Enhanced Capabilities Facilitated by Platform Innovation in Wealth Management
According to the Annual Report, the Company has a customer base of nearly 14 million with total customer account assets exceeding RMB3.35 trillion as of the end of the Reporting Period. The Company’s equity and fund trading volume amassed to RMB20.57 trillion, tapping the market’s underlying potential while maintaining its leading position in the industry.
During the reporting period, the Company fully promoted digital transformation, built an industry-leading wealth management platform, and optimized the headquarters-driven integrated service model. The mobile service platform “ZhangLe Fortune Path” underwent several upgrades to optimize its digital service offering; according to Analysys statistics, the app’s NMAU (number of monthly active users) in December 2019 was 7.79 million, continuing to rank first among all securities companies’ apps. During the Reporting Period, the Company comprehensively rebuilt its wealth management work platform and launched “AORTA”, a cloud-based platform that serves as an important mid-end support for both customers and front-end investment advisors. Through “AORTA”, the Company has provided prompt and targeted strategies and solutions to over 2,000 investment advisors in China, while ensuring the delivery of professional and high-quality services to the customers. According to statistics from the Securities Association of China, investment advisors comprise over 30% of employees of the Company by the end of the Reporting Period.
In terms of financial products sales, the Company endeavored to strengthen the use of its investment research system in providing efficient insights and supporting customer product allocation, so as to enhance the competitiveness of all financial products. In 2019, the sales volume of financial products achieved RMB374.36 billion, while the number of financial products reached 5,533.
With regards to capital-based intermediary business, the balance of margin financing and securities lending business of the Company amounted to RMB67.13 billion with a market share of 6.59% and an overall maintenance guarantee ratio of 314.66%, ranking first in the industry.
Expanded New Economy Client Ecosystem Led by Investment Banking Business
With the industry’s inaugural digital service system for institutional clients, the development of the Company’s digital capabilities in institutional services accelerated with the aim to build a digital financial ecosystem together with its clients. In 2019, the Company launched the 2.0 version of “Xing Zhi” mobile app, an independently developed digital platform that supports online application of IPO, private placement and convertible bond projects, client engagement in research activities, and customization of financial products for institutional clients, empowering to expand client network for institutional services.
With the strategy to focus on emerging markets and high-quality clients in technology industry, the Company’s investment banking business reinforced the synergy between domestic and overseas businesses, and built up the industry-leading brand influence and a client ecosystem in the comprehensive health and TMT industries.
During the Reporting Period, the Company was the industry front runner with 14 CSRC approved M&A and restructuring transactions, amounting to an outstanding RMB 128.07 billion. Among which, the leading restructuring project – by transaction amount disclosed – of Shuanghui I&D, the largest Chinese semiconductor M&A between China’s Wingtech Technology and Nexperia Holding, and Gree’s mixed ownership reform in partnership with Hillhouse Capital were some of the flagship projects.
According to Wind statistics, the Company’s equity underwriting in 2019 amounted to RMB132.10 billion, ranking third in the industry. During this period, the Company partook in the listing of five enterprises onto the SSE STAR Market, including HYC Technology, the first project on the STAR Market. According to SSE statistics, as of the end of the Reporting Period, there were 19 Huatai Securities sponsored companies accepted by the STAR Market, firmly cementing the Company’s leadership position.
The Company continued to promote and develop its platform-based investment and trading capabilities, while increasing OTC derivatives trading volume, boosting market making volumes for exchange-traded options, and maximizing the scale of income certificates. In addition, the Company’s bond settlement volume soared to second place in the industry.
Industry Leading Position in Active Asset Management AUM
The Company’s asset management business was further augmented through enhanced business innovation, strengthened transformation towards active investment management, and a “fixed income +” product-centric strategy. During the Reporting Period, the revenue of Huatai Asset Management achieved RMB2.59 billion, growing to a new record high. According to statistics from the Asset Management Association of China, the private active asset management scale of Huatai Asset Management averaged RMB252.25 billion on a monthly basis as of the end of Q4 2019, ranking third in the industry. According to Wind statistics, Huatai Asset Management’s scale of enterprise ABS (asset securitization) issuance during the Reporting Period amounted to RMB90.89 billion, ranking second in the industry.
The private equity fund management business continued to focus on the comprehensive health and TMT industries, with a total AUM of RMB49.59 billion across 40 investment projects during the Reporting Period. Suzhou BrightGene, Jiangsu Bioperfectus Technologies and Shenzhen Lifotronic Technology, invested by Huatai Purple Gold Investment, were listed on the STAR board in 2019; in light of the recent COVID-19 pandemic, the COVID-19 Nucleic Acid detection kit developed by BioGerm was among the first batch to have obtained the Medical Device Registration Certificate on January 31, 2020, while Vazyme Biotech has developed a novel antibodies detection kit, both of which have played a crucial role in combating COVID-19.
Further Growth Fueled by Development in International Business
The international business of the Company achieved numerous historical accomplishments and breakthroughs in 2019. The Company’s issuance of GDRs as the first firm to be listed on the London Stock Exchange through the Shanghai-London Stock Connect raised USD1.69 billion in the overseas market; this was the largest IPO in the global depositary receipts market since 2013, and with the successful listing the Company also became a “A+H+G” financial institution listed in three markets. The Company’s U.S.-based subsidiary AssetMark also successfully listed on the New York Stock Exchange, raising USD316 million to enhance its capital base and allow for long-term development of its distinctive financial service platform. In addition, Huatai Securities (USA) obtained a broker-dealer license in the U.S. to carry out broker-dealer business in the country, while Huatai Financial Holdings (Hong Kong) forged ahead against market adversity, to emerge as one of the leading Chinese-funded securities companies in Hong Kong. As of the end of the Reporting Period, the international business segment contributed to 12.48% of the Company’s total revenue and other income.
During the Reporting Period, Huatai Financial Holdings (Hong Kong) completed 14 IPO projects and 42 bond issuance projects, contributing to approximately HKD19.73 billion in underwriting amount. In addition, it completed 4 financial advisory projects and 6 structured investments and financing projects. In 2019, Huatai Financial Holdings (Hong Kong) obtained the UK cross-border Global Depositary Receipts conversion institution certification as well as membership to the London Stock Exchange.
As one of the major financial institutions in China, the Company is dedicated to fulfill its social responsibility with its financial expertise. The Company improved its ESG (Environment, Social and Corporate Governance) management structure, provided financing services for technologically innovative and environment-friendly enterprises, and continued to promote the development of green finance; in 2019, the Company underwrote 31 green bonds with the total financing scale of RMB55.48 billion. Meanwhile, as a responsible corporate citizen actively engaged in promoting sustainability, the Company’s corporate philanthropy project “Yixin Huatai”, continued to improve the level of professional operations, and partnered with NGOs to carry out a series of projects that focus on protecting the Yangtze River source region ecosystem and supporting the distressed children both physically and mentally. Amid the crucial time of containing the spread of COVID-19, the Company was able to fully utilize its professional expertise to support industries and enterprises in key regions financially; with the advanced financial technology, the Company was able to provide more diversified online services for individual and institutional clients. Moreover, the Company actively integrated advanced resources within the healthcare and logistics ecosystems, to effectively and efficiently provide targeted support to the areas of Hubei Province most in need.
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