Stock Connect fuels Haitong profit by 92%
Updated: 2015-03-12 07:56
By Sophie He in Hong Kong(HK Edition)
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Haitong International Securities Group Ltd saw its 2014 net profit jump by 92 percent from a year ago as a result of the company being the biggest beneficiary of the Shanghai-Hong Kong Stock Connect program.
The company's exchange traded funds (ETF), derivatives and renminbi (RMB) denominated financial product businesses recorded significant growth last year, Lin Yong, Haitong's deputy chairman and chief executive said on Wednesday.
Lin said the stocks cross-trading link has fundamentally changed the degree of opening of the mainland's capital market. Through the program, mainland investors, especially retail investors, are able to invest abroad conveniently while overseas investors are also able to invest on the mainland through Hong Kong.
Benefiting directly from the favorable Stock Connect initiative given its status as an "RMB investment and financing expert", Haitong has made preparation well in advance and has seen marked growth in its asset management scale, doubling turnover from the equities and derivatives markets and raising trading commissions from retail customers. The development of all business segments has translated into new earnings records for the group, the company said.
"From the public information we got from the Hong Kong Stock Exchange, in 2014, Haitong was the biggest beneficiary of the Connect," said Lin.
For the year ended Dec 31, 2014, the brokerage recorded revenues of HK$2.71 billion, representing a year-on-year increase of 65 percent. Net profit for the year was HK$1.02 billion, or 56.17 Hong Kong cents per share - up by 92 percent from a year ago.
A final dividend of 15.5 Hong Kong cents per share has been recommended.
Wilson Hui Yee, Haitong International's executive director, said that in 2014, the trading volume under the Connect recorded by the company was five times that of its trading volume of H shares.
He projected that, for the first half of this year, Haitong's revenue from brokerage and margin financing may be boosted by 50 to 100 percent as a result of the Shanghai-Hong Kong stocks cross-trading link. Last year, this segment recorded revenues of HK$1.18 billion.
"Our revenues may grow even faster with the impending launch of the Shenzhen-Hong Kong Stock Connect this year," Hui added.
Deeply rooted on the mainland, the group is committed to its strategic foray into the international market. To this end, Haitong will make every effort to exploit its advantageous position of being a mainland securities firm in Hong Kong.
With its sound customer base, strong product innovation capability, a reputable brand and its ever-growing sales network both at home and abroad, the group will ride fully the trend of RMB internationalization and financial innovation and promote its capital deployment capability further, the company said.
"The next decade will be decade of RMB internationalization. So far, Haitong International has seized every opportunity to develop and expand its RMB business, especially in overseas markets," Lin said, adding that he's confident the company is very well positioned for the mainland's "One Belt, One Road" development strategy and the rapid internationalization of the RMB.
Haitong International's share price slid 0.2 percent at the close on Wednesday.
sophiehe@chinadailyhk.com
(HK Edition 03/12/2015 page8)