On March 23rd, Yuexiu Financial Holdings (000987.SZ) released its first annual report following a significant increase in its financial assets. Since financial business was included into the consolidated statements of the company from May 1st, 2016, Yuexiu Financial Holdings has witnessed a significant improvement in its asset strength and profitability.
By the end of 2016, its total market value reached 32.2 billion yuan, ranking 324th among the top 500 listed companies of China; its total assets increased by nearly 20 times compared with the end of 2015 to reach 66.835 billion Yuan; owners' equity grew by 461.20% to 12.477 billion yuan for the same period. During the reporting period, the company's gross revenue was 5.741 billion yuan, increasing by 104.73% year on year. The net profit attributable to shareholders of the listed company was 620 million yuan, growing by 170.88% year on year.
-- The first local financial holdings listed platform in China Founded
In 2016, Yuexiu Financial Holdings smoothly completed its first private placement at the level of ten billion yuan, adjusted the company's governance structure and officially transformed from a department business to a two main business mode of "Finance + Department Store". Meanwhile, Yuexiu Financial Holdings also quickly launched another major assets reorganisation of nearly 10 billion yuan with plans to acquire a 32.765% of Guangzhou Securities from its minority shareholders and raise a supportive fund of 2.84 billion yuan. After the reorganization is completed, the net assets of Yuxiu Financial Holdings will belong to the mother company and are expected to exceed 20 billion yuan.
--Operating performance staying stable, remarkable effects achieved in business transformation
Whilst, overall, the securities sector has faced a substantial decline in operating performance, Guangzhou Securities has achieved a net profit of 965 million yuan, up 4.57% year on year. Capital intermediary business has risen rapidly, its ranking in the advantageous business sector further enhanced with number of bond owners ranked 18th in the industry. Its net income from asset management business is ranked 13th, the scale of pledge of stock rights 9th in the industry, and its number of companies listed in the NEEQ (National Equities Exchange and Quotations)continues to secure the first position in the industry. Yuexiu Leasing has confirmed a business development direction of "1+ 4 + X" mode.(1 means urban infrastructure and 4 means education, medical treatment, water affairs, tourism) Throughout the year, an investment of 12 billion Yuan on projects, representing an increase of 32.2% year on year, has resulted in a net profit of 232 million Yuan, an increase of 91.16% year on year. In the fourth quarter, its department store business achieved positive profit growth for the first time in 17 successive quarters, and successfully reversed the declining trend of operating performance, maintaining a stable overall operation. Throughout the year, it has achieved a net profit of 227 million Yuan, a fall of 0.99% year on year.
--Breakthrough achieved in core business expansion and deployment of new industries
Yuexiu Financial Holdings has been approved to take the lead to establish the second local asset management company of Guangdong Province, with a registered capital of 3 billion Yuan. Guangzhou Securities has been rapidly promoting its deployment of outlets across the nation, which has opened 23 branches and 80 business departments throughout the year. The total number of its branches has reached 27 and the number of sales departments has reached 133, which have covered most provinces and major cities across China. Yuexiu Industrial Funds has managed to establish Guangzhou Innovation Investment Fund for State-owned Assets and Enterprises. In the first phase, FOF(fund of funds) has a scale of 2.61 billion yuan, which will be initiated by 14 municipal state-owned enterprises of Guangzhou. Guangzhou Futures has successfully been listed in the NEEQ and becomes the first futures company to be listed in the NEEQ in Guangdong.
During 2017 Yuexiu Financial Holdings plans to accelerate its transformation and upgrade, enhancing the level of refined management, deepening the reform of systems and mechanisms to ensure that the company seeks to maintain and improve stability. Meanwhile, grasping the opportunity of counter-cyclical layout, it will step up efforts in M&A restructuring and capital operation, accelerate the pace of enhancing the strength and scale of its core business and promote resource integration over a larger scope.
When outlining its plan for the future, Yuexiu Financial Holdings said the company will adhere to the development philosophy of "aiming high and seeking progress in stability" ,determined to become a large listed group with a market influence that takes capital market as the tie based on two major businesses, the finance and department stores. Its financial business will be based on securities and leasing, enlarging the scale of asset management, planning the industry of insurance and trust, optimizing and promoting its small and micro financial business, and building a financial holdings group with efficient services, an outstanding and highly competitive brand. Its department store business will build a new-type commercial trade service and retail enterprise valued at ten-billion-yuan that is characterized by "complete channels, high quality, effectiveness and intelligence" by innovating its development mode, system and mechanism.