Guotai Junan International Announced 2017 Interim Results: The Company Achieved Historically High Profit, Dividend and ROE

[23 August 2016, Hong Kong] Guotai Junan International Holdings Limited ("Guotai Junan International", "the Group" or "the Company", Stock code: 1788.HK) today announced its interim results for the six months ended 30 June 2017 (the "Period").

Corporate Finance and Financial Products were the major growth driver and Dividend increased significantly

Due to the Company's diversified business development strategy and the recovery of Hong Kong stock market, Guotai Junan International demonstrated strong and comprehensive financial services capability during the Period. The revenue in the first half of the year recorded a 29% year-on-year ("YoY") increase to HKD1,560 million while profit for the period rose 34% YoY to HKD726 million. The annualized Return on Shareholders' Equity achieved historically high level of 16.4%, which further consolidated the Company's leading position among peers. The board of directors proposed an interim dividend of HKD0.045 per share, with the dividend per share soared by 50% YoY.
(For the six months ended 30 June)

In the first half of 2017, income from corporate finance business recorded a 181% growth YoY to HK$442 million. During the Period, the Group's corporate finance team completed 7 IPO projects, including Guotai Junan Securities Company Limited ("Guotai Junan Securities", Stock code: 2611.HK/601211.SS), the largest IPO project in the Period, and Jilin Jiutai Rural Commercial Bank Corporation Limited (Stock code: 6122.HK) IPO project, the fourth-largest IPO in the market. The Company served key roles as sponsor, leading global coordinator and joint bookrunner. The Group ranked No. 1 for the number of IPO deals as sponsor in Hong Kong market during the Period (Source: Dealogic). In addition, the Group maintained its leading position in debt capital market in Hong Kong. The Group completed 30 debt issue deals and assisted corporates to raise HKD63.2 billion, marking a 2.6 times YoY increase.

Income from financial products business increased significantly by 68.0% to HK$104 million during the Period. The Group has greatly enhanced its competitiveness and business capacity by taking advantage of its lower funding cost and strong business partnership with large-scale international financial institutions, providing clients with a wide range of tailor-made financial products according to their needs and risk appetite.

Thanks to the on-going financial structure optimization and effective cost management, the Group's financial expenses dropped 5% YoY to HK$163 million, with cost-to-income ratio improved to 44% from 47% of the same period last year. The net profit margin rose by 2 percentage points from the same period of last year to 47%.

High-Quality Clients rose significantly; the Company became a Chinese financial institution with the leading credit ratings in Hong Kong

For the first half of 2017, the Company has introduced "Jun Hong Wealth Management (君弘財富管理)" to Hong Kong, a leading securities services club brand of its parent company, under which more sophisticated and customized financial services are offered to its high net worth clients, including the opportunities of meeting representatives of listed companies, preferential financing interest rates, exclusive investment updates, etc., receiving enthusiastic responses from our clients. The number of the Group's professional investor clients has witnessed a tremendous increase of 125.0% during the first 6 months of 2017 as compared to the end of last year. Overall, the Group has successfully recruited almost 2,000 high-quality new clients with an average account balance reaching approximately HK$8 million, soared by approximately 4 times compared to last year.
Aside from the rapid growth in the Company's financial results, the Group stood firm on maintaining a prudent risk management model. As the Group's credit ratings were upgraded, it has became a Chinese financial institution with the leading credit ratings in Hong Kong. In February 2017, Moody's Investors Service raised the Group's individual rating to "Ba1"; while in June, the S&P Global Ratings raised the Group's long-term issuer rating to "BBB+".

On the other hand, the Company adopted the new HKFRS 9 (Hong Kong Financial Reporting Standards) accounting standards ahead of schedule as well as of its peers, under which its financial conditions can be presented in a more comprehensive way, and effectiveness of the risk management system can be seen more clearly.

Dr. Yim Fung, JP, Chairman and CEO of Guotai Junan International, said, "Guotai Junan International has reaped fruitful results in the first half of 2017, with record high revenue and profit. The Company has obtained the leading credit ratings among peers, and managed to attract a number of high net worth clients. The Company's stable risk management system continued to provide a solid foundation of our business growth. In the second half of the year, even with uncertain factors such as increasing interest rate in the United States and global deleveraging trends, the inclusion of A shares to MSCI index and the establishment of stock and bond connect mechanism are still beneficial to the Company's business in the long run. We will grasp these favorable opportunities and assist the Mainland enterprises in overseas financing under different market environment, facilitating cross-border investment between the Mainland and overseas investors. We are confident in becoming a financial service provider and wealth management expert who aims at optimizing customer returns and providing tailor-made financial products and services."

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About Guotai Junan International Holdings Limited

Guotai Junan International is the market leader and first mover for internationalization of Chinese Securities Company. The Company is the first Chinese securities broker to list on the Main Board of The Hong Kong Stock Exchange by way of initial public offering. Based in Hong Kong, the Company provides diversified integrated financial services. The five core services include: (i) brokerage, (ii) corporate finance, (iii) loans and financing, (iv) asset management, (v) financial products, market making and investments.

The Company's online trading platform support a total of 8 stock markets, including Hong Kong, USA, UK, Japan, Canada, Singapore, China A share and B share, as well as more than 20 futures and options markets worldwide, providing leveraged foreign exchange trading for 8 currency pairs and 21 cross-currency pairs, inclusive of CNH.

The Company is one of the constituents of HSCI, Hang Seng Composite LargeCap & MidCap Index, FTSE HK index and FTSE HK ex H share index. Guotai Junan International has been assigned "Baa2 / Prime-2" and "BBB+ / A-2" rating from Moody's Investor Service and Standard & Poor's Global Ratings respectively.

Our controlling shareholder, Guotai Junan Securities Company Limited ("Guotai Junan", Stock Code: 601211.SH; 2611.HK), is one of the China's leading securities houses. In 2015, Guotai Junan was listed on the Shanghai Stock Exchange. In April, 2017, it was listed on the Main board at Hong Kong Stock Exchange. In 2016, Guotai Junan ranked the second among Chinese brokers in terms of revenue and net profit. Backed by strong operational support, the Company will be able to further explore the HK and the Asia-Pacific market.

For more information about Guotai Junan International: http://www.gtja.com.hk.