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GF Securities Announced 2019 Annual Results

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(27 March 2020, Hong Kong) GF Securities Co., Ltd. ("GF Securities" or the "Company", together with its subsidiaries, the “Group”; HKSE: 1776; SZSE: 000776), one of the most influential securities companies in China, announced its annual results for the twelve months ended 31 December 2019 (the “Reporting Period”). In 2019, GF Securities continued to maintain favorable development momentum with overall good operating performance, and achieved a significant increase in key financial indicators, such as revenue and net profit. During the Reporting Period, the Group’s total revenue and other income recorded RMB30,077 million, representing a year-on-year increase of 31.82%. The net profit attributable to owners of the Company rose by 75.32% year-on-year to RMB7,539 million.

Mr. Sun Shuming, the Chairman of GF Securities Co., Ltd., said: “Facing the complicated internal and external environments in 2019, GF Securities’ management has cultivated with all staff in a cohesive way and the Company’s respective key operational indicators continued to stand at the top of the industry. The year 2020 is a decisive year for building China into a moderately prosperous society, the last year of China’s 13th Five-year Plan, and a critical year for poverty alleviation. Facing the sudden outbreak of novel coronavirus disease at the beginning of the year, the Company responded quickly with assistances including from capital and resources to financial services, proactively fulfilling our social responsibilities as a corporate citizen.”

Speeding up the transformation of the investment banks customer structure and ranking 4th in the industry by the number of acting as a lead underwriter in equity financing projects

In 2019, GF Securities continued to speed up the strategic transformation of the customer structure and continually expanded and reserved large customers with high quality. Actively responding to the national strategic deployment and regulatory requirements, the Company focused on the projects in the STAR Market and endeavored to develop, cultivate and recommend the listing of projects in the STAR Market. And the Company continuously improved the internal control system of investment banks by strictly controlling project risks and insisting on stable and balanced development.

During the Reporting Period, the Company completed 34 equity financing projects, for which it acted as a lead underwriter, ranking 4th in the industry. The equity financing lead underwritten amount was RMB26.614 billion, ranking 8th in the industry. Among these projects, the Company acted as a lead underwriter for 16 IPOs, ranking 4th in the industry and the lead underwritten amount was RMB8.96 billion, ranking 5th in the industry. For the debt financing business, the Company acted as the lead underwriter for 166 bonds, with a total underwritten amount of RMB135.929 billion, representing a year-on-year increase of 41.13%. As of the end of 2019, the Company sponsored a total of 64 companies listed on the NEEQ as the lead brokerage, of which there were 12 innovative enterprises.

Leading scientific and technological financial model in the industry to boost the transformation of wealth management business

In 2019, leveraging on financial technology, the Company made good progress in promoting the transformation of its business model to digitalization and intelligence and the transformation of its business lines from brokerage to wealth management, expanding institutional brokerage business and comprehensive business and other aspects.

In 2019, the Company endeavored to build a quick trading system for the brokerage business by constructing a full chain quick passage from day trading to day-end clearing, built Touyitong (投易通) trading platform as a trading service port for professional investors to provide them with algorithm transaction support and smart information warning for their positions, continuously improved the self-developed blockchain based ABS credible cloud system for monitoring the status of underlying assets in the CMBS commercial property special plan, implemented the strategic idea of data center and intelligent center and made continuous effort to optimize the big data and artifi­cial intelligence open platform (GF-SMART), developed the technical application of intelligent warning, intelligent recommendation, intelligent calling and knowledge map, established real-time, penetrating and continuous risk tracking and measurement to provide an integrated compliance and risk control capability coverage for the entire group and business, constantly pushed on the cloud evolution of the Company’s own infrastructure, integrated the idea of micro-service and DevOps at the platform level and laid a solid foundation for our business development. As of the end of 2019, the Company has in aggregate applied for 29 invention patents, 3 utility model patents and 12 software copyrights; among them, the Company has obtained 1 utility model patent and 12 software copyrights.

Benefiting from the continuously implement of financial technology strategy, the Company’s trading volume of stocks and funds increased by 33.37% year-on-year to RMB11.07 trillion (bilateral statistics) in 2019. As of the end of 2019, the number of the Company’s mobile-phone securities users exceeded 27.20 million, representing an increase of approximately 23% as compared to the end of last year; the number of subscribers of the Company’s WeChat account was over 3.00 million; during the Report Period, the sales and transfer amount of financial products of the Yitaojin E-commerce platform amounted to RMB366.2 billion (including GF Golden Cash Return Collective Asset Management Scheme); the Betanew (貝塔牛) smart investment advisory system served over 800,000 customers accumulatively with the sale amount of financial products of RMB22.8 billion.

Outstanding performance in trading and institution business while investment research capability maintaining excellent

In respect of trading and institution business, in 2019, the Company obtained the 2019 AA (highest) rating in terms of the SSE’s 50ETF market maker business, and ranked No.9 among securities firms in terms of the trading volume of bonds in China. As of the end of 2019, the Company provided market-making services for 102 NEEQ enterprises and was recognized as “Excellent Market Marker of the Year” and “Excellent Market Maker of the Year in Market-Making Size” by NEEQ. In respect of asset custody business, total asset scale of asset custody and fund service business provided by the Company as at the end of 2019 was RMB217.365 billion, representing an increase of 16.44% as compared to the end of 2018, of which the scale of trust products was RMB95.146 billion, and the scale of fund service products provided was RMB122.219 billion. The Company has issued 15,080 OTC products in aggregate with an aggregate amount of approximately RMB727.948 billion as at the end of 2019, with a market value of approximately RMB51.031 billion. Specifically, the Company issued 4,744 new OTC products with an aggregate amount of RMB103.948 billion during 2019.

Its wholly-owned subsidiary GF Qianhe actively carried out alternative investment business with its own funds. During the Reporting Period, GF Qianhe completed 19 new equity investment projects with a total investment of RMB0.806 billion. As of the end of 2019, GF Qianhe has completed 117 equity investment projects.

GF Securities’ investment research capability maintained its leading position and granted several major titles, including 1st in the “New Fortune’s Domestic Best Research Teams” again, “Top 5 Golden Bull Research Team” awarded by “China Securities Industry Analyst Golden Bull Award” for the sixth consecutive year and 2nd in the “Best Analyst Team” by “Institutional Investors • Caixin Capital Market Analyst Achievement Award” in 2019 for the first time. GF Securities’ equity research covers nearly 700 A shares listed company in the PRC in 28 industries and nearly 110 companies listed on the Hong Kong Stock Exchange. Currently, the Company is actively promoting the internationalization of research brands so far as permitted by and in compliance with laws and regulations.

Leveraging on the financial group edges to improve investment management capability

Leveraging on the financial group structure edges, GF Securities has been continuously strengthening investment management capability through its subsidiaries in 2019. As of the end of 2019, its wholly-owned subsidiary GF Asset Management had a net asset management scale of RMB297.214 billion and successfully issued two products transferred from large collectives to public offerings; its wholly-owned subsidiary GF Xinde set up and managed nearly 40 private funds and the total size of customers’ asset under management was near to RMB10 billion. GF Xinde and the funds under its management completed approximately 250 equity investment projects covering industries such as biomedicine, intelligent manufacturing and corporate service.

The Group’s controlled subsidiary, GF Fund, and associate company, E Fund maintained its leading position in the industry. As at the end of 2019, the publicly offered funds managed by GF Fund have reached RMB502.56 billion, representing an increase of 7.28% as compared to the end of 2018, and the total fund size excluding money market funds and short-term wealth management bond funds was RMB278.46 billion, ranking 7th in the industry; the publicly offered funds managed by E Fund have reached RMB730.870 billion, representing an increase of 11.75% as compared to the end of 2018, and the total fund size excluding money market funds and short-term wealth management bond funds was RMB405.086 billion, ranking 1st in the industry.

Looking ahead to 2020, GF Securities will further uphold the philosophy of a robust operation, strengthen internal control management and continue to deepen the promotion of transformation of investment banking, wealth management, trading and institutions, investment management businesses, as well as prudently implement the overall requirements of “leading the healthy development of the industry with cultural construction” by the regulatory authorities, further increase cultural soft power of the Company, and take on more important historical mission.