Multiple measures to promote both capital-light and capital-heavy businesses, profit increased significantly YoY
HONG KONG, March 28, 2024 /PRNewswire/ -- Shenwan Hongyuan Group Co., Ltd ("Shenwan Hongyuan" or the "Company") (stock code: 6806.HK; 000166.SZ) announced its annual results for the 12 months ended December 31, 2023 (the "Reporting Period").
During the Reporting Period, Shenwan Hongyuan adopted a progressive yet stable approach by continuing to increase strategic investment in capital-light businesses, enhance risk resilience in capital-heavy operations, and achieved excellent operational performance. Total revenue and other income of the Company reached RMB 31.916 billion, reflecting a year-on-year growth of 1.08%. Profit attributable to the Company's shareholders surged to RMB 4.606 billion, marking a 65.16% increase. Basic earnings per share also increased by 63.64% to RMB 0.18 per share. The weighted average return on equity reached 4.72%, an increase of 1.79 percentage points compared to the beginning of the year.
Equity and debt financing saw further progress despite headwinds, competitiveness of principal investment continued to improve.
During the Reporting Period, the Company's total equity underwriting scale reached RMB 14.633 billion, ranking 9th in the industry. The Company actively promoted the "Specialized, Refinement, Differential, and Innovation" strategy, vigorously developed inclusive financial services, and fully supported the development of small and medium-sized enterprises. During the Reporting Period, the Company's IPO underwriting scale in the Beijing Stock Exchange reached RMB 1.105 billion with six underwriting projects, ranking 1st in the industry in terms of the number of IPO underwriting projects.
The Company achieved RMB 262.054 billion in underwriting scale of bonds and served as the lead underwriter for 572 bond issuances, ranking 7th for both in industry. The Company's industry ranking, and market influence have steadily stabilized, receiving Class A rating in the corporate bond business practice from the Securities Association of China for four consecutive years. Sales scale of inter-bank sales business and local government bonds have both attained top positions in the market.
The Company has been actively utilizing its strengths in domestic and overseas connection to boost cross-border finance. During the Reporting Period, the reserve of overseas underwriting projects grew steadily. In terms of Hong Kong IPO projects, the Company served as underwriters for 11 projects, securing the 8th position in the industry. With a focus on large enterprises, and comprehensive state-owned enterprises, among others, the Company completed 126 overseas bond projects, ranking 5th in the industry.
For the Principal investment business, Shenyin & Wanguo Alternative Investment newly acquired eight new equity investment projects, and one co-investment project on the STAR Market. Among the existing equity investment projects, one project was successfully listed on the STAR Market. Hongyuan Huizhi further optimized asset allocation, vigorously strengthened collaboration services, and actively explored business transformation. It newly acquired 57 investment projects, the various businesses have shown steady development, and the market competitiveness has continued to improve.
During the Reporting Period, the Company achieved total revenue and other income of RMB 3.929 billion in terms of corporate finance business segment, representing a year-on-year increase of 10.20%. Among them, the investment banking business segment achieved RMB 2.035 billion, while principal investment contributed to RMB 1.893 billion.
Improved matrix customer services and accelerated the transformation of the wealth management business.
The Company actively strengthened its ability to acquire customers and investments, provided robust basic services, improved comprehensive service capabilities, and continued to promote the transformation of the wealth management business. Focusing on strengthening the construction of "power of channels, power of services, power of products, and power of digitalization", the Company increased investment in layout and enhanced market responsiveness. During the Reporting Period, the Company achieved a net income of RMB 2.820 billion from the agency trading business, and the number of new customers increased by 34.66% compared to last year. At the end of the period, client's securities under the custody of the Company amounted to RMB 3.96 trillion, and the number of customers and asset size further increased.
The Company focused on improving "power of product" construction, strengthened business layout of securities structured products, fixed investment products and index products, and continued to provide customers with professional and multi-level product services to meet the residents' wealth allocation needs. 2023, the financial products sold by the Company amounted to RMB 472.669 billion in total, increased by 18.19% compared to last year.
The Company closely focused on customers' needs to develop margin financing and securities lending business, comprehensively promoted the construction of the "1+N" platform, and steadily increased the scale of the margin financing business for institutional clients. As at the end of the year, the balance of the Company's margin financing and securities lending business was RMB 61.624 billion. Shenwan Hongyuan Securities and Shenwan Hongyuan Securities (Western) obtained the first batch of qualifications of margin financing and securities lending business of the Beijing Stock Exchange.
During the Reporting Period, the personal finance business segment of the Company recorded total revenue and other income of RMB 10.777 billion, representing a year-on-year decrease of 4.01%.
Actively transformed to asset-side services with steady development of capital-heavy business.
In terms of the FICC business, the Company adhered to the two-pronged approach of "principal investment" and "trading for clients' capital", continuously enriched profit models, and created a competitive business chain in the industry. Regarding the self-owned bond business, the Company fully utilized its investment and research strengths, with the investment returns steadily improved. In terms of trading for clients' capital business, the Company fully leveraged the advantages of customer resources and capabilities of product creation, and investment and trading. As a result, it ranked 4th in terms of bond investment consulting scale, and 3rd in terms of quotation repurchase scale at Shenzhen Stock Exchange. Besides, the scale of structured notes and new nominal principal of bond derivatives increased significantly. The Company ranked 3rd in the scale of new credit protection tools business.
In terms of equity sales and trading business, the Company consolidated the results of the non-directional reform, therefore cumulative new scale of OTC derivatives continued to grow. The Company maintained a rapid growth in cross-border business, with new scale more than doubled year-on-year. It also became one of the first batch of market makers to obtain the qualification for market making from the Beijing Stock Exchange, further enriching the market-making industry chain.
During the Reporting Period, the Company's institutional services and trading business segment recorded total revenue and other income of RMB 15.757 billion, representing a year-on-year increase of 5.28%.
Leveraged the formal operation of subsidiary to capitalize on professionalism.
The Company's subsidiary, Shenwan Hongyuan Securities Asset Management Co., Ltd. conducted operations during the Reporting Period. The active management scale improved to over 90%, through transformation promotion and structure adjustment. The Company issued a total number of 45 asset management plans of "fixed income + derivatives", representing an increase of 87.40% over last year. The newly added management scale of ABS business of the Company increased by 37.10% over last year and ranked 13th in the market in terms of the number of ABS issuance.
In terms of mutual fund management business, the Company has built up a core competitiveness of providing a high-quality service to customers. Relying on the construction of an integrated key assumptions platform of research, investment and risk control, SWS MU promoted the digitalization of the platform; total scale of AUM increased compared with the end of last year. In terms of private equity fund management business, Hongyuan Huifu continued to expand its business scope to promote industrial upgrades of key areas; Shenyin & Wanguo Investment established a full range of equity investment funds.
During the Reporting Period, the investment management business recorded total revenue and other income of RMB 1.453 billion, representing a year-on-year decrease of 19.97%.
Looking ahead, the securities industry will continue to assist the capital market in serving the high-quality development of the economy and play an essential role in scientific and technological innovation, modernized industrial system, preserving and increasing the value of residents' wealth, and preventing and resolving major risks. Shenwan Hongyuan will insist on becoming a first-class integrated financial service provider with its securities business as the core, and high-quality development as the main theme. The Company will seek progress while maintaining stability, adhere to "investment + investment banking" as its characteristics and fintech as empowerment, to create greater value for shareholders.
About Shenwan Hongyuan
Shenwan Hongyuan Group Co., Ltd (Stock code: 6806.HK; 000166.SZ) is a leading investment holding group focused on the securities business in China and committed to providing diverse financial products and services to its clients. The Group has established a longstanding leading position across multiple business lines in the China's securities industry with quality growth, including enterprise finance, personal finance, institutional services and trading, and investment management. In January 2015, Shenwan Hongyuan emerged from the merger between Shenyin & Wanguo Securities and Hong Yuan Securities which was the largest merger in the PRC securities industry at that time and listed on the Shenzhen Stock Exchange. In April 2019, Shewan Hongyuan issued H-shares and was successfully listed on the Hong Kong Stock Exchange.
