Guotai Junan International Holdings Limited · HKEX:1788
Guotai Junan International — H1 2020 Earnings Presentation
32 slides from Guotai Junan International's earnings presentation, August 2020
Slide 1: 2020 Interim Results Presentation
2020 Interim Results Presentation August 2020 Guotai Junan International Holdings Ltd | Stock Code:1788.HK | WeChat Account: GTJA_GJ | www.gtjai.com
Slide 2: Disclaimer
Disclaimer: By attending the meeting where the presentation is made, or reading the presentation materials, you agree to the following limitations and notifications. This presentation does not constitute an offer or invitation to purchase or subscribe for any securities or financial instruments or t
Slide 3: Agenda
Agenda Overview Page 4 Macro Environment | BCP | Key Deliverables Financial Review Page 8 Financials | Dividend | Revenue Mix & Breakdown | Costs | Balance Sheet | Liquidity Management Products & Services Page 15 Wealth Management | Loans and Financing | Equity Derivatives | DCM | ECM | Asset Manage
Slide 4: Macroeconomic Environment: Navigating through Rare Volatility
Macroeconomic Environment: Navigating through Rare Volatility 2020 Interim Results Shocks in Economy and Financial Markets (1H 2020) Central Banks’ Policies and Responses (1H 2020) • People’s Banks of China released liquidity through a series of targeted • Hang Seng Index -13% • GDP in mainland Chin
Slide 5: Business Continuity Plan Review: Consistency, Resilience and Agility
Business Continuity Plan Review: Consistency, Resilience and Agility 2020 Interim Results Early Stage Q1 Q2 Pre-2020 Mar 2020 Jun 2020 System Disaster Recovery Plan • Executed BCP Governance • Conformed with BCP Framework. Addressed All Key • Adopted a Combination of Top-Down and Bottom- Steps throu
Slide 6: Key Deliverables
Key Deliverables 2020 Interim Results Revenue decreased by 23% to HKD1,798 million YOY while profit attributable to shareholders decreased YOY by 5% to HKD606 million (Up by 136% HOH). Annualized ROE increased by 1.3 p.p. to 9.4% YOY. HSI decreased by -13% The COVID-19 pandemic dealt a serious blow
Slide 7: Financial Review
Financial Review Financials Dividend Revenue Mix Revenue Overview Cost Balance Sheet Liquidity
Slide 8: Financials: 2nd Historical High with Lowered Impairment Charge
Financials：2nd Historical High with Lowered Impairment Charge 2020 Interim Results Income Statement Extract 1H 2020 1H 2019 YoY 1 HoH2 Revenue Achieved 2nd Historical High Fee and Commission income (HKD’000) (HKD’000) - Brokerage 276,450 291,667 -5% 15% HKD Million - Trading Commission excluding 2,3
Slide 9: Dividend: Consistent and Stable Track Record with Interim Payout Ratio Increased
Dividend: Consistent and Stable Track Record with Interim Payout Ratio Increased 2020 Interim Results Interim Dividend Included in FTSE4Good Index In Feb 2020, Guotai Junan International was included in FTSE4Good HKD Million Index by global index provider FTSE Russell, owned by the London Stock Exch
Slide 10: Revenue Mix: Well Balanced and Diversified
Revenue Mix: Well Balanced and Diversified 2020 Interim Results Loans and Financing 29% Fee and Commission 34% Asset Management Market Making Fee income from corporate finance, brokerage, asset management and financial 1% 22% products business, recorded HKD618 million in total. Interest Income 37% R
Slide 11: Revenue breakdown
Revenue breakdown 2020 Interim Results Brokerage SH/SZ Others Securities Commission Income3 Connect 5% (HKD'000) 1H 2020 1H 2019 YOY1 2H 2019 HOH2 7% 230,566 OTC4 - Securities 251,987 -9% 200,544 15% 8% Institutions - Futures and Options 17,684 8,335 112% 8,976 97% Traditional 22% 35% - Handling Inc
Slide 12: Costs and Expenses
Costs and Expenses 2020 Interim Results (HKD ‘000) 1H 2020 1H 2019 YOY1 Finance Costs 39% Staff Costs 329,919 367,551 -10% Other Commission Commission to Account Staff Costs 74,574 62,085 20% Expenses2 Executives 30% Other Commission 2% 16,967 13,822 23% Expenses3 Depreciation 34,038 30,120 13% Impa
Slide 13: Balance Sheet
Balance Sheet 2020 Interim Results Unit: HK$ 000 30 Jun 2020 Contribution* 31 Dec 2019 Contribution* 30 Jun 2019 Contribution* Credit Rating distributions from Fixed Income1 Holdings Loans and advances to customers 14,986,636 11.9% 11,715,902 12.0% 11,929,801 12.1% Receivable from Reverse repurchase
Slide 14: Liquidity Management
Liquidity Management 2020 Interim Results Funding Sources Banking Facilities HKD mm 30 Jun 2020 30 Jun 2019 Change1 Cash 11% MTN Total Banking 33,134 26,217 26% 28% Facilities Total Funding Bank Loans Utilized 17,834 11,201 59% Resources HK$53.8bn Bi Lateral Available Outstanding Syndication 47% 15,
Slide 15: Products and Services
Products and Services Wealth Management Loans and Financing Equity Derivatives DCM ECM Asset Management
Slide 16: Wealth Management: Steady Client Acquisition with Continuous AUM Growth
Wealth Management: Steady Client Acquisition with Continuous AUM Growth Total AUM1 excluding OTC derivatives HKD billion HSI down by 13% AUM adjusted by 1% 161.1 155.7 152.8 151 2018 End 2019 Mid 2019 End 2020 Mid AUM of Wealth Management clients HKD billion 22.2 4.6 2018 End 2020 Mid Notes：1. Total
Slide 17: Wealth Management: Grow with Clients to Grasp the Opportunities in Future
Wealth Management: Grow with Clients to Grasp the Opportunities in Future Bonds and Other Fixed Income Securities Margin Finance and Short Selling In recent years, the Chinese-issued US dollar bond We offer high-net-worth clients financing products market has been booming, and low interest rates
Slide 18: Loans and Financing: Focus on Products and Win with Clients
Loans and Financing:Focus on Products and Win with Clients Lowered Interbank offered rates including HIBOR Multiple Effective Constantly US. Federal Reserve and other central banks lowered the benchmark interest rate to mitigate the Competitive Investment Approval Refined negative impact on the ec
Slide 19: Equity Derivatives: Tailor-made for Clients
Equity Derivatives: Tailor-made for Clients 2020 Interim Results Different Appetites Various Structured Notes Leading Credit Rating as Innovation of Clients Participant Notes (参与型) Long-Tem Issuer Yield Enhancement Trustworthy Team Solutions Total Return Swap (收益互换) Integrity, Diligence, Capital pro
Slide 20: Debt Capital Market: Maintained the Market Share despite Challenges
Debt Capital Market: Maintained the Market Share despite Challenges 2020 Interim Results For primary market, due to the pandemic, Asia (ex-Japan) G3 currency bond issuance amounted to US$168.7 billion in 01 Market Review 1H20, representing a decrease of 8% YOY. For secondary market, with risk-av
Slide 21: Equity Capital Market and IPO Sponsor and Advisory
Equity Capital Market and IPO Sponsor and Advisory 2020 Interim Results Fundraising from Primary and Secondary Equity Market 02 HK$ Billion 39.9 IPO Sponsor & 25 27.2 Advisory 18.2 （July Deal） 01 Completed 2 IPO sponsor deals including ZGC Tec Leasing (1601.HK) and QP （July Deal） Market Review Group
Slide 22: Asset Management: Connecting China with the World
Asset Management：Connecting China with the World 2020 Interim Results Guotai Junan Asia High Income Fund Performance Domestic Stock Market • Stock Connect As at 30 Jun 2020 • QFII Program Domestic Investors • Big four state-owned bank • Regional banks Fixed Income Fund Equity Offshore Bond Fund High
Slide 23: Awards & Prospect
Awards & Prospect Prospect Awards & Honors
Slide 24: Prospect: Unleash the Potential of Guotai Junan Platform
Prospect: Unleash the Potential of “Guotai Junan” Platform 2020 Interim Results 1995 2003 2007 2010 2012 2013 2015 2017 2018 2019 2020 and Going forward Achievements: Prospects： Combines the brand value of “Guotai Junan” of over 25 years in HK, our experience in • More diversified investment produ
Slide 25: Awards & Honors
Awards & Honors 2020 Interim Results Best Asset Management Company Hong Kong 2020 International Business Jul 2020 Best Investment Bank Hong Kong 2020 Magazine Sina Finance Hong Kong Financial Institutions Awards 2020: Jul 2020 Sina Finance The Best IPO Advisors Financial Institution Awards 2020: Jul
Slide 26: Appendix
Appendix Controlling Shareholder Credit Rating Milestone Clients & Service Risk Management
Slide 27: Controlling Shareholder Parent backed by Shanghai SASAC & Shenzhen SASAC
Controlling Shareholder Parent backed by Shanghai SASAC & Shenzhen SASAC 2020 Interim Results Shareholders Structure About Guotai Junan Securities (Parent Company) Shanghai Shenzhen GTJA has been a comprehensive financial service provider with a SASAC1 SASAC1 long-term, sustainable and overall lea
Slide 28: Credit Ratings Leading position among Chinese Financial Institutions in Hong Kong
Credit Ratings Leading position among Chinese Financial Institutions in Hong Kong 2020 Interim Results Milestone of Credit Rating Peers Comparison July 2020 BBB+ BBB+ BBB+ BBB+ S&P reaffirmed Company's investment grade credit ratings BBB+ BBB BBB Feb 2020 Moody's reaffirmed Company's investment grad
Slide 29: Milestone: Seized the opportunities and increased the attributable net assets by 452 times
Milestone: Seized the opportunities and increased the attributable net assets by 452 times Launched Financial Launched 1st fund Launched Investment Banking (FICC) business Launched Warrants and Incorporated in Equity Derivative （Guotai Junan Greater China Growth Fund） CBBC Hong Kong Shanghai-HK stoc
Slide 30: One-Stop Wealth Management Platform
One-Stop Wealth Management Platform More products and coverage 2020 Interim Results Clients Type High Net Worth Institution Corporate Wealth management, HK stocks, Overseas bond financing, US stocks, A-shares and global Market making for Issued trading, financing products, bond Research, Brokerage,
Slide 31: Risk Management System
Risk Management System 2020 Interim Results Credit Risk：We manage credit risk to a borrower or counterparty from different business (traditional lending activities, counterparty exposure, issuer exposure Audit Committee and contingent exposure from third party credit enhancement). We control and Boa
Slide 32: Thanks
IR Contact: Jason Yan Jason.yan@gtjas.com.hk +852 2509 5487 Steven Chen Steven.chen@gtjas.com.hk +852 2509 2604 Helen Feng Thanks Helen.feng@gtjas.com.hk Followus on Wechat: 32
Guotai Junan International Holdings — H1 2020 Earnings Presentation on 6ix