China's financial assets depreciation of 20 billion net profit fell 90% "Xinhua Rong" slimming focus on non-performing asset management

1comment 2019-04-15 10:55:00 source:Changjiang Business Daily Author:Wei Du The second beauty energy comes!

China Huarong (2799.HK), one of the four major asset management companies, has dived its business performance.

China Huarong (2799.HK), one of the four major asset management companies, has dived its business performance.

Changjiang Business Daily reporter passedannual reportIt was found that last year, China Huarong achieved operating income of 107.253 billion yuan, down 16.25% year-on-year. Net profit (net profit attributable to shareholders of the company) was only 1.576 billion yuan, down 92.84% from 2017.19 billion yuan, of which super The asset impairment of 20 billion yuan shocked the market.

According to public information, there are many Huarong industries in China, mainly involving non-performing assets, financial services, asset management, and investment. Last year, HuarongHuarong SecuritiesHuarong Investment, Huarong Trust, etc. were almost completely annihilated, and their performances also changed sharply.

What has attracted much attention is that after “the original chairman Lai Xiaomin fell into the storm”, China Huarong is focusing on Xinhua Rong – returning to the main business of non-performing asset management. Up to now, there have been 19 changes in the positions of senior executives in Huarong, which has promoted the slimming of institutions and the shrinking of assets. At present, the scale of the main business of non-performing asset management has shown signs of recovery.

Two performance warnings indicate risk

  Financial reportBefore the release, China Huarong issued two performance warnings. Although the market was psychologically prepared, its final disclosed operating results surprised the market.

Announcement shows that on August 12 last year, China Huarong released 2015H sharesThe first performance warning since the listing, it said that its net profit in the first half of the year is significantly lower than the same period last year. On February 21 this year, China Huarong again issued a performance warning. It is estimated that the Group's 2018 annual net profit will decrease by 90%-95% compared with 2017.

On March 28, China Huarong's 2018 annual performance report was released. It shows that last year's operating income was 107.253 billion yuan, down 16.25% from 2017's 128.07 billion yuan. In comparison, the net profit data was terrible, only 1.576 billion yuan, less than the previous year's 21.993 billion yuan, down 92.84%.

In response to such a dismal business performance, the company explained thatcapital marketDue to the large fluctuations, the valuation of some financial assets held by the company declined more. At the same time, non-financial subsidiaries have generated large losses attributable to shareholders of the company due to the contraction of non-main business, non-advantageous business, and market environment and credit risk exposure. In addition, due to the scale of financing, interest expenses increased significantly year-on-year.

Undoubtedly, China Huarong's performance is ugly or affected by the "Lai Xiaomin storm", which is evident from the company's huge asset impairment losses. Last year, the company's financial assets impairment losses of 17.298 billion yuan, other assets impairment losses of 2.769 billion yuan, a total of 20.067 billion yuan.

Last year, the company's interest expenses amounted to 64.098 billion yuan, an increase of 13.407 billion yuan from the 50.691 billion yuan in 2017.

The bleak performance is also closely related to the large-scale diving of the subsidiaries' performance. Last year, HuarongInternational financeHolding loss of 1.548 billion yuan, Huarong Securities net profit of 889 million yuan, HuarongConsumer financeThe net profit was RMB 0.12 billion, compared with RMB 105 million in the previous year, a significant drop of 88.57% year-on-year. The net profit of Huarong Trust was only 61 million yuan, compared with 892 million yuan in the previous year, a year-on-year decrease of 93.20%. In addition, Huarong's net profit also fell by 97% year-on-year.

It is worth mentioning that Huarong Trust. Huarong Trust, which had a mid-stream performance in 2017, fell directly to the bottom position last year, which stemmed from its frequent trampling.

last year,A-share marketIn the middle, Zhonghong retreated from the debt crisis, 35 financial institutions were involved, and 12 companies including Huarong TrustTrust companyInvolved in the expected debt of 6.841 billion yuan. In addition, the first share of A-share jadeOriental Golden Dragonfly(Quotes600086,Medical stockThe outbreak of the debt crisis was included in the list of people who were untrustworthy, and Huarong Trust was therefore lying down with funds of 150 million yuan.

19 executives changed their positions back to the main business

After the "Lai Xiaomin storm", China Huarong ushered in the new Huarong era with Wang Zhanfeng as its chairman - slimming and focusing.

On April 17, last year, Lai Xiaomin was investigated. used to beCentral bankWang Zhanfeng, who served as the party secretary and director of the Shanxi Banking Regulatory Bureau, took over as the secretary of the China Huarong Party Committee and took over the position of chairman in September last year.

In October last year, China Huarong official website published a press release on Wang Zhanfeng. Wang Zhanfeng stated that Huarong will give full play to the main force and main battlefield of the non-performing asset market in accordance with the transformational development path of “focusing on the main business and returning to the source”. Role, further strengthen the main business, give play to the multi-license synergy, and strive to achieve high-quality development.

In addition to Wang Zhanfeng, there are 19 executive positions in Huarong. Li Xin, former deputy secretary of the Eastern Assets Party Committee and chairman of the board of supervisors, was appointed as executive director and president of China Huarong.

After Lai Xiaomin was dismissed, Wang Huahua, vice president of China Huarong, Xiongqiugu and assistant to the president Yang Guobing resigned. In addition, there are personnel changes including the position of Chairman of Huarong Investment Board and Huarong Financial Controls.

On the road of rethinking and returning to the main source of the business, China Huarong has achieved certain results.

The annual report shows that China Huarong's main business mainly includes non-performing asset management, financial services, asset management and investment. Last year, the proportion of non-performing asset operating income increased further. The proportion of total revenue increased from 53.8% in 2017 to 60.4% in 2018. The pre-tax profit ratio increased by 159.2 percentage points from 55.4% in 2017 to 214.6 in 2018. %.

From 2014 to 2016, the income from non-performing assets business accounted for 56.1%, 53.9%, and 53.2%, respectively, and the pre-tax profit ratio was 55.7%, 53.7%, and 52.1%, respectively, which were decreasing year by year, which seems to indicate China Huarong has deviated from its main business to some extent.

In addition, as of the end of last year, China Huarong's capital adequacy ratio was 13.62%, better than 2017's 13.06%, and its ability to withstand risks increased.

Keyword reading:China Huarong

Editor in charge: Lu Shan RF10057
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