HONG KONG, Feb 10 (Bernama-BUSINESS WIRE) -- Guotai Junan International Holdings Limited (“Guotai Junan International”, “GTJAI”, the “Company” or “Group”, stock code:1788.HK) is pleased to announce that Moody’s Investor Service (“Moody’s”) , the major global credit rating agency, has reaffirmed the Company’s “Baa2” long-term issuer rating with a stable outlook. This is the second time that the Company has obtained the reaffirmed investment-grade credit rating by Moody’s since July 2019, indicating the highest rating among the Chinese securities companies in Hong Kong currently.
Fundamentals of Rating Based on Three Strengths
According to Moody’s, the standalone assessment of GTJAI reflected three credit strengths: 1) leading position in the niche market of helping individuals from the mainland trade offshore securities; 2) relatively good and stable profitability; 3) long track record of operating in the Hong Kong securities market. The report mentioned that GTJAI’s stable rating outlook reflected that the Company is expected to maintain sound financial metrics, and government’s support is unlikely to change in the next 12-18 months.
Good Profitability in Recent Years with Increasing Commission
Moody’s pointed out that GTJAI has maintained good profitability metrics in recent years. The Company’s brokerage commission rose by 7% in the first half of 2019 while the average daily stock trading volume in the Hong Kong market declined by 23% during the period. Meanwhile the Company’s fee income from Corporate Finance business increased by 35% in the first half of 2019, mainly driven by its strong performance in debt underwriting.
Transparent Business Model and Prudent Risk Management
The report also stated that GJTAI has a transparent business model and follows prudent risk control procedures. From 2-year observation, Moody’s opined that the business model of GTJAI’s structured products (financial products) is transparent and effective. Moody’s in its report also mentioned the underlying assets of structured products, as well as the Company’s built-in risk control measures in structured products business.
GTJAI believes that the current credit rating reflects the outstanding performance of the Company in terms of product diversification, transparency in business model and prudent risk control in times of rapid growth. Looking forward, the Company is dedicated to putting forward “Risk Management Creates Value” as the development strategy in the new era. The Company will strive to enhance risk-adjusted return on capital, pursue a high-quality and sustainable development and reward clients and investors for their long-term support with a steady and desirable growth.
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 core services include: wealth management, brokerage, investment banking, loans and financing, asset management and financial products.
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 and Standard & Poor respectively.
The controlling shareholder, Guotai Junan Securities Company Limited (Stock Code: 601211.SS; 2611.HK), is the comprehensive financial provider with a long-term, sustainable and overall leading position in the Chinese securities industry. Backed by strong operational support, the Company will be able to further explore the HK and the Asia-Pacific market, aiming to become an important financial institution with market influence in the region.
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