GF SECURITIES CO., LTD. (“GF Securities” or the “Company”, stock code: 1776.HK; 000776.SZ， the Company and consolidated subsidiaries (subsidiaries), the “Group”) is pleased to announce its annual results for the 12 months ended December 31, 2018 (the “Reporting Period”).
Facing complicated and severe capital market environment in the PRC and overseas, the Company accelerated the transformation pace of traditional businesses, optimized customer structure, devoted to the development of technology finance, enlarged the establishment of the research and development team, achieved the maintenance of its industry-leading positions of various main operating indicators. During the Reporting Period, total revenue and other income of the Group was RMB22,817 million, net profit attributable to owners of the Company was RMB4,300 million.
Mr. Sun Shuming, the Chairman of GF Securities, said in the results report that: the year of 2018 was the 40th anniversary of the reform and opening up, was the opening year for the overall implementation of the guiding principles of the 19th National Congress of the Communist Party of China (CPC), was also an important year for comprehensively implementing the Company’s new five-year strategic plan. Facing the complicated operating environment, the Company still managed to maintain top position in the industry in terms of various key operating indicators in 2018. In 2019, the Company will make full use of its geographic, cultural and professional advantages to actively participate in the construction of the Guangdong-Hong Kong-Macao Greater Bay Area and contribute its wisdom, solutions and strength in building an international first-class bay area and world-class city.
Continuously Optimized Customer Structure & Investment Banking Business Maintained at the Forefront of the Industry
To adapt to the transformation in economic structure, changes of market environment and regulatory policies, in 2018, the Company actively optimized investment banking customer structure, on the basis of continuously consolidating the advantages of high-quality small and medium enterprises customers, the equity financing business concentrated in industries with autonomous core technology, such as new economy, advanced manufacturing, artificial intelligence and biotechnology. The customer structure gradually expanded to large state-owned enterprises, top private enterprises or enterprises of leading new economy.
During 2018, the Company completed 20 equity financing projects for which the Company acted as a lead underwriter, ranking 5th in the industry; Among these projects, the Company acted as a lead underwriter for 7 IPOs, ranking 6th in the industry and the lead underwritten amount was RMB3.795 billion, ranking 7th in the industry. The Company sponsored a total of 233 companies listed on the NEEQ as the lead brokerage, of which there were 32 innovative enterprises, ranking 6th in the industry. In addition, the Company acted as a financial advisor for 10 material asset restructurings (including the CSRC M&A and Restructuring Committee approved projects and non-administrative material asset restructuring projects), ranking 5th in the industry, In addition, in respect of the overseas investment banking business, the Company carried out such business primarily through its indirectly wholly-owned subsidiary, GF Capital (Hong Kong). During 2018, GFHK, a wholly-owned subsidiary of the Company, completed 19 deals by acting as a lead underwriter (including IPO, refinancing and bond offering), financial advisers and mergers and acquisitions.
Wealth Management Developed Steadily & Technology Finance Continued to Exert Strength
During 2018, the Company took wealth management, institutional brokerage, technology finance and integration as the four driving forces and took the compliance risk control and system reformation as its forceful support, to steadily promote the transformation of wealth management business.
Currently, the Company has rolled out its self-developed technology financial platforms such as cloud services platform, micro-service platform and robot investment adviser platform. The Company has also rolled out the first big data based and full chain quantitative investment research cloud platform as well as comprehensive smart service platform of the industry, GF-SMART, through cooperative research and development, which lays a solid foundation for the subsequent development of the Company’s technology finance. As at the end of 2018, the number of the Company’s mobile-phone securities users exceeded 22.02 million, representing a year-on-year increase of approximately 40%; the number of subscribers of the Company’s WeChat account was over 3.00 million; the Beta Bull (貝塔牛) smart investment advisory system served over 700,000 customers accumulatively with sale amount of financial products of RMB1.86 billion at the same time. The sales and transfer number of products of the Yitaojin E-commerce platform amounted to RMB241.7 billion (including GF Golden Cash Return Collective Asset Management Scheme).
In the area of overseas asset management business, GFHK, a wholly-owned subsidiary of the Company, provides consulting services for and manages various investment instruments as well as provides brokerage services to high net worth individuals and retail customers, covering financial products such as stocks and bonds listed on the Hong Kong Stock Exchange and other overseas exchanges, using self-developed Yitaojin (易淘金) international version trading system to focus on the development of overseas wealth management business. In respect of the field of futures brokerage business, the Company provides trading and settlement services for customers in major international commodity market through GF Futures (Hong Kong), a wholly-owned subsidiary of GF Futures and GF Financial Markets (UK) Limited, a wholly-owned subsidiary of GF Futures (Hong Kong).
Vigorously Developed Capital Intermediary Business & Exceptional Investment Research Ability Maintained at the Industry-Leading Position
In the trading and institution business segment, GF Securities continues to cultivate capital intermediary business. During 2018, the income of fixed income sales and trading business reached RMB4.551 billion, representing an increase of 21.70% comparing to the same period of last year, the Company ranked 2nd among securities firms in terms of trading volume of bonds in China. In February 2018, the Company was granted the honor of “Excellent Option Market Maker” of the SSE. In August, the Company was given the first batch of OTC options primary dealer qualification. In November, the Company was qualified to conduct pilot cross-border business and credit derivatives business, etc.
Meanwhile, the investment research capability of GF Securities maintains at the leading position in the industry. The Company’s equity research covers over 669 listed companies in the PRC, covering 29 industries in the PRC, and over 57 companies listed on the Hong Kong Stock Exchange. From 2015 to 2017, the Company ranked 5th in the “Domestic Best Research Teams(本土最佳研究團隊)” of New Fortune (《新財富》). In 2018, the Company was ranked with top research and development team by Insurance Assets Management Association of China(IAMAC中國保險資管), Crystal Ball(水晶球) and Golden Bull Award(金牛獎).
Group Management & Significant Transformation in Investment Management Business Performance
In 2018, the performance of the investment business of the subsidiaries of the Company was remarkable. GF Asset Management, a wholly-owned subsidiary of the Company, is primarily engaged in asset management to illustrate the customer's value-added and value-added financial assets. Under the direction of new policies in relation to asset management, GF Asset Management steadily progressed with transformation to high-quality organic growth. As at the end of 2018, the average monthly size of assets under active management ranked third in the securities industry. GF Xinde, a wholly-owned subsidiary of the Company, is primarily engaged in private fund management business. As at the end of 2018, GF Xinde set up and managed 34 private funds. The total size of customers’ assets under management amounted to approximately RMB10 billion. As at the end of 2018, GF Xinde and the funds under its management completed 243 equity investment projects, of which 20 projects were listed through IPO. GF Xinde exited sixty projects through means such as the merger of listed companies.
The Group carries out public fund management services mainly through its controlled subsidiary, GF Fund, and associate company, E Fund. As at the end of December 2018, the publicly offered funds managed by GF Fund have reached RMB468.445 billion, representing an increase of 67.34% as compared to the end of 2017, and the total fund size excluding money market funds and short-term wealth management bond funds was RMB198.92 billion, ranking sixth in the industry. The publicly offered funds managed by E Fund have reached RMB654.028 billion, representing an increase of 7.63% as compared to the end of 2017, and the total fund size excluding money market funds and short-term wealth management bond funds was RMB255.323 billion, ranking first in the industry.
The annual report showed that, the year of 2019 is a critical year for the Company’s five-year strategic plan for 2017-2021, the Company will leverage on the market-oriented mechanism, accelerate the transformation pace and continue to comprehensively promote the cultivation of transformation and competitive advantages of investment banking, wealth management, trading and institution as well as investment management businesses, enhance the professional ability to serve high net worth individuals, medium and large quality enterprises and institutional clients, and steadily improve its position in the securities industry and the Guangdong-Hong Kong-Macao Greater Bay Area.