HTSC (HKG:6886; the Company) announced its interim results for the six months ended June 30, 2021. The Company achieved RMB 24.62 billion in total revenue and other gains with a year-on-year increase of 29.75%. Profit for the period attributable to shareholders increased 21.32% to RMB 7.77 billion. The Company’s deepening digital transformation and platformization have fostered a new business and development model, bolstering wealth management and institutional services and continuing to improve the comprehensive strength of the Company, delivering another set of financial result records for the first half of 2021.
Platformization Brings Efficiency as Number of New Clients Hits 1.83 Million
With the next wave of digital disruption and a new generation of investors at play, the Company implemented a linear organizational structure in tandem with its integrated platformization, to improve client services and asset allocation efficiency. As of June 30, 2021, the total number of clients reached 18.92 million, with total assets of client accounts exceeding RMB 5.2 trillion. The trading volume of stocks and funds in the first half of the year was RMB 18.04 trillion, ranking first in the industry.
Focused on clients’ needs and empowering investment advisors, the integration of ZhangLe Wealth, HTSC’s flagship wealth management App, and the Company’s cloud platform for investment advisory service, has been fruitful. The product-orientated and intelligent operations of the Company’s wealth management have been widely recognized, with over 1.83 million new users registering on ZhangLe Wealth in the first half of 2021. HTSC’s cloud platform for investment advisory service continues to empower investment advisors in their decision-making, work efficiency, and client servicing capabilities. Huatai International, the Company’s international business arm, continued to optimize its trading services on the ZhangLe Global App.
According to data released by the Asset Management Association of China (AMAC), equity and mixed mutual funds and non-money-market mutual funds sold by HTSC were worth RMB 107.9 billion and RMB 112.6 billion in the second quarter of 2021, both ranking second in the securities industry, a testament to the Company’s enhanced asset allocation services capability and optimized technology-driven sales platforms for its clients. In the first half of 2021, sales of financial products grew steadily, amounting to RMB 365.44 billion.
Growth of funds advisory business accelerated the adoption of the new wealth management business model and by leveraging the digital and integrated platform, the synergy between the Company’s headquarters, the front, middle and back offices have been fully realized. This integrated model has improved the Company’s buy-side investment research and provided differentiated portfolio strategies and solutions for clients and investment advisors. In the first half of this year, the fund advisory business exhibited steady growth and remains an industry frontrunner.
HTSC’s US subsidiary AssetMark – a leading US turnkey asset management platform (TAMP) – also grew steadily, with total assets under management reaching USD 84.59 billion at the end of June 2021, an increase of about 13.52% over the end of 2020.
Bond Business Breakthrough and Institutional Business Revenue Surges 40%
Buoyed by the robust performance of trading and investment banking services, coupled with more than a 20% increase in institutional clients and 42% increase in overseas institutional clients in the first half of the year, HTSC’s institutional business revenue grew 43.95% to RMB 6.51 billion year-on-year, accounting for 26.43% of the Company’s total.
In the first half of the year, the Company’s principal underwriting for equities was RMB 68.99 billion, ranking third in the industry. Principal underwriting for bonds that focused on local government bonds and corporate bonds achieved breakthrough results, amounting to RMB 404.36 billion, up 75.84% year-on-year, ranking third in the industry. In the same period, the Company’s overseas business remained resilient, sponsoring five Hong Kong IPOs, including that of China Youran Dairy Group, ranking second among Chinese securities firms; and two US IPOs including digital logistics firm Full Truck Alliance.
HTSC retained a top spot in the STAR market, sponsoring 55 STAR Market listings and completing 27 listings in the first half of the year, ranking second in the industry. The Company also rekindled its connection with WingTech after participating in their goliath 2019 semiconductor M&A transaction, to issue RMB 8.6 billion in convertible bonds – the largest private refinancing project in Shanghai this year.
The Company’s investment trading business continued to optimize its asset pricing ability, production innovation and risk hedging capabilities, accelerating the adoption of a customer product, and risk management system used by domestic and international clients alike. The investment trading business saw overall improvements in profits, as evidenced by the industry-leading OTC derivatives and OTC options trading volume in the first half of 2021.
The HTSC Connect App, developed for institutional clients and services, continues to innovate the user experience and galvanize the Company’s competitive advantages in securities lending. As of the end of June, the balance of the securities lending business was RMB 28.7 billion, up 694.66% year-on-year, to maintain 18.39% of the market share.
HTSC has also strategically invested and entered into tactical commercial partnerships with various cutting-edge and highly promising cloud computing and AI companies, to perpetuate and further strengthen the Company’s digital transformation and platformization. At present, the Company has strategically invested in 10 fintech companies, establishing a solid foundation for innovation, creation and further digital breakthroughs.
Green Bond Leadership Testament to Global ESG Esteem
HTSC’s commitment to the environment, social and governance (ESG) at an operational and business level are hallmarks of the Company and evidenced by the upgraded ESG rating of “A” from MSCI, ranking the top among its peer group. The Company’s wholly-owned subsidiary, Huatai Securities (Shanghai) Asset Management Co., Ltd. has also become a signatory of the United Nations-supported Principles for Responsible Investment (UNPRI).
HTSC has made a great contribution in supporting China’s carbon peaking and neutrality pledge and continues to strive to better serve the green and low-carbon development of the real economy. In the first half of the year, the Company issued RMB 9.898 billion green corporate bonds (including asset securitization products), leapfrogging to first place in the industry. Furthermore, the Company has participated in numerous innovative industry-first energy conservation and carbon reduction projects, including the issuance of Shougang Green Energy, one of the first publicly offered infrastructure REITs, as well as the issuance of one of the first carbon neutrality bonds by China Energy Investment Corp.
The Company’s corporate philanthropic initiative “Yixin Huatai” deepened its work in protecting the Yangtze River basin ecology. Ahead of the UN Biodiversity Conference (COP 15) in Kunming, China, HTSC shared an active voice on the importance of biodiversity by hosting a live broadcast of its “Yixin Huatai – One Yangtze River” project during Earth Hour, as well as staging an art exhibition on biodiversity, which garnered over 2.66 million visits.
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