, and the total market value of Shanghai and Shenzhen stock markets is 13.2 trillion yuan, 23% lower than that at the end of 2017, only second to the 2008 global financial crisis; the annual decline of circulation market value of the two stock markets is 9.5 trillion yuan, the largest decline since the establishment of China stock market, which is the largest drop for the bank The industry equity related investment brings greater pressure. In that year, fixed income investment income became an important growth point of industry profits.
In 2019, the market environment has improved. Haitong Securities also vigorously develops ficc business at home and abroad. Throughout the annual report of Haitong Securities in 2019, five keywords can be found by searching ficc, while in 2018, only two keywords can be found by Haitong Securities.
Public information shows that compared with overseas securities companies, domestic securities companies ficc business started late, but in recent years it has become an important direction of securities companies transformation.
According to time finance, in February this year, Haitong Securities released the plan for A-share shares of non-public Development Bank (second revision draft). According to the plan, the total amount of the increase is no more than 20 billion yuan, which will be used for the five major projects. Among them, the proposed investment amount of the project of expanding the investment scale of ficc and optimizing the structure of assets and liabilities is no more than 10 billion yuan, which is the highest among the five projects. At present, the fixed increase application has been approved by the SFC.
In February this year, Haitong Securities raised investment projects in the plan for a shares of non-public Development Bank (revised twice). Image source: choice data
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Source: time finance Author: he Yunhong editor in charge: Yang bin_nf4368