Thu May 13, 2021 23:34
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TONGHAI FIN (952)

Principal Activities

Principally engaged in a) discretionary and non-discretionary dealing services for securities, futures and options, securities placing and underwriting services, margin financing and money lending services, insurance broking and wealth management services; b) corporate finance advisory and general advisory services; c) fund management, discretionary portfolio management and portfolio management advisory services; d) investor relation, online advertising and financial information services; and e) investment holding and securities trading.

Latest Results

The Group's loss attributable to shareholders for the 6 months ended 30-06-2020 amounted to HKD 161.6 million. Basic loss per share was HKD 0.0263. No dividend declared. Turnover amounted to HKD 272.3 million, a decrease of 40.7% over the same period last year, gross profit margin down 13.4% to 68.4%. (Announcement Date: 27 Aug 2020)

Business Review - For the six months ended June 30, 2020

Since the beginning of 2020, the novel coronavirus pandemic has brought uncertainties to the operating environment of the Group. In respect of the operating targets completed in interim 2020, the overall figures declined compared with those in interim 2019. The Group’s market share in the secondary stock market of Hong Kong decreased slightly year-on-year. In interim 2020, the Group entered into 1 sponsorship engagement for initial public offerings. We also signed 5 financial advisor/independent financial advisor mandates and were underwriters in 10 initial public offerings and other fund raising exercises. As at 30 June 2020, our assets under management (“AUM”) reached US$259 million, representing a decrease of 14% from the same period in 2019 and a decrease of 8% from the end of 2019, mainly due to the decrease in value of investment portfolio. Total loans (including margin loans, other loans and advances to customers for merger and acquisition activities) amounted to HK$5,169 million, representing a decrease of 5% from HK$5,466 million as at 31 December 2019. Given the volatile market condition in the first half of the year, the Group took the initiative to reduce the level of margin loans. Hence, as at 30 June 2020, the Group’s margin loans amounted to HK$1,668 million (trade date basis), representing a drop of 16% from HK$1,978 million (trade date basis) as at the end of 2019.

Business Outlook - For the six months ended June 30, 2020

Encountering various complex objective factors, such as geopolitical issues, growing tension between the Sino-U.S. relation, impacts of the ongoing novel coronavirus pandemic on the real economy, volatility of the capital market and changes in credit levels of our customers, we expect to encounter severe operating conditions in the near future. In Hong Kong, in the midst of economic downturn, rising unemployment rate and certain sectors are particularly hit by the novel coronavirus pandemic, we are highly conscious about potential provisions arising from future expected credit losses.

In addition, the interest rate in the U.S. has remained low for a period of time, governments of different countries have implemented various counter pandemic subsidies which resulted in large amounts of funds channeled into the capital markets but real economic activities have experienced drastic decrease due to the novel coronavirus pandemic, the continuation of these circumstances will also pose challenges to the Group. During the first quarter of this year, the Group has initiated cost control measures to curb unnecessary expenses. It is expected that the cost control measures will continue to be in place in the second half of the year to mitigate the pressure from possible decrease in revenue. In light of the considerable uncertainties for the current situation, the Group will, from time to time, review our investment portfolios and business segments, to ensure a smooth transition in the severe environment.

Notwithstanding the above, the Group still strives to explore new securities customers and to increase the number of corporate financing and financial advisory projects, as well as launching new product platforms (such as Quamnet Derivative investment platform) and seeking to broaden assets management products.

Looking forward, we will commit to unite and perform ourselves well. We hope that with the end of the novel coronavirus pandemic and after other uncertainties have been removed, the business environments of Hong Kong and the world will return to normal, such that the Group’s results can be restored to a relatively normal level and bring higher return to all shareholders.

Source: China Tonghai Int'l (00952) Interim Results Announcement

Business Nature

Principally engaged in a) discretionary and non-discretionary dealing services for securities, futures and options, securities placing and underwriting services, margin financing and money lending services, insurance broking and wealth management services; b) corporate finance advisory and general advisory services; c) fund management, discretionary portfolio management and portfolio management advisory services; d) investor relation, online advertising and financial information services; and e) investment holding and securities trading.

Prospect

Like all our peers, we have encountered various complex macro-economic circumstances in 2020, including but not limited to prolonged global novel coronavirus pandemic, growing tension between the Sino-U.S. relations, volatility of the capital markets in different countries, rising unemployment rates in Hong Kong, etc. In Hong Kong, the real economy has been hit hard by the pandemic and the Government has timely put up relief measures and support schemes to individuals as well as corporations since early 2020. We are pleased to tell our shareholders that we have collected the necessary and appropriate amount of government subsidies from the Hong Kong Government in 2020 and those amount has been disclosed in our financial statement. Having reviewed what had happened in 2020, we are now dedicated to plan our future for our shareholders. We had various meetings, formal and informal, discussing what would be the best strategy for our company in 2021 and/or in three years' time. There are various areas that we have decided to focus more in the near future. Firstly, the Group is reviewing and reallocating our investment portfolios to adjust to the right risk appetite under the current macro-economic environment. Secondly, the Group is strengthening our recurring business by reviewing the key businesses like private client service, wealth management service, corporate finance and asset management businesses. Thirdly, the Group is likely to control the resource spent on capital-driven business and wisely use our overall leverage. Yes, we are facing an entirely new competing environment like the novel coronavirus pandemic and geo-political uncertainties.

Chairman and Executive Director
Han Xiaosheng
Contact Info
Company Address:
18th and 19th Floors, China Building,29 Queen's Road Central, Hong Kong
Web: http://www.tonghaifinancial.com
Quote
HSI: 27,718.67 -512.37
0.249
0.00 (0.00)
As of16:10 13 May 2021
Open: 0.24 52Wk High: 0.34
Day High: 0.249 52Wk Low: 0.165
Day Low: 0.24 P/E: 14.821
Prev. Close: 0.249 Yield: 2.008%
Volume: 140K
Mkt Cap: 1.54B
Turnover: 33.87K NAV: 0.951
Quotes are delayed by at least 15 minutes.
Contact TONGHAI FIN
Company Address:
18th and 19th Floors, China Building,29 Queen's Road Central, Hong Kong
Web: http://www.tonghaifinancial.com

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