Guotai Junan International Holdings Limited
Guotai Junan International Announces 2019 Interim Results Interim Revenue Recorded Historic High Dividend increased by 27% YOY

[To: Business Editor] [For Immediate Release]
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Guotai Junan International Announces 2019 Interim Results
Interim Revenue Recorded Historic High
Dividend increased by 27% YOY

[20 August 2019, Hong Kong] Guotai Junan International Holdings Limited (“Guotai Junan International“, “the Group” or “the Company“, Stock code: 1788.HK) today announced its interim results for the six months ended 30 June 2019 (the “Period“). During the period, benefiting from the Group’s favorable performances of its debt and equity capital market (“DCM” and “ECM“), brokerage and other businesses, the Group recorded a total revenue of HKD2,360 million approximately, representing an increase of 41% as compared with the same period of last year. The profit attributable to shareholders amounted to HKD640 million, representing a YOY growth of approximately 26% as compared with first half of 2018 and a HOH surge of 120% as compared with second half of 2018. The annualized return on equity (ROE) of the Group rose by 4 percentage points to 12% year-over-year. The Board has declared an interim dividend of HKD0.042 per ordinary share, up by 27% YOY, with the same payout ratio as last year of 50%.

* Compared with the second half of 2018

Revenue structure: balanced and diversified
Benefiting from the strategic adjustment in recent years, the Group’s revenue structure has become more balanced and diversified during 1H2019. Among all, the fee and commission income, interest income and investment income accounted for 34%, 33% and 33% of the total revenue, respectively. During the period, with a steady growth in corporate finance and brokerage business, the Group recorded a fee and commission based income of HKD790 million, up by 18% YOY, which is in line with the Group’s sustainable development strategy as a financial service provider.

Wealth management platform approached perfection as the brokerage business rose against market trend
Although the average daily turnover of Hong Kong stock market fell by 23% HOH during the Period, the Group’s brokerage business grew by 7.5% YOY to approximately HKD292 million, against the market trend. During the period, the Group optimized the construction of the wealth management platform constantly by expanding and improving its team size and services and product lines, which brought to the Group a large number of high-net-worth clients and high-quality assets. In the first half of 2019, the Group recorded a total amount of client assets under custody HKD235 billion, up by approximately 40% from the end of 2018. As the number of professional investor clients increased steadily, its average account balance grew by 61% to HKD52.01 million from the end of last year.

DCM business maintained leadership in market
During the Period, the Group continued to maintain its leadership in the Hong Kong debt capital market, recording a historic high with its revenue in this segment increasing by 26% YOY to HKD320 million. The Group’s debt securities underwriting team has participated in a total of 106 debt issuance activities throughout the first half of year (1H 2018: 76), successfully assisting corporations to raise fund of nearly HK$244.8 billion in the bond market, up by 48% YOY. According to Bloomberg, the Group ranked second and third in the Asia (ex-Japan) G3 Currency Corporate High-Yield Bond Underwritten League, in terms of number and amount underwritten respectively. Meanwhile, given that the US dollar-denominated bonds issued by the Chinese corporates have been witnessing a continuously rally, the Group’s revenue from market making business increased to approximately HKD500 million (1H 2018: loss of approximately HKD47 million).

ECM business grew significantly amid market downturn
During 1H 2019, the Hong Kong stock market witnessed a decline of 25% in fundraising amount, despite which the Group’s ECM along with consultancy and advisory business recorded significant growth in revenue, up by 66% YOY to HKD130 million. During the Period, the Group completed 15 equity underwriting projects (5 of which were IPO sponsorship projects), representing a growth of 50% YOY and introducing quality projects to the capital market of Hong Kong, such as China Risun (1907.hk), Aoyuan Healthy (3662.hk) and Zengame (2660.hk),etc.

Looking forward, the Group will proactively seize the opportunities arising with China’s economic growth and the further opening of the market, by developing its wealth management platform with full efforts and boosting the synergy between different business units, thus leveraging core competencies and providing full-range and one-stop services and products for investment and financing to its clients under a comprehensive and prudential risk management system. The Group will adhere to its core objective to increase risk adjusted return on capital and reward the clients and investors for their long-term support with a steady, sustained and high compound growth.

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About Guotai Junan International Holdings Limited

Guotai Junan International is the market leader and first mover for internationalization of Chinese Securities Company. The Company is the first Chinese securities broker to list on the Main Board of The Hong Kong Stock Exchange by way of initial public offering. Based in Hong Kong, the Company provides diversified integrated financial services. The core services include: wealth management, brokerage, corporate finance, loans and financing, asset management and financial products.

The Company is one of the constituents of HSCI, Hang Seng Composite LargeCap & MidCap Index, FTSE HK index and FTSE HK ex H share index. Guotai Junan International has been assigned “Baa2 / Prime-2” and “BBB+ / A-2” rating from Moody and Standard & Poor respectively.

The controlling shareholder, Guotai Junan Securities Company Limited (Stock Code: 601211.SS; 2611.HK), is the comprehensive financial provider with a long-term, sustainable and overall leading position in the Chinese securities industry. Backed by strong operational support, the Company will be able to further explore the HK and the Asia-Pacific market, aiming to become an important financial institution with market influence in the region.

For more information about Guotai Junan International: http://www.gtjai.com.