CICC Announces 2018 Annual Results Net Profit Achieves RMB3.49 Billion Increases by 26.2% Year on Year

China International Capital Corporation Limited (“CICC” or “the Company”, Stock code: 3908. HK) announced its annual results for the twelve months ended December 31, 2018. In 2018, the Company recorded total revenue and other income of RMB18.54 billion; and profit (Note) of RMB3.49 billion; with a weighted average return on net assets of 8.8%. As at the end of 2018, the total assets of the Company amounted to RMB275.42 billion, representing an increase of 15.8% compared with the end of 2017; net assets (Note) amounted to RMB42.18 billion, representing an increase of 14.9% compared to the end of 2017.

In 2018, in the face of a challenging macro-economic environment and market conditions, CICC managed to cope well with new circumstances and changes on all fronts by leveraging its advantageous and strategic position and further strengthen its business capabilities, thanks to the support from staff at all levels. The Company was also able to improve its management and middle and back office functions. These efforts served to deliver results over and above industry average. On the whole, CICC delivered satisfactory results in serving its customers, contributing to the society and creating value for its shareholders. The Company also strived to play an active role in helping to prevent and resolve risks in the financial system and in fostering the Belt and Road Initiative.

 

Maintaining a Market Leading Position in Institutional Business

In 2018, in terms of the investment banking business, the franchise of CICC’s investment banking business was further enhanced, and the Company managed to gain new ground in strategic industries such as TMT, healthcare, high-end manufacturing and consumption and as a result further consolidated its leading franchise. In terms of the equities business, the Company upgraded its operation by riding the wave of institutionalisation, with a focus on products and cross-border capabilities, and the proportion of the overseas business income in the equities business exceeded 50% for the first time in 2018. In terms of the FICC business, the client business managed to sustain high growth and the asset securitization business achieved significant breakthroughs. The trading business continued to demonstrate excellent trading and risk control capabilities, and actively leveraged market opportunities to achieve sound returns. FICC also became an important market maker in both domestic and overseas markets. In terms of the asset management business, CICC further strengthened its core investment and research team, and achieved notable breakthrough in developing a macro asset allocation team. As a result, the Company was able to further streamline the investment decision-making process and build more vigor and discipline into the management system. These efforts allowed the Company to outperform the market in terms of investment performances. In terms of the private equity investment business, in 2018, CICC Capital launched a series of innovative products in the areas of regional funds, industrial cooperation funds, cross-border cooperation funds etc. These efforts served to expand the product mix and cover a wide range of strategic industries including new generation information technology, biomedicine, culture and consumption and high-end equipment manufacturing. As a result, the Company was able to continue to increase our AUM despite significant headwinds.

 

Steady Progress in the Transformation of Wealth Management Business

In 2018, CICC achieved meaningful progress in its integration with CISC in areas such as businesses, IT systems and middle and back offices. Both parties closely cooperated in four areas of the wealth management business, namely products, investment and research, training, and marketing, and developed effective coordination mechanisms and work procedures. The Company also continuously enhanced key capabilities in wealth management, and the Wealth Management Service Center (WSC) developed the capabilities in providing full-scope, one-stop solutions by integrating platform resources, and in particular devoted considerable efforts into macro asset allocation, products selection and wealth planning. Meanwhile, CICC had got ready for accelerating the expansion of the wealth management business. Taking note of domestic and overseas advanced practices, the Company established the Private Wealth Management (PWM) division so as to step up its transformation into a wealth management business model with wealth planning and asset allocation as its core. In line with the process of integration and transformation of wealth management, CICC officially launched Global Wealth Management System and continuously worked to diversify its online product and service offerings. The Company also commenced its study for developing a digital wealth management platform in order to further improve user experience and system function.

 

Paving the Foundation for Long-Term Growth through Institutional Development

In 2018, facing market fluctuations, tightening regulatory policies and business diversities and complexities, all middle and back offices proactively upgraded their capabilities and fulfilled their respective functions in control and support, and effectively safeguarded the smooth and orderly operation of our Group as well as guaranteed a smooth implementation of business plans. CICC officially formed the Asset and Liability Management Committee (ALCO) to unify decision-making in the management and deployment of the Group’s assets, capital, financing and other regulatory indicators, aiming to optimize balance sheet allocation efficiency and improve the ability of active liability management. Furthermore, CICC officially launched the Participating Managing Director (PMD) Program and identified the first batch of PMDs. This initiative aims to foster a partnership culture, enhancing medium- and long-term incentive and corporate culture. The Company organized regular communication, discussion and study events so as to build the PMD Program into an effective platform for key staff of our Group to share opinions, enhance communication and cooperation, and resolve major corporate issues, and into a key foundation of  our Group’s successor planning and talent pool development effort. At the same time, adhering to the corporate culture of “For the Nation”, the Company attached great importance to the fulfilment of social responsibilities, actively participated in the tough battle against poverty, and formulated the working ethics for poverty alleviation in practice, namely taking poverty alleviation through finance as the focus, poverty alleviation through education as the entry point and targeted poverty alleviation as the orientation.

 

Outlook

In 2019, while keeping on track with the overall corporate strategies, CICC intends to maintain prudent risk control and cost management, and improve business capabilities and institutional development. The Company is ready to adapt to all changes in circumstances while consolidating its resources allocation and realizing its potentials, in order to capture new opportunities amid varying conditions and accelerate its own transformation, to attain the goal of becoming one of the world’s leading investment banks, lay down a concrete foundation for the long term development of the Company, and thus create greater value for all clients and shareholders.

 

Note: Net profit refers to profit for the year attributable to the shareholders of the Company and holders of other equity instruments; net assets refer to total equity attribute to the shareholders of the Company and holders of other equity instruments.