news

Interface News Reporter | Feng Saiqi

Recently, Dongwu Securities (601555.SH) disclosed its 2024 semi-annual report. During the reporting period, the company achieved revenue of 5.051 billion yuan, a year-on-year decrease of 5.38%; net profit attributable to shareholders of the parent company was 1.165 billion yuan, a year-on-year decrease of 16.12%. The company's operating costs were 3.534 billion yuan, a year-on-year increase of 0.40%.

Dongwu Securities explained that the company's revenue decline was mainly due to the year-on-year decline in wealth management and investment banking business income. The main reason for the increase in operating costs was that the investment transaction business cost increased by 16.01% year-on-year, and the asset management business cost increased by 12.17% year-on-year.

It is reported that the main businesses of the brokerage include wealth management, investment banking, investment trading, and asset management. The investment trading business contributed the most to the total revenue of Dongwu Securities in the first half of this year, which was 2.981 billion yuan. The investment banking business revenue was nearly halved in the first half of the year.

Specifically, the investment banking business achieved operating income of 364 million yuan in the first half of the year, a year-on-year decrease of 45.98%. In terms of equity, Dongwu Securities completed 2 IPO projects in the first half of the year; completed the application and acceptance of 4 projects by the Beijing Stock Exchange; completed the listing of 4 companies on the New Third Board and the application of 14 projects. In terms of bond financing business, a total of 197 credit bonds of various types were underwritten, with a total underwriting scale of 67.815 billion yuan.

Soochow Securities stated that in the second half of the year, the company's equity financing business will closely follow policy guidance, strictly perform professional review and continuous supervision duties, give full play to the advantages of the Beijing Stock Exchange's long-board business, and actively develop mergers and acquisitions and restructuring businesses.

Because it was suspected of failing to perform its due diligence in the underwriting of Gome Telecom and Zixun Pharmaceutical's private placement of stocks, in April this year, Soochow Securities announced that it had received a notice of filing a case from the China Securities Regulatory Commission. The China Securities Regulatory Commission stated that Soochow Securities failed to perform its due diligence in the aforementioned two underwriting projects and decided to file a case against it.

Judging from the IPO sponsorship of Soochow Securities this year, most of the projects were withdrawn. Among the three exchanges in Shanghai, Shenzhen and Beijing, Soochow Securities has updated the status of 16 projects, and the one that is progressing relatively smoothly is the Beijing Stock Exchange.

As of August 23, on the Beijing Stock Exchange, the latest status of the four IPO projects sponsored by Soochow Securities is "inquired"; the status of three IPO projects is "terminated"; the status of one IPO project is "suspended"; and one has been registered, which is Wuxi Dingbang Heat Exchange Equipment Co., Ltd.

It is worth mentioning that Soochow Securities ranks in an excellent position in the evaluation level of securities firms of the Beijing Stock Exchange. Recently, the Beijing Stock Exchange and the National Equities Exchange and Quotation Company released the evaluation results of the practice quality of securities firms in the second quarter of 2024. A total of 102 securities firms participated in the evaluation, of which 101 securities firms scored more than 100 points (inclusive). The top three securities firms were CITIC Construction Investment, Soochow Securities, and Kaiyuan Securities, with scores of 152.08, 142.92, and 126.69, respectively.

In the Shanghai and Shenzhen stock exchanges, all of Dongwu Securities' latest IPO projects this year have failed.

The Shanghai Stock Exchange disclosed that the IPOs of four companies sponsored by Soochow Securities were terminated one after another this year, namely Jiangsu Jianpai Agrochemical Co., Ltd. which received a termination letter, Kunshan Changying Hard Materials Technology Co., Ltd., Jiangsu Xin'an Electric Co., Ltd., and Jiangsu Sino-French Water Co., Ltd.

On August 21, the Shenzhen Stock Exchange disclosed that Suzhou Yadelin Co., Ltd., sponsored by Soochow Securities, voluntarily withdrew its application for listing on the Growth Enterprise Market, and its IPO was terminated. In addition, two companies sponsored by Soochow Securities also voluntarily bid farewell to listing on the Growth Enterprise Market this year, namely Suzhou Jieruis Intelligent Technology Co., Ltd. and Xiamen Meike Security Technology Co., Ltd.

The wealth management business of Soochow Securities also showed a downward trend, with revenue of 1.362 billion yuan in the first half of the year, a year-on-year decrease of 10.24%. As of the end of the reporting period, Soochow Securities opened 124,700 new accounts; the parent company's margin trading balance at the end of the period was 17.76 billion yuan, with a maintenance ratio of 244.24%.

Soochow Securities' investment and trading business and asset management business achieved year-on-year growth. In the first half of the year, Soochow Securities' investment and trading business achieved operating income of 2.981 billion yuan, a year-on-year increase of 2.36%. This sector mainly includes equity securities investment and trading, fixed income investment and trading, derivative financial product investment and trading, private equity investment, alternative investment, commodity trading and arbitrage, etc.

The asset management business achieved revenue of 200 million yuan, a year-on-year increase of 10.82%. As of the end of the reporting period, 28 new asset management products were launched, with a total asset management scale of 53.903 billion yuan, of which the proportion of active management scale continued to increase. Dongwu Securities said that in the second half of the year, the asset management business will deepen the bank cooperation business, actively explore the agency access opportunities of state-owned banks, and expand the scale of bank agency sales.

Among the subsidiaries actually controlled by Soochow Securities, the futures subsidiary Soochow Futures achieved the highest net profit of RMB 22.6699 million in the first half of the year. The net profit performance of the two overseas subsidiaries was poor in the first half of the year. Soochow Securities China-Singapore (Singapore) Co., Ltd. achieved a net profit of RMB 720,000 in the first half of the year. The net profit of Soochow Securities (Hong Kong) Financial Holdings Co., Ltd. was in a loss state, at RMB -41.1713 million.