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Shenwan Hongyuan Announces 2019 Annual Results

HONG KONG, Mar 28, 2020 - (JCN Newswire) - Shenwan Hongyuan Group Co., Ltd. (hereinafter referred to as "Shenwan Hongyuan" or the "Company"; stock code: 6806.HK; 000166.SZ) announced its annual results for the 12 months ended 31 December 2019 (the "Reporting Period").

During the Reporting Period, the Company achieved total revenue and other income of RMB33.252 billion, up 37.92% YOY; profit before income tax of RMB6.927 billion, increasing 33.54% YOY; profit attributable to the shareholders of the Company for the period of RMB5.735 billion, a YOY increase of 37.86%; basic earnings per share of RMB 0.24, 26.32% higher than in 2018; 7.41% in its weighted average return on net assets ratio, rising by 1.22 percentage points YOY.

Benefiting from a market rebound and accurate strategy transformation, the Company's four major business segments including enterprise finance, personal finance, institutional services and trading, and investment management all recorded steady growth and further increased market shares. Among them, revenue from the Company's enterprise finance segment increased 25.47% YOY to RMB2.718 billion; personal finance grew 1.86% to RMB11.345 billion; institutional services and trading surged by 93.66% to RMB17.166 billion; and investment management rose by 4.18% to RMB2.023 billion.

Enterprise finance business: Seize market opportunities, participate in the STAR Market, and steadily expand the scope of business

In 2019, the Company's investment banking arm fully participated in the construction of the STAR Market, developed a full range of fixed income financing businesses and continued to increased efforts in the development of new projects to increase project reserves. During the Reporting Period, the Company completed 13 equity financing projects (including 3 IPOs and 10 refinancing projects) with a financing amount of RMB13.879 billion. In particular, "Anji Technology", was responsible for sponsoring and undertaking, was one of the first batch of enterprises listed in the STAR Market; six M&A and restructuring transactions were approved by the M&A and restructuring committee of the CSRC, ranking fifth in the industry, up by 13 in ranking as compared with the last year; 79 enterprise and corporate bond projects, and 493 local government bond projects with an underwriting amount of RMB87 billion, the Company was rated as an outstanding lead underwriter of corporate bonds by the Shenzhen Stock Exchange.

Personal finance business: Actively capture market opportunities, introduce the assets of major clients, and promote institutional transformation for clients

In 2019, the overall capital market rebounded and saw vigorous trading. As of the end of the Reporting Period, client securities under the custody of the Company amounted to RMB3.20 trillion, representing a year-on-year increase of 33.67% and a market share of 7.18%, ranking among the top in the industry. At the end of the period, the brokerage business had nearly 7.271 million retail customers, representing an increase of 11.04% as compared with the end of the previous year. The new securities accounts opened by companies reached approximately 710,800, representing an increase of 118.71% over the same period of last year. The monthly active users of Big Winner APP reaching 1,121,100.

The Company's future business line, daily average customer equity and total customer equity peaked at record highs. Shenwan Futures had been awarded the highest Class A Grade AA rating in the classified evaluation of futures companies by the CSRC for six consecutive years, and it had also been granted approximately 40 awards and honours by the financial industry, government authorities, exchanges, mainstream media, etc.; Hongyuan Futures further strengthened its business layout, further developed its new business, and applied for qualifications for fund sales business. Breakthroughs to varying degrees were achieved in terms of basis trading business, market making business, and options business.

During the Reporting Period, by fully leveraging on the position as one of the first batch of qualified brokers for securities refinancing business in the STAR Market, the Company accelerated institutional transformation of clients through capturing market trends and expanding the source of securities, with RMB51.71 billion in ending balance and a market share rate of 5.05% at the end of 2019.

The Company's stock-backed lending business actively responded to change in the market environment, and further strengthened its project risk management. As of the end of the Reporting Period, the Company's stock-backed lending business has had a balance of RMB24.488 billion, decreasing by 43.94% over the end of the previous year. The collateral coverage ratio of stock-backed lending contracts was 243.63% on average.

The sales of financial product business line of the Company devoted great efforts to both the mutual funds and private equity funds. During the Reporting Period, the Company's total sales of its own financial products and third-party products reached RMB63.899 billion and RMB46.594 billion respectively.

Institutional services and trading business: Strengthen research input and the building of sales and service capabilities, as well as continuously enriching product portfolio

During the Reporting Period, the Company's institutional services and trading business recorded total revenue and other income of RMB17.166 billion, representing a year-on-year increase of 93.66%. Among them, revenue generated from units leasing amounted to RMB422 million, representing an increase of 3.97% over the end of the previous year,, and the market share of income from units leasing was 4.2034%, maintaining in the top rank in the industry; as for the PB System business, the Company standardised the development of PB trading system to achieve full-market and full-variety coverage. As of the end of 2019, there were 487 PB System customers with a total scale of RMB114.1 billion; the fund operation outsourcing service of the Company had passed the ISAE3402 international certification for two consecutive years; the Company obtained the qualification for custody of securities investment funds.

The Company's research and consultation business line continuously improved in research quality and market influence. In 2019, SWS Research held more than 40 quality conferences and won the first place of "Local Gold Medal Research Team", 23 individual research awards in the "13th Crystal Ball Awards For Chinese Sell-Side Analysts", the 4th place of the "The Most Influential Research Institutions", and individual awards in 10 research fields in the "17th Best Analyst".

The Company's FICC business line closely followed the development of the market, with the investment return far exceeding the average return of the open bond fund, and profit contribution once again reaching a record high; with its gradually improving business layout, the Company acquired the qualifications for treasury bonds futures market-making business and main market maker for listed funds, as well as qualifications to quote in the "Bond Connect".

The Company continued to promote its equity sales and trading business, resulting in steady increase in its overall profitability. Furthermore, the Company vigorously developed market-making business and obtained a number of important business qualifications including the main market maker of the Shanghai and Shenzhen 300ETF options from the Shanghai Stock Exchange, the main market maker of the Shanghai and Shenzhen 300ETF options from the Shenzhen Stock Exchange, the market maker of stock index options of the Shanghai and Shenzhen 300 index from China Financial Futures Exchange and the market maker of commodity options (PTA, methanol) from Zhengzhou Commodity Exchange. The Company continuously enriched the product lines of its derivatives business and strengthen its customer stickiness. According to the Securities Association of China, during the Reporting Period, the Company's market share of OTC derivatives business stood at 12.3%, ranking among the top five in the industry in respect of cumulative scale.

Investment management business: Combine internal and external resources to provide diverse asset allocation plans

The investment management business of the Company consists of asset management, mutual fund management and private equity fund management. During the Reporting Period, the Company's investment management business segment recorded total revenue and other income of RMB2.023 billion, representing a year-on-year increase of 4.18%. Net income from the Company's asset management business showed relatively rapid growth in spite of adversity, ranked 5th in the industry, climbing one place from previous year; income structure was further optimised, with revenue from the active management business constituting 86% of total revenue, up 11 percentage points YOY.

The Company carries out the mutual fund management business principally through its controlled subsidiary SWS MU and its invested company Fullgoal Fund. As of the end of the Reporting Period, the scale of assets under its management was RMB76.2 billion, representing an increase of 46% from the end of the previous year. The scale of mutual funds under Fullgoal Fund's management was RMB339.059 billion, representing an increase of over 70% over the end of the last year. The Company maintained excellent overall investment performance in various major categories of products such as active equity, quantitative index and fixed income.

The Company carries out the private equity fund management business principally through Shenwan Hongyuan Industrial Investment, Hongyuan Huifu and Shenyin & Wanguo Investment. Relying on the capital market, the Company vigorously developed the private equity fund business and strengthened cooperation with key provinces and relevant listed groups, large state-owned enterprises, etc., to comprehensively serve the development of the real economy and industrial transformation and upgrades.

Outlook: Implement the "principal investment + investment banking" strategy to ensure the Company's healthy and continuous development

As the multi-layered capital system gradually improves and various measures to open the financial industry are continuously launched, the securities sector faces new development opportunities from increasing industry consolidation. Shenwan Hongyuan will follow the trend and has set a strategic goal to "become a financial service provider which relies on the capital market, focuses on securities businesses, and is featured by "principal investment + investment banking", serving the general public, supporting solid economic development and optimising resources allocation. In respect of the tasks for fully implementing the strategy of "principal investment + investment banking", the Company will expedite its resource layouts, continuously improve its competitiveness and profitability, enhance its team and capability building, and perfect its internal control and risk management system, so as to ensure the Company's continuous, healthy development. Meanwhile, the Company will also actively respond to the negative impact of the novel coronavirus epidemic on its various businesses, adhere to "strong efforts on both aspects" of epidemic prevention and operation, and join hands with the Chinese to win this people's war, general war and blockade against the pandemic in a determined way.

About Shenwan Hongyuan Group Co., Ltd.
Shenwan Hongyuan Group Co., Ltd. is a leading investment holding group focused on securities businesses in China. Shenwan Hongyuan Group is committed to providing diverse financial products and services to clients. In January 2015, Shenwan Hongyuan Group 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 according to Dealogic, forming the corporate structure by "an investment parent company, Shenwan Hongyuan Group, and a subsidiary securities firm, Shenwan Hongyuan Securities", and it listed on the Shenzhen Stock Exchange. In April 2019, Shenwan Hongyuan Group issued H shares and was successfully listed on the Hong Kong Stock Exchange.





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