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2015 CITICS Annual Results Presentation
March 24th, 2016
Table of Contents:
1. Overview of Chinese Capital Market
2. Company Financial Review 2015
3. Company Business Review 2015
4. Company Business Outlook 2016
1. Overview of Chinese Capital Market
Overview of Chinese Capital Market in 2015
China’s Capital Market Indices
Capital Raised in the Equity Market
Average Daily Turnover in the Equity Market 1
3
4
2
Capital Raised in the Bond Market 4
921.5
1,654.9
0
500
1,000
1,500
2,000
2014 2015
+80% y-o-y
6.8
12.5
0
5
10
15
2014 2015
+83% y-o-y
Bond Index
China Bond Wealth Index +8% 0
500
1,000
1,500
2,000
1月
2月
3月
4月
5月
6月
7月
8月
9月
10月
11月
12月
1月
2月
3月
4月
5月
6月
7月
8月
9月
10月
11月
12月
RMB Bn
RMB Bn RMB Tn
Indices 1H15 3Q15 4Q15 2015 FY
Shanghai
Composite Index32% -29% 16% 9%
GEM Index 94% -27% 30% 84%
Source:Wind, internal data provided by CITICS ECM and DCM
309.8bn - 2014 average
1076.5bn - 2015 average
Overview of Chinese Capital Market in 2015
AUM of Securities Industry
Stock Repo Balance
Margin Financing & Securities Lending Balance 1
4
5
2
Pledge Repo Balance(incl. asset management) 3
7,970.0
11,852.5
0
5,000
10,000
15,000
2014 End 2015 End
+49% y-o-y
337.5
708.7
0
200
400
600
800
2014 End 2015 End
+110% y-o-y
10.8
5.2
0
5
10
15
2014 End 2015 End
-52% y-o-y
1,025.7 1,177.5
0
500
1,000
1,500
2014 End 2015 End
+15% y-o-y
RMB Bn RMB Bn
RMB Bn RMB Bn
Source:Wind
Assets Overview: Client assets reflected market volatility
Source: SAC Note: “ Leverage-adjusted ” refers to total liabilities excluding client assets. “Leverage-total” refers to total liabilities including client assets. 6
Total Assets Total Liabilities 1 2
1.1 1.6 2.9
4.9 4.4 0.6 0.5 1.2
3.4 2.1
0
2
4
6
8
10
2012 End 2013 End 2014 End 2015 Jun End 2015 End
Own assets Client assets
0.6 1.0 2.0 3.6 2.9 0.6
0.5 1.2
3.4
2.1
0
2
4
6
8
10
2012 End 2013 End 2014 End 2015 Jun End 2015 End
Own liabilities Client assets
4.1
8.3 7.0
1.2
6.5 5.0
2.1 1.7 3.2 1.5
Net Assets 3 Leverage Ratio 4
0.5 0.5 0.9
1.3 1.5
0
1
2
2012 End 2013 End 2014 End 2015 Jun End 2015 End
1.6 2.1
3.2 3.7 3.0
2.5 2.8 4.4 6.4
4.4
0
5
10
2012 End 2013 End 2014 End 2015 JunEnd
2015 End
Leverage-adjusted Leverage-total
RMB Tn RMB Tn
RMB Tn Multiples
Note
Profitability Overview: Revenue and net profit both historical high
Total Revenue
ROE
Net Profit 1
3
7
2
Net Profit Margin 4
283.6
129.5 159.2 260.1
575.2
0100200300400500600
2007 2012 2013 2014 2015
132.7
32.9 44.0 96.5
244.8
0
100
200
300
2007 2012 2013 2014 2015
60.0%
4.9% 6.1% 11.8% 19.9%
0%
20%
40%
60%
80%
2007 2012 2013 2014 2015
47%
25% 28% 37% 43%
0%
20%
40%
60%
80%
100%
2007 2012 2013 2014 2015
RMB Bn RMB Bn
Source: SAC
+121% y-o-y +154% y-o-y
2. Company Financial Review 2015
Key Financial Performance – Total Revenue
Total Revenue
9
According to A-share
report, our revenue in 2015
was RMB 56bn, a 92% y-o-
y increase.
1
20.3
39.5
72.9
16.1
29.2
56.0
0
10
20
30
40
50
60
70
80
2013 2014 2015
H-share reporting A-share reporting
+92% y-o-y
RMB Bn
Source: Company annual report
10
Key Financial Performance – Expense Analysis
Operating Expenses to Revenue Ratio 1
Compensation Expenses to Revenue Ratio 2
According to A-share report,
our operating expenses to
revenue ratio was 36%, a
11% y-o-y drop.
According to A-share report,
our compensation expenses
to revenue ratio was 26%, a
6% y-o-y drop.
67% 63% 64% 50% 47%
36%
0%
50%
100%
2013 2014 2015
H-share reporting A-share reporting
25% 24% 20% 32% 32% 26%
0%
50%
100%
2013 2014 2015
H-share reporting A-share reporting
Source: Company annual report
Key Financial Performance – Net profit attributable to the parent
Net Profit Attributable to the Parent
11
Our net profit to the parent
in 2015 was RMB 19.8bn, a
75% y-o-y increase.
1
5.2
11.3
19.8
0
10
20
30
2013 2014 2015
+75% y-o-y
RMB Bn
Source: Company annual report
34.8 44.3
89.4
0
20
40
60
80
100
2013 End 2014 End 2015 End
87.7 99.1
139.1
0
40
80
120
160
2013 End 2014 End 2015 End
12
Net Assets
Net Capital (Parent Company )
Key Financial Performance – Capital Strength
Our net assets was RMB
139.1bn as of 2015 end,
increasing by 40bn compared
with 2014 end, mainly
attributable to 21.1bn H-share
follow-on and net profit of
19.8bn.
Our net capital of parent
company was RMB 89.4bn,
doubled from 2014 end, mainly
due to H-share follow-on and net
profit.
+40%
+102%
1
2
RMB Bn
RMB Bn
Source: Company annual report
Key Financial Performance — Leverage and ROE
13
Leverage Ratio
ROE
Flow-based businesses fully
took the measurable risk into
consideration. Our leverage was
3.3x as of 2015 end, a modest
level.
Our profitability ratio improved
and ROE increased to 16.6%.
3.0
4.7 4.3
2.5
3.7 3.3
0
1
2
3
4
5
2013 End 2014 End 2015 End
Leverage-total Leverage-adjusted
6.0%
12.2% 16.6%
0%
5%
10%
15%
2013 2014 2015
1
2
Multiples
Source: Company Annual Report Note: “ Leverage-adjusted ” refers to total liabilities excluding client assets. “Leverage-total” refers to total liabilities including client assets.
Note
3. Company Business Review 2015
15
Company Business Review 2015
3
1 Businesses maintained the leading position in the industry
2 More balanced revenue mix
Financing capabilities substantially strengthened
Progress of our international expansion 4
5 Robust risk management mechanism withstood market turmoil
495.9
921.5
1,654.9
0
500
1,000
1,500
2,000
2013 2014 2015
China-related M&A Deals
1. Investment banking:Underwriting market share maintained the leading position
Ranked No.1 in Equity Underwriting Ranked No.1 in Bond Underwriting
Rank Underwriter Market share
1 CITICS 10.7%
2 Guotai Junan 8.5%
3 Haitong 8.4%
4 Huatai 7.3%
5 China Sec. 5.3%
Market Equity Underwriting
Amount
Market Bond Underwriting
Amount
Market Overview 1 2 3
5
16
RMB Bn
Rank Underwriter Market share
1 CITICS 3.4%
2 China Sec. 3.0%
3 Guotai Junan 1.8%
4 CMS 1.7%
5 CICC 1.1%
+80%
Transaction
Amount
(USD Bn) Rank No. of deals
CITICS 70.0 3rd globally
2nd in China 58
4.0
6.8
12.5
0
5
10
15
2013 2014 2015
Ranked No.1 in Cash Equity Underwriting
Rank Underwriter Market share
1 CITICS 11.3%
2 Guotai Junan 7.8%
3 Haitong 5.8%
4 Huatai 4.8%
5 China Sec. 4.5%
4
RMB Tn
Source: Bloomberg. CITICS ECM and DCM monthly report.
+83%
1. Brokerage:Transforming to wealth management
Higher Market Share, Trading Turnover Brokerage Commissions Doubled(incl. CLSA) Market Overview 1 3 2
17
6.18% 6.46% 6.43%
0%
2%
4%
6%
8%
10%
2013 2014 2015
8.8
18.4
0
5
10
15
20
2014 2015
8.0 6.9
5.1
0
5
10
2013 2014 2015
-26%
+247%
200.2 309.8
1,076.5
0
500
1,000
1,500
2013 2014 2015
Ranking 2nd in the industry +108%
Steadily Increasing QFIIs CSI Brokerage Market Share 4 5
135 139
0
50
100
150
2014 2015
Market Average Daily Turnover
RMB Bn
Average Commission Rate in
the Market
bps
RMB Bn
(No.of clients)
Source: SH&SZ exchanges. Wind Info.
2014 2015
Rank 48th 44th
33.1
78.0
133.0
0
50
100
150
200
2013 End 2014 End 2015 End
333.0 458.4
864.4
0
200
400
600
800
1,000
2013 End 2014 End 2015 End
504.1
755.0
1,071.0
0
200
400
600
800
1,000
1,200
2013 End 2014 End 2015 End
1.Asset management:AUM increased
CITICS AUM
China AMC AUM
CITICS CAM AUM Market Overview 1 2 3
4
18
+42% +70% +49%
+26% +89%
5.2
8.0
11.9
02468
101214
2013 End 2014 End 2015 End
4.2
6.7 8.4
0
2
4
6
8
10
2013 End 2014 End 2015 End
Total AUM
RMB Tn
Fund Industry AUM
RMB Tn
RMB Bn RMB Bn
RMB Bn
Source: SAC. Wind Info.
346.5
1,025.7 1,177.5
0
500
1,000
1,500
2013 End 2014 End 2015 End
1.Margin finance:Steady growth with risk-return balance
Industry Balance
Company Balance Grew at a Slower pace than the Industry
Ranking 1st among Peers 1 3
2
19
+15%
Rank Brokers Balance as
of 2015 End(RMB Bn)
Market
share
1 CITICS 74.0 6.28%
2 Huatai 72.3 6.14%
3 Guotai
Junan 69.1 5.87%
4 Guangfa 66.9 5.68%
5 Galaxy 66.1 5.61%
Total 1177.5 100%
RMB Bn
+3%
33.4
72.1 74.0
0
50
100
150
2013 End 2014 End 2015 End
RMB Bn
Source: SAC. Wind Info.
36% 40%
64% 60%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2014 2015
Fee-basedBusiness
Capital-basedBusiness
2. More balanced revenue mix
20
Company Revenue Composition
+114%
+79%
10.5 22.5
0
20
40
60
2014 2015
18.7 33.5
0
20
40
60
2014 2015
1
Source: Internal.
RMB Bn
RMB Bn
3. Financing capabilities substantially strengthened
21
Repo 29%
Transfer of the right of return
20%
Others 8%
Gold Leasing
12%
Corporate Bond 12%
Subordinated Bond 11%
Short-term Corporate Bond
3%
Structured Notes 5%
Balanced Financing Activities 1 External Credit Line Expanded 2
+64%
Key Regulatory Ratios Improved (Parent Company) 3
19.9% 33.4%
0%
20%
40%
60%
2014 2015
Net Capital/Liabilities
35.2% 43.4%
0%
20%
40%
60%
2014 2015
Net Assets/Liabilities
Source: Internal
0
50
100
150
200
250
300
350
400
450
2013 2014 2015
Others
Mid-sizedCommercialBanks
Policy Banks
Five State-owned Banks
RMB Bn
165.1
241.4
395.8
Acquisition of KVB
22
4. Progress of our international expansion
Research co-operation
IB Capabilities Strengthened
CITIC CLSA Securities
2
1
4
Ranked 2nd in A-share and
B-share research coverage
in China by《Asiamoney 》
15 IPOs, 24 follow-ons, 19
offshore RMB bond and USD
bond issuances in HK
KVB
客户
Hong Kong
Australia New Zealand
H-share Follow-on boosted Our Capital Strength 3
84.8 104.5
0
50
100
150
2015 May end 2015 Jun end
43.6 69.7
0
50
100
150
2015 May end 2015 Jun end
Net Assets
(Parent Company)
1.1bn H-share follow-on as of Jun 2015 amounted to RMB 21.1bn
Awards Granted 5
Granted
“Best Domestic Investment Bank in HK”
“Best Domestic Equity House in HK”
“Best Domestic Broker in HK”
Source: Internal
RMB Bn RMB Bn
Net Capital
(Parent Company)
23
5. Robust risk management mechanism withstood market turmoil
Source: Internal
0.37 0.39
0.0
0.5
1.0
1.5
2.0
2014 End 2015 End
VaR 2
+7%
Centralized Risk Management Mechanism
Risk Management Committee
Risk Management Working Group
Businesses and Risk Management Unit
1
Market Risk
VaR
Stress Test
Sensitivity Analysis
Credit Risk
Internal Credit Rating
Counterparty Credit Line
Daily Marked-to-Market
Operational
Risk
Governance Structure
Operational Procedures
Liquidity
Risk
Assets Liquidity Assessment
Liabilities Maturity Monitor
Liquidity Coverage Ratio
Shortest Survival Period
RMB Bn
Mitigation Actions
4. Company Business Outlook 2016
25
Company vision and paths to achieve
“to become clients’ most trusted
leading Chinese investment bank
on a global scale
1. To provide professional services
2. To stick to a comprehensive operating model
3. To persist in the pursuit of globalization
4. To uphold the principle of market-
oriented management style
5. To abide by the core corporate value
Company Vision Paths to achieve
“13th Five-Year Plan” proposed the goals of
establishing a transparent and healthy capital market”
and “continuing to push for two-way opening up of
capital market.”. CITICS has conceived its long-term
development objective and “13th Five-Year” period
strategic goals.
Based on our business advantage, client base,
business channels and human resource, we aim to
strengthen our competitive advantage in traditional
businesses and spearhead in innovative businesses
and product compliance.
Hig
hlig
hts
Source: Internal
26
Major tasks in 2016
Cultivate a good corporate culture
In 2016, facing the complicated internal and external market environment, we will
uphold “Advance upon excellent heritage, work with tenacious attitude, unite for further
progress and endeavor to achieve prestige”.
Business Development Internal Management
(1) Strengthen client management and
marketing activities
(2) Widen the lead in fee-based
businesses
(3) Increase the utilization efficiency of
the company’s capital
(4) Forge our global business capacity
with greater force
(1) Intensify internal management
(2) Fortify human resources strategy
Source: Internal
27
Thank you!
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