EQS-News: GF Securities Announced 2021 Annual Results

廣發証券股份有限公司

GF Securities Co., Ltd.

(HKSE:1776; SZSE:000776)

GF Securities Announced 2021 Annual Results

(30 March 2022, Hong Kong) GF Securities Co., Ltd. ("GF Securities" or the "Company", together with its subsidiaries, the "Group"; HKSE: 1776; SZSE: 000776), one of the most influential securities companies in China, announced its annual results for the twelve months ended 31 December 2021 (the "Reporting Period"). The year 2021 is the 30th anniversary since the inception of the Company. Acting upon the operating objective of "reform proactively with a focus on building core competitiveness and promoting high-quality enterprise development", the Company insisted on "customer-centric" to promote the transformation of operation model, optimize business structure, improve development quality, optimize platform construction, and enhance comprehensive service capabilities. In the fiercely competitive market environment, the Company has continued to maintain a positive momentum of development and remained at the forefront of the industry in terms of operating performance, with the total revenue and other income amounting to RMB41.915 billion, representing a year-on-year increase of 16.48%, and the net profit attributable to owners of the Company reaching RMB10.854 billion, representing a year-on-year increase of 8.13%.

Strengthening technological finance and multi-channel construction and operation to firmly promote the transformation of wealth management

In 2021, as the Company strengthened technological finance and multi-channel construction and operation, the number of new customers and asset scale increased significantly. The Company firmly promoted the transformation of wealth management, and the agency sales of financial products maintained rapid development. It also accelerated the promotion of the platformization and ecologicalization of institutional customer service to build a unified service portal for institutional customers. In addition, the Company continued to promote comprehensive operation and collaborative services with its comprehensive service system and professional capabilities. As the scale of enterprise WeChat customers continued to grow and the private domain traffic operation and service business developed in a compliant and efficient manner, the platform effect at company level has started to appear. Since solid compliance risk control and management supported business transformation and development, the Company's competitiveness was further enhanced.

With industry-leading wealth management capability, the Company provided wealth management services to nearly 15 million customers through 309 branches and business departments and more than 4,000 securities investment consultants in China. In 2021, the trading volume of stocks and funds of the Company was RMB21.31 trillion (bilateral statistics), representing a year-on-year increase of 22.92%. The balance maintained by the agency sales of financial products of the Company recorded a year-on-year increase of 17.32% and ranked third amongst the securities dealers in terms of the balance of public fund maintained in the agency sales of non-monetary market (Source: Asset Management Association of China (中國基金業協會), 2022). As of the end of 2021, the number of the Company's mobile-phone securities users exceeded 37.40 million, representing an increase of approximately 16% as compared to the end of last year; during the Reporting Period, the sales and transfer amount of financial products of the Yitaojin E-commerce platform amounted to RMB327.1 billion.

In regions outside of the PRC, GF Securities (Hong Kong) provided brokerage services for high-net-worth individuals and retail customers, covering financial products such as stocks and bonds listed on the Hong Kong Stock Exchange and overseas exchanges, using self-developed Yitaojin (易淘金) international version of trading system to focus on development of overseas wealth management business. In 2021, the transformation from brokerage business to wealth management achieved remarkable results with increasing number of high-net-worth customers, scientific and technological financial capability was enhanced, and the operating income, number of accounts opened, product sales and number of customers covered by the product achieved significant year-on-year growth.

Achieving an outstanding performance in trading and institution business, with excellent research capability to empower the development of the entire business chain

The outstanding research capability of GF Securities enjoys a high reputation in the industry, and its equity research covers nearly 800 A shares listed companies across 28 industries in the PRC and over 160 companies listed in Hong Kong and overseas. The research department of GF Securities received numerous honors including 1st in the "New Fortune Domestic Best Research Teams (本土最佳研究團隊)" for consecutive years from 2017 to 2021 and "Top 5 Golden Bull Research Team (五大金牛研究團隊)" award by "China Securities Industry Analyst Golden Bull Award (中國證券業分析師金牛獎)" for consecutive years. Meanwhile, it ranked in the forefront in the selection of "Sell-side Analyst Crystal Ball Award (賣方分析師水晶球獎)", "Best Analyst of Shanghai Securities News", "Golden Kirin (金麒麟)" Best Analyst of Sina, and "Golden Analyst of the 21st Century". In addition, in order to further promote the research-driven business model, strengthen the promotion and support of research to the Company's core business and professional exchanges at home and abroad, the Company has established a first-level departmental industry research institute to empower the Company to develop the whole business chain.

In respect of trading and institution business segment, the average daily scale of the Company's market-making business increased substantially as compared to 2020, and the Company maintained the market liquidity, reduced the severe market volatility, improved the pricing efficiency and satisfied the investment needs of public investors by providing market maker services. The Company has won the 2021 Outstanding Option Market Maker Award from the SSE, and ranked No. 10 among securities firms in terms of the trading volume of bonds in China (Source: www.chinabond.com.cn, 2022). As of December 31, 2021, the Company has issued 26,368 OTC products in aggregate with an aggregate amount of approximately RMB1,026.451 billion. The market value of the products as at the end of the Reporting Period was approximately RMB92.981 billion. Specifically, the Company issued 7,360 new OTC products with an aggregate amount of RMB181.97 billion in 2021. As of the end of December 2021, the Company provided market-making services for 67 companies listed on the NEEQ. In respect of asset custody business, during the Reporting Period, the Company actively expanded the market, strengthened infrastructure construction, improved comprehensive service capabilities and enhanced risk control system to consistently improve customer satisfaction. As of the end of December 2021, the total asset scale of asset custody and fund service business provided by the Company was RMB525.972 billion, representing a YoY increase of 60.93%, of which the scale of trust products was RMB262.466 billion, and the scale of fund service products provided was RMB263.506 billion.

GF Qianhe, a wholly-owned subsidiary of the Group, actively carried out alternative investment business with its own funds, mainly focusing on equity investment business currently. In 2021, GF Qianhe focused on advanced manufacturing, semiconductors, healthcare, new consumption, TMT and other major ­elds. During the Reporting Period, GF Qianhe completed 89 new investment projects with a total investment of RMB4.078 billion (including direct investment projects undertaken due to standardization and rectifi­cation). As of the end of 2021, GF Qianhe has completed 231 investment projects.

Staying at the forefront of the industry with the total asset under management maintaining rapid growth

The Company possesses licenses for a full range of services including investment banking, wealth management, transaction and institution and investment management, forming the financial platform of a securities group with securities business as the core and businesses that cover domestic and global markets. The Company has an industry-leading comprehensive financial services capability, with main operating indicators ranking among top ten securities firms in China for 28 consecutive years. In 2021, by leveraging the advantages of the financial group structure, the Company made progress in all three areas, namely asset management business, public fund management business and private fund management business.

As of the end of 2021, the net value of asset management scale of GF Asset Management, a wholly-owned subsidiary of the Group, amounted to RMB4.932 billion, rising by 62.26% as compared with the end of 2020. As of the end of December 2021, the scale of regulatory entrusted fund of GF Asset Management ranked sixth (Source: the Securities Association of China, 2022). In the fourth quarter of 2021, the average monthly scale of private active asset management of GF Asset Management ranked third (Source: Asset Management Association of China, 2022).

In respect of public fund, as of the end of 2021, the public funds managed by GF Fund in aggregate reached RMB1,129.625 billion, representing an increase of 47.97% as compared to the end of 2020, and the total fund size excluding money market funds amounted to RMB691.952 billion, ranking third in the industry (Source: Statistics of the Company, WIND, 2022). As of the end of 2021, the public funds managed by E Fund in aggregate reached RMB1,706.429 billion, representing an increase of 39.28% as compared to the end of 2020, and the total public fund size excluding money market funds was RMB1,228.904 billion, ranking first in the industry (Source: Statistics of the Company, WIND, 2022).

In respect of private fund, in 2021, GF Xinde focused on such industries as biomedicine, intelligent manufacturing and corporate services. As of the end of 2021, GF Xinde set up and managed over 50 private funds, the total size of customers' assets under management was nearly RMB15 billion. In the overseas market, the Group is engaged in overseas private equity fund business mainly through its indirectly wholly-owned subsidiary GF Investments (Hong Kong) and institutions thereunder, and has completed investment mainly in fields of high-end manufacturing, TMT and biomedical. Several investment projects have exited by way of mergers and acquisitions or been listed on the stock exchanges in Hong Kong, the United States and other regions.

Continuing to promote the transformation of investment banking business to provide customers with high-quality comprehensive financial services

During the Reporting Period, the Company continued to promote the transformation of investment banking business, continuously strengthened compliance and risk control management and optimized the operation mechanism of investment banking business. It also gave full play to the advantages of the Group's platform, adhered to customer-centric operation and strengthened customer cultivation and expansion to consolidate business development. Meanwhile, the Company has carried out debt financing business in an orderly manner, actively seized market opportunities and increased investment in bond underwriting business to provide customers with comprehensive financial services. It has also intensified efforts to develop customers in key regions, and continued to strengthen due diligence, risk management and quality control to build a solid bottom line for risk prevention and control.

In 2021, the Company completed 4 equity financing projects for which the Company acted as a lead underwriter, and the lead underwritten amount was RMB1.425 billion. The Company also acted as the lead underwriter for 40 bonds, with a lead underwritten amount of RMB30.995 billion. As of the end of December 2021, the Company sponsored a total of 33 companies listed on the NEEQ as the lead brokerage (Source: NEEQ, Statistics of the Company, 2022). In addition, in respect of the overseas investment banking business, GF Capital (Hong Kong) completed 32 projects in which it acted as lead underwriter (including IPO, refinancing and bond offering) and financial adviser.

Looking forward, GF Securities will continue to focus on principal duties and businesses, and establish the operation model of "research + N" in order to optimise and reinforce its principal businesses with its persistence in adhering to the path of professional development; scientifically construct its business structure, refine and optimise its advantageous businesses, strengthen its business developments in fields including capital agency and wealth management, in order to form a more reasonable, stable and sustainable income structure; and continue to improve its ability to make changes to deepen its financial technology strategy, improve its assessment and incentive mechanism, and strengthen its comprehensive risk management ability, in order to ensure the stable and long-term development of the Company. With its continuous efforts in improving the "soft power" of corporate culture and the "hard power" of businesses, GF Securities will focus on perfecting its internal operations, continuously creating its core competitiveness at every new development stage for advancing its own high-quality development, proactively serving the real economy, and meeting with its customers' needs. The Company will also endeavour to build a top-notch investment banking and wealth management institution to create returns for extensive shareholders with a more superior operation performance.

About GF Securities Co. Ltd

Established in 1991, GF Securities Co., Ltd. is one of the first, full-service securities firms in China. The Company was successfully listed on the main boards of the Shenzhen Stock Exchange (Stock code: 000776.SZ), and the Hong Kong Stock Exchange (Stock code: 1776.HK), in 2010 and 2015, respectively. With excellent business performance, continual optimised risk management and quality services, the Company has successfully achieved sustainable and steady development, and has become one of the most influential securities companies in China for years. As of December 31, 2021, the Company operated 309 branches and business departments , covering 31 provinces, cities, and autonomous regions throughout China. Its capital strength and profitability remain at the leading position in the securities industry of the PRC, and its total market capitalisation is at the top among all listed securities companies in China. GF Securities has been at the forefront of "Hurun's Top Brands List" amongst listed Chinese securities companies for six consecutive years from 2015 to 2020. The Company actively fulfils its social responsibilities through "GF Securities Social Charity Foundation", with its focus on poverty relief and provision of financial support for education, and practises social responsibilities on a voluntary basis, thus leading to the continuous increase in its reputation and brand influence.