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Ray Chan

Haitong International Securities, the overseas arm of the mainland's second-largest brokerage, said net income rose 80 per cent to HK$529 million last year.
The results, foreshadowed in a positive profit alert last month, were bolstered by improved broking and margin financing business, and strong growth in its structured financing and fixed income, currencies and commodities (FICC) units.
"The firm is undergoing an orderly, swift transformation, where we have shifted our focus to capital-based intermediary business from a conventional brokerage business model," deputy chairman Lin Yong said yesterday. "Our trading volume of overseas futures contracts jumped over 50 per cent last year, a sign of robust trading activity."
Haitong's FICC units posted a 250 per cent increase in net profit.
Profit from broking and margin financing soared to HK$204 million from HK$51 million, thanks to a robust trading environment overseas that offset persistent weakness in Hong Kong.

	With our savvy risk management system … [we] can boost our performance

	LIN YONG, DEPUTY CHAIRMAN
Broking and margin financing accounted for 49 per cent of overall revenue.
Haitong set up an office in Singapore in January.
"The Singapore office has yet to be a major contributor to our group but remains important to our global expansion plan," Lin said.
Haitong said it was on track to obtaining a brokerage licence in the United States and hoped to unveil further details in the second half of the year.
Net profit at the structured financing unit more than doubled to HK$207 million.
The firm's return on equity, a measure of profitability, rose to 13 per cent from 9.3 per cent, while its leverage ratio, a measure of indebtedness, jumped to 3.4 from 2.6.
Lin said the company's gearing level was well below the international standard of up to 20 times and its ample capital position provided room for further leverage.
Haitong raised more than HK$5 billion last year through a rights issue, a syndicated loan and the issuing of a convertible bond.
"With our savvy risk management system, using leverage properly can boost our performance," Lin said.


Shift in business focus pays off for Haitong International Securities

Haitong deputy chairman Lin Yong.

Business

China Business