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EQS-News News vom 18.01.2019

CISI Completes Transfer Listing from GEM to Main Board of HKEx Embarking on a New Journey of Overseas Growth

EQS-News / 18/01/2019 / 16:45 UTC+8

With the stroke of the gong at the Hong Kong Exchanges and Clearing Limited (hereinafter referred to as HKEx) on January 3, 2019, China Industrial Securities International Financial Group Limited (hereinafter referred to as "CISI") transfers its listing from the GEM to the Main Board of HKEx, with the stock code changed to 6058.HK. CISI becomes the first financial institution with roots in Fujian Province of China and the fifth Chinese mainland securities brokerage firm's Hong Kong subsidiary listed on the Main Board of HKEx. This is also considered as another milestone in the globalization of Chinese mainland securities companies.

CISI commenced business in Hong Kong in 2012. After reconstruction, it was successfully listed on GEM of the HKEx in 2016, and became the first overseas spun-off and listed subsidiary of a Chinese mainland securities group. Industrial Securities Co., Ltd (hereinafter referred to as "Industrial Securities"), for which CISI acts as the pioneer of its internationalization strategy, is the controlling shareholder of CISI.

Industrial Securities is a leading securities firm in China which originated from the securities business unit of Fujian Industrial Bank. Starting from Fuzhou, the capital of Fujian Province, in the 1990s, Industrial Securities seized the opportunities brought by China's reform and opening up, and has grown from the ground up together with China's capital market. According to the Securities Association of China, in 2017, Industrial Securities Group ranked 14th among 98 Chinese securities companies (according to operating income), and its revenue was approximately RMB 8.8 billion.

Though it took several years for Hong Kong market players to realize the "rise" of securities companies with Chinese mainland background, it had become an inevitable trend for Chinese mainland securities companies to spread their wings and step into other parts of the globe after the 2008 global financial crisis due to the continuous growth of China's economy and private wealth. In the backdrop of this trend, the board of Industrial Securities passed a resolution on the establishment of a Hong Kong subsidiary in December of 2010. CISI was registered in Hong Kong in 2011 and started its business in 2012. In the next 6 years, the company grew stronger and stronger. During 2015-2017, the total value of assets of its brokerage clients under custody jumped from HKD30 billion to HKD130 billion, with multiple-fold year-on-year growth in two consecutive years. In the year of 2017, CISI has recorded an operating income of HKD 928 million, up 82.9% year-on-year.

In the first half of 2018, CISI has recorded an operating income of HKD 560 million, up 56.3% year-on-year. The increase in revenue from brokerage business, investment banking (including bond issuance and underwriting, stock issuance and underwriting, structured product arrangement fees, etc.) and asset management was much higher than that of other business income. The company's effort in improving income structure diversification has achieved initial results.

As at the end of June 2018, the market value of Hong Kong stock of CISI's brokerage clients held in the Hong Kong Securities Clearing Company was HKD 109.4 billion, ranking 4th among 30 Chinese mainland background brokerage firms. For the first half of 2018, Bloomberg data shows that in the terms of total G3 bonds underwritten amount, CISI ranked 6th among the Hong Kong subsidiaries of Chinese mainland brokerage firms, and its total equity securities underwritten amount ranked 7th among these subsidiaries.

Currently, CISI has net assets of over HKD 4.3 billion and more than 180 full-time employees. Its businesses cover global securities and futures brokerage, institutional sales and research, corporate finance, fixed income, asset management and private wealth management.

The performance of CISI has been recognized by the society. Over the years, CISI received a number of awards from authoritative media and institutions in both Hong Kong and Chinese mainland, including "2018 Jun Ding Award for Excellent Hong Kong Wealth Management Institution" and HKEx's "2018 Fastest Growing Futures Brokerage Company in Mainland". In December 2018, CISI won the "2018 Golden Lion Award for Hong Kong Stock Listed Company - the Most Growable Listed Company", with the award ceremony organized by Sina Finance. The winners featuring both strong prospect of growth and unmatchable investment value will become a leading company in its sector.

CISI highly values its relations with shareholders for long-term cooperative development and has been dedicated to bringing the shareholders stable and sustainable returns. On December 27, 2018, the board of directors of CISI approved and adopted a dividend policy that the total amount of dividend will be no less than 40% of the net profit attributable to shareholders during the year. Since its listing, CISI has paid dividends for two consecutive years. In the fiscal year 2016, a dividend of HKD0.02 per share was paid. The aggregate amount accounts for 79.1% of the net profit for the year. In the fiscal year 2017, a dividend of HKD0.03 per share was paid. The aggregate amount accounts for 78.5% of the net profit for the year.

CISI emphasizes its company culture on paying back to the society and has built up close contacts with the local communities in Hong Kong. For example, it worked together with Po Leung Kuk, one of the largest charity organization in Hong Kong, and organized several visits by its employees to the elderly and underprivileged children. As a financial institution, CISI has also been paying more and more attention to green finance while carrying out its business.

The future comes with both "risks" and "opportunities". Whether they are state-owned or privately-owned, industrial enterprises or financial licensees, more and more competitors from the Chinese mainland step into the Hong Kong capital market. The complex and volatile market accompanied by increasingly fierce competition becomes more demanding for the management of Chinese mainland background securities brokerage firms in Hong Kong. With the further in-depth implementation of China's "Belt and Road Initiative" and the "Mutual Market Access Mechanism" in Hong Kong as well as the internationalization of Chinese capital market, the demand for overseas investment and finance among Chinese corporate, institutional and individual clients will keep rising.

In January of 2018, Mr. Yang Huahui, the new "steersman" of Industrial Securities, was appointed as chairman of the board of directors of CISI. Mr. Yang, a Senior Economist with Ph.D in Economics, has engaged in securities, banking and trust for 26 years and is very much experienced in management of Chinese integrated financial businesses.

Speaking on CISI's successful transfer of listing from GEM to the Main Board, Mr. Yang said that as the overseas headquarter and comprehensive international platform for various businesses of Industrial Securities, CISI will look into overseas markets with firm roots in Hong Kong, and be dedicated to developing into a first-class Chinese securities and financial group in overseas market with international competitiveness. In the meantime, one of the core competences of a first-class securities and financial group is top-level risk management ability. CISI will emphasize more on compliance requirements on business operation and risk prevention and control, which will provide a solid foundation for its business development in the future.

In the future, CISI stated in its financial reports that it will continue to consolidate and promote its securities and futures brokerage business, and accelerate the development of the institutional sales and research business, which will also drive the corporate finance and assets management business.

Leveraging the opportunities in the globalization trend of Chinese mainland brokerage firms in Hong Kong, CISI has not yet fully released its potential.

Document title: CISI Completes Transfer Listing from GEM to Main Board of HKEx Embarking on a New Journey of Overseas Growth

18/01/2019 Dissemination of a Marketing Press Release, transmitted by EQS Group.
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