Hong Kong company reporting season

Haitong’s interim net profit gains 28 per cent as stockbroking improves in a rising market

Profit rose on the back of better performance in its corporate finance and its fixed income, currencies and commodities divisions.

PUBLISHED : Tuesday, 29 August, 2017, 11:17pm
UPDATED : Tuesday, 29 August, 2017, 11:17pm

Haitong International, the Hong Kong-traded unit of one of China’s biggest stockbrokers, said its interim net profit rose 28 per cent from improved performance in corporate finance, and from fee income earned fro its fixed income, currencies and commodities trading businesses.

Net profit rose to HK$1.04 billion (US$133 million), on the back of what the broker described as “improved market atmosphere.”

As many as 69 companies chose to raise their capital in Hong Kong in the first six month of 2017, a substantial increase from 38 in the same period last year. The total amount of capital raised fell 22 per cent during the interim to HK$53 billion, due to the dominance of small-and-medium companies seeking to raise capital.

Still, smaller IPOs tend to favour Chinese brokers, as their smaller fees deter Wall Street and European competitors. That’s helping Haitong and other Chinese brokers take increasing chunks of the deal from global bulge bracket banks operating in Hong Kong.

Haitong underwrote and completed eight initial public offerings (IPOs) during the first six months in Hong Kong, ranking second among the city’s financial service providers. It’s also been expanding its underwriting and stockbroking businesses overseas, completing IPOs in Singapore and Mumbai.

As for fixed income currencies and commodities, Haitong said that it had secured 64 new institutional clients. It also benefitted from higher trading volumes, as the transaction volume of Asia’s US dollar high-yield bonds in the secondary market registered a year-on-year growth of 30 per cent.

The company said it’ll pay an interim dividend of HK$0.10 per share. Haitong shares fell 0.2 per cent to HK$4.85 before earnings were announced.