CICC Announces 2021 Interim Results Net Profit Increased 64.1% YoY to RMB5.0Billion

2021-08-27Corporate News

Financial Summary

In 2021H1, CICC posted
► total revenue and other income of RMB14.5billion, representing an increase of 37.8% year on year;
► net profit [Note 1] of RMB5.0 billion, representing an increase of 64.1% year on year;
► weighted average return on net assets (ROE) of 7.0%.

As of June 30, 2021, the Company had
► total assets of RMB618.1billion, representing an increase of 18.5% compared with the end of 2020;
► net assets [Note 1] of RMB78.8 billion, representing an increase of 10.0% compared with the end of 2020.


China International Capital Corporation Limited ("CICC" or "the Company", stock code: 3908.HK, 601995.SH) announced its interim results for the six months ended 30 June 2021. The Company recorded total revenue and other income of RMB14.5billion in the first half of the year, up 37.8% compared to the same period last year; and net profit[Note 1] was RMB5.0billion, up 64.1% year on year; and the weighted average return on net assets (ROE) was 7.0%. The Company’s businesses continued to grow, with total assets of RMB618.1billion as of 30 June 2021, up 18.5% from the end of 2020; and net assets[Note 1] of RMB78.8 billion, up 10.0% from the end of 2020. 

In the first half of 2021, with sustained recovery of the domestic economy and booming capital markets, CICC actively leveraged its expertise to serve the real economy through multiple financial channels. The Company closely followed the national policy of “Carbon Peak and Carbon Neutrality”, and was fully committed to green finance development. The Company has actively seized strategic development opportunities in the securities industry, steadily advanced the implementation of the “Three + One” strategies, i.e. digitization, regionalization, internationalization and “One CICC”, and continued to maintain a solid momentum of all business lines.

 
Maintained high-quality development across the board and comprehensively improved service capabilities

The investment banking business achieved significant growth for both the increment and growth rate. In first half of 2021, investment banking business closed total of 563 deals, up 48% compared to the same period last year; total amount of the deals exceeded RMB 800billion, almost doubled compared to same period of 2020. CICC maintained its leading position in domestic and overseas equity business. It closed 7 A-share IPOs acting as the sponsor, with an aggregate sponsored amount of RMB13,111 million. Achieving an outstanding performance in overseas equity business, the Company closed 15 Hong Kong IPOs acting as the bookrunner, with an aggregate lead underwriting amount of US$1,966 million, which was four times as compared to 2020H1. The refinancing business continued to develop, and the Company completed 14 A-share follow-on offerings, with an aggregate lead underwriting amount of RMB35,078 million, ranking No. 2 in the market. In terms of debt and structured financing, CICC ranked first in terms of the convertible bonds offering amount, and the underwriting amount, market making, strategic investment and research coverage of infrastructure publicly-offered REITs. CICC maintained its leading position in the offshore bonds offering and achieved historical breakthroughs, and it ranked first in terms of the overseas debt capital raising amount and overseas convertible bonds offering amount of PRC-based companies. At the same time, the Company continued to reinforce its leadership in the M&A business, ranking No.1 in the PRC M&A market with a market share of approximately 17.9%.

The equities business actively responded to the national strategy, continued to accelerate the pace of transformation and upgrading, continued to strengthen customer coverage, products and services, and at the same time improved integrated comprehensive service capabilities. In the first half of 2021, all product lines of the equities business maintained strong momentum and the equities business saw a significant year-on-year increase in business revenue, with a balanced structure of domestic and overseas, on-exchange and OTC business revenues. The institutional client base continued to be consolidated and the customer coverage of the Company in long funds, insurance companies and hedge funds continued to remain at a high level. The trading market share reached a high record, and the mutual fund investment research ranking was constantly improved. The Company continued to develop and innovate, and the product business scale steadily increased. At the same time, it gave full play to the advantages of cross-border business, and the equities business maintained a leading QFII coverage in the domestic market for 18 consecutive years. The market share of CICC in Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect continued to remain high, once again won the Most Active Broker Award on Hong Kong Stock Exchange, Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect.

The FICC business forged ahead with focus on client service, and growing its market scale. The Company continued to strengthen product innovation, released many innovative businesses, and continued to build an all-round fixed-income service and support platform covering market making, financing, and cross-border businesses. Despite volatilities in the market, the trading business continued to showcase sound trading and risk control capabilities, and capture market opportunities. The FICC business continued to strengthen infrastructure development, advanced the integration of business and technology, and vigorously promoted digital transformation. In the second half of the year, the FICC business will continue to promote business transformation, enhance its comprehensive client service capabilities, and develop a first-class market-making platform for FICC products cross-border, cross-market and cross-platform.

The asset management business continued to enrich its product layout and continuously enhanced its comprehensive client service capabilities. The Company aims to build a world leading all-round asset management institution by developing innovation strategies, promoting the construction of the investment and research system, expanding client coverage, promoting the transformation of digital construction, strengthens risk management and control as well as improving management efficiency. As of June 30, 2021, the AUM of the Asset Management Department of the Company was RMB939,397 million, representing an increase of 83.1% compared with the end of 2020. We had altogether 660 products under management, most of which were under active management. CICC Fund Management continued to invest in capacity building of the investment and research team, maintained steady operations, and strived to improve long-term performance. The AUM of CICC Fund Management amounted to RMB69,226 million, and the size of mutual funds increased to RMB68,027 million, representing an increase of 26.0% compared with the end of 2020.

The private equity investment business achieved long-term stable development. It continued to improve its market position, made strategic investments in emerging industries, and accelerated the implementation of carbon-neutral funds to closely follow China’s Goals of Carbon Peak and Carbon Neutrality. The types of funds managed by CICC Capital mainly includes domestic corporate equity investment funds, fund of funds, US dollar funds, real estate funds, and infrastructure funds. The industries covered include high technology, high-end manufacturing, comprehensive healthcare and consumption. CICC Capital established industrial funds in the high-end manufacturing sector through strong cooperation with leading industry groups; actively expanded investment in new products in the middle market and accelerated the raising of funds product. CICC Capital accelerated regional layout, providing a full range of services to support technological innovation and investment in various regions through funds of funds and direct investment funds. Through excellent investment management and effective risk control, as of June 30, 2021, the assets under the CICC Capital’s management through a variety of ways amounted to approximately RMB303,215 million. In the second half of 2021, CICC Capital will make strategic investments in emerging industries and accelerate the implementation of carbon-neutral funds to closely follow China’s Goals of Carbon Peak and Carbon Neutrality.

The wealth management business has been under steady progress in transformation and maintained a good momentum of growth. In terms of product allocation business, the Company continued to provide high-quality investment analysis through the Company’s professional research capabilities and screened out high-quality products for clients. As of June 30, 2021, the product assets exceeded RMB200 billion, with a year-on-year increase of 91%. In addition, the Company continued to strengthen product innovation capabilities and accelerated the deployment of asset allocation products. As of June 30, 2021, the buy-side fee-based assets [Note 2] reached RMB50 billion. In the trading business, the market share further increased to 2.33%. At the same time, the Company expanded the scale of international business, achieving a rapid growth in overseas revenue year-on-year. The Company continued to optimize the business segmentation strategy, with the private wealth management business growing rapidly and the business for the mass and affluent customers growing steadily.

 
CICC Research focuses on the global markets and is committed to serving public policy

The scope of CICC’s research products and investment analysis ranges from macro economy and market strategy to fixed income, financial engineering, asset allocation, commodities and other industries. As of June 30, 2021, the research team employed more than 240 highly experienced, high-caliber professionals covering more than 40 sectors and over 1,200 companies listed on stock exchanges in the Chinese Mainland, Hong Kong SAR, New York, Singapore, Frankfurt, London and Paris.

Since its establishment in 2020, based on the expertise and experience of CICC research, CICC Global Institute (CGI) has adhered to a rigorous, solid and forward-thinking attitude, aiming to build itself a China’s high-end think tank to serve the national strategies. It successfully held forums and released important reports on carbon neutrality and green economy. CGI aims to support public policy research and decision-making, build domestic and international communication platforms, actively carry out foreign cooperation, and enhance research coverage and market influence. CGI has been widely recognized and praised by the market for its independent, objective and insightful research products. 

 
Outlook

In the future, facing the current strategic opportunities for the great development of the securities industry, CICC will always adhere to the original aspiration of serving “for the nation” and integrate its own development into the overall development of the country. It will keep on the “client first” value, focusing on client needs and deepening the comprehensive financial service capabilities. CICC will continue to improve its comprehensive competitiveness, invest into the future, scale up efforts in digitalization, regionalization, and internationalization, and provide long-term and stable financial support for the enterprises. It will concentrate on serving the real economy, improve residents’ assets preservation and appreciation, and usher in a new stage of high-quality development.


Note:
[1] Net assets refer to total equity attributable to shareholders of the Company. Net profit refers to net profit attributable to shareholders of the Company
[2] Including paid solutions based on buy-side investment advisory services, such as China 50, Mini 50, fund investment advisory, and various themed FOFs