CICC Announces 2019 Annual Results Net Profit Achieves RMB4.24 Billion Increases by 21.4% Year on Year

2020-03-31Corporate News

Financial Summary

In 2019, CICC posted
total revenue and other income of RMB22.78 billion, representing an increase of 22.9% year on year;
net profit[1] of RMB4.24 billion, representing an increase of 21.4% year on year; 
weighted average return on net assets of 9.6%.

As of December 31, 2019, the Company had
total assets of RMB344.97 billion, representing an increase of 25.3% compared with the end of 2018; 
net assets[2] of RMB48.29 billion, representing an increase of 14.5% compared with the end of 2018. 

 

China International Capital Corporation Limited (“CICC” or “the Company”, Stock code: 3908. HK) announced its annual results for the twelve months ended December 31, 2019. As at the end of 2019, the total assets of the Group amounted to RMB344.97 billion, representing an increase of 25.3% compared with the end of 2018; net assets[2] amounted to RMB48.29 billion, representing an increase of 14.5% compared with the end of 2018. Our Group recorded total revenue and other income of RMB22.78 billion, increasing by 22.9% year on year; and net profit[1] of RMB4.24 billion, increasing by 21.4% year on year, with a weighted average return on net assets of 9.6%. 

In 2019, to cope with the complicated and changing macro and market environment, we maintained sound business momentum. In line with the missions of “serving the real economy, preventing and controlling financial risks and advancing financial reforms”, we promoted the healthy development of various businesses, further expanded our international presence and continued to improve our institution, so as to achieve steady and rapid growth and generate sound returns for shareholders. We have comprehensively reinforced the structure of “two bases and six pillars” and continued to improve our business capabilities and consolidated our advantages in institutional, high-end and cross-border businesses.


Maintaining a leading position in core businesses

Our investment banking business fully supported the development of the real economy. In 2019, our Company ranked first acting as sponsor in terms of underwriting amount achieved in A share IPOs and the Hong Kong stock market, second in terms of underwriting amount in US IPOs of PRC-based companies, and first acting as sponsor in terms of underwriting amount of IPOs on the science and technology innovation board. Our Company ranked third among securities firms in terms of onshore bond offerings with an increase of approximately 40% in aggregate underwriting amount compared with the same period of last year. As for the M&A business, our Company played a lead role in a number of milestone large-scale industrial restructuring and debt restructuring projects. Through consolidating our business advantages in the primary market, we have supported the development of the new economy with diversified financial means, so as to contribute to supply-side structural reforms, drive the financial industry to service the real economy and prevent and mitigate risks.

Our equities business embraced opportunities for institutionalization, productization, and internationalization. With institutional client focus, our equities business capitalized on opportunities from the reform, innovation, and opening-up of the capital market to promote product innovation, enhance cross-border business capabilities, and enhance the rapid development of businesses such as prime brokerage business and derivative products business. We were committed to developing the exchange and OTC business in domestic and overseas markets, and contributed our share to bolstering areas of weaknesses and further improving trading functionality. In 2019, the prime brokerage business and derivative products business in mainland China showed continuous growth in terms of scale, and the Hong Kong prime brokerage business ranked among the top in overseas markets in terms of business size. These results contributed to our leading position and steady growth in the Connect business in terms of coverage of clients and market share.

Our FICC trading and comprehensive service capabilities continued to grow. Relying on our comprehensive trading qualifications, industry-leading trading capabilities and extensive dealer networks, our trading teams continued to demonstrate strong trading and risk control capabilities and achieved stable investment income, which have won us honors and awards in terms of inter-bank market trading and market-making. We have steadily improved our client service capabilities in the FICC business, and gradually built an integrated platform that covers interest rate, credit, foreign exchange, commodities, securitization, derivatives and futures to provide sales, research, trading, financing and cross-border services. Capturing opportunities from the opening-up of the bond market, we ramped up our international strategy, and were honored the “Opening-up Award” in in the interbank local currency market.


Achieving growth in the size of emerging businesses

We maintained industry-leading position in terms of the total assets under management of private equity investment. CICC Capital has built a comprehensive and integrated platform for private equity investment fund with multi-layered risk diversification, becoming one of China’s largest platforms for private equity investment. In 2019, with close focus on the national strategy and in order to support China’s economic transformation and upgrading, CICC Capital has actively deployed large funds in key areas of strategic significance, continued to enrich product lines and cultivated cross-border business capabilities, with the aim to support industrial reshuffle, regional development and the growth of new economy through vigorously mobilizing social resources. At the end of 2019, the total size of assets under the management of private equity investment business of the Group amounted to over RMB300 billion, with a year-on-year growth rate of nearly 10%.

Our asset management business continued to make breakthroughs. Relying on our advantages as a comprehensive investment banking platform, we have been committed to building a comprehensive asset management platform with multiple assets, multiple strategies and cross-market capacities. In 2019, seizing opportunities from institutionalization and the offering of NAV-based products, we focused on strengthening our investment research teams. As a result, we have achieved    stable investment performance, made breakthrough progress in corporate annuities, bank wealth management subsidiaries and insurance outsourcing business, and steadily improved our proactive management capabilities for cross-border businesses. Our mutual fund business achieved breakthroughs in the number of clients and institutional access, and launched new products such as strategic placement on the science and technology innovation board. At the end of 2019, our total assets under management exceeded RMB500 billion, representing a year-on- year increase of nearly 50%.

Our wealth management forged ahead with business integration and transitioning. In three years after the integration, we managed to gain new ground in transformation, laying a sound foundation for forward growth. We continued to intensify the development of wealth management platforms as well as the establishment of the Private Wealth Management (PWM) division and the Global Family Office (GFO) teams to provide “wealth planning + asset allocation” solutions. With the optimization of wealth management service models, our product sales continued to reach new heights and product assets have accumulated rapidly. We have proposed to establish joint-venture technology company with Tencent to capture development opportunities in wealth management business.


Realizing solid progress in research and information technology

We committed our research work to become as the “China Expert” with international perspectives. Riding on our advantages in “one team across two markets”, our research business closely followed trends of the global market, and focused on professional analysis of macroeconomics, market strategies, asset allocation and stocks, thus supporting various business lines. 

Information technology was moving towards systematization, platformization and intelligence. Our Company has newly developed and launched multiple core business and management systems, and gradually developed three basic technology systems regarding trading, products and services, and risk control and operation management. We also have established a technical support platform for business lines through connecting and integrating core business systems, which can fully support our core businesses and the rapid launch and scaled development of our innovative businesses.


Outlook

Looking into the future, CICC will actively seize strategic opportunities, accelerate investment and increase market share. We will continue to leverage our leading advantages in investment banking, research, cross-border and other businesses, and continuously improve our comprehensive strengths. With the guidance of innovation and the support of technologies, we will enhance risk control and compliance management, and continue to improve our organization, so as to fulfill our social responsibility and support the national strategy. In line with our value of “By the People and For the Nation” and mission of “Chinese Roots and International Reach”, we will make every effort to become a world-leading international investment bank.


Note: 
[1] Net profit refers to net profit attributable to Shareholders of the Company and holders of other equity instruments.
[2] Net assets refers to total equity attributable to shareholders of the Company and holders of other equity instruments.