Everbright Securities announced that the company made a net profit of 3.501 billion yuan in 2021, an increase of 50% year-on-year.
On the evening of January 20, Everbright Securities issued an announcement that in 2021, the company made asset impairment provisions and estimated liabilities of RMB1.128 billion, reduced the total profit of 2021 by RMB1.128 billion and the net profit by RMB1.028 billion. The provision includes receivables (including other receivables), funds raised, financial lease receivables, debt investments (reversals), purchases and resales of financial assets (reversals), estimated liabilities, other debt investments and commodity inventories, of which the estimated liabilities for MPS matters are RMB733 million.
At the same time, Everbright Securities expects operating income of RMB16.705 billion in 2021, an increase of 5% over the previous year, and net profit attributable to shareholders of the parent company of RMB3.501 billion, an increase of 50% over the previous year.
Why are MPS projects reaccused?
From 2018 to 2020, the company has accrued 1.4 billion yuan, 1.611 billion yuan and 1.55 billion yuan for the project for three consecutive years, and another 730 million yuan in 2021. That is, for this project, it has been accrued for 4 consecutive years.
According to the announcement, the company made an announcement on the MPS matters and related progress involved in Everbright Capital Investment Co., Ltd. (hereinafter referred to as Everbright Capital) and its subsidiaries in the early stage. In 2021, in accordance with Accounting Standard for Business Enterprises No. 13 - Contingencies, Everbright Capital made an estimated liability of RMB733 million for this matter based on the principle of prudence, taking into account the progress of THE MPS matters, the relevant litigation and arbitration judgments involving Everbright Capital and its subsidiaries, and the corresponding payment obligations to be assumed according to the judgment results.
According to the previous announcements of Everbright Securities, the judgment result of China Merchants Bank v. Everbright Capital was that Everbright Capital paid RMB3.116 billion and interest losses from May 6, 2019 to the date of actual settlement, and part of the litigation costs, property preservation fees and other expenses.
The judgment in the case of Huarui Bank v. Everbright Capital was that Everbright Capital paid huarui Bank an investment principal of RMB400 million and the investment income from January 1, 2018 to the date of actual performance, and to bear litigation costs, preservation fees, etc.
The arbitration result of Shenzhen Hengxiang and Everbright Immersion was to pay Shenzhen Hengxiang RMB150 million and corresponding income, lawyers' fees, arbitration fees, etc., and the first-instance judgment was rendered in the case of Zhaoyuan Yongjin v. Everbright Capital, and Everbright Capital was ordered to compensate 30% of the principal amount of The investment of Zhaoyuan Yongjin.
Judging from the relevant litigation and arbitration judgments involved in Everbright Capital and its subsidiaries above, it is not difficult to understand that the "obligation to bear the corresponding payment" referred to in the announcement may include the corresponding investment income, interest loss and costs incurred in litigation and arbitration mentioned in the litigation arbitration.
On January 18 this year, there were new developments in the MPS matter, and Everbright Securities announced that Everbright Capital submitted an application for retrial to the Shanghai Higher People's Court for litigation related to other contract disputes with China Merchants Bank and Huarui Bank.
At present, Everbright Capital has received the Notice of Acceptance of Civil Application for Retrial in the Shanghai Higher People's Court for the above two cases, and the Shanghai Higher People's Court has decided to file a case review of everbright Capital's retrial application, and the final review result is still uncertain. It can be inferred from this that the litigation between Everbright Capital and China Merchants Bank and Huarui Bank has not yet executed the judgment result, so that the contingent interest that has not yet been paid will continue to increase. On the whole, we can understand the specific reasons for the re-accrual.
In addition, the announcement shows that Everbright Securities will assess the impact on the company according to the progress of MPS matters, and fulfill its information disclosure obligations in accordance with relevant laws and regulations. Does the retrial imply a positive turnaround?
Expected net profit to grow by 50% in 2021
On the same day, Everbright Securities issued the "2021 Annual Results Pre-increase Announcement", in 2021, the company's operating income was RMB16.705 billion, an increase of 5% over the previous year, and the net profit attributable to the shareholders of the parent company was RMB3.501 billion, an increase of 50% over the previous year. The increase in performance was mainly due to the increase in the company's wealth management business income, institutional business income, bond underwriting and trading business income during the reporting period compared with the same period of the previous year, and asset impairment losses and projected liabilities decreased significantly compared with the previous year.
MPS has been haunting Everbright Securities for many years, for whether it has an impact on the company's development, yan Jun, secretary of the party committee and chairman of the board of directors of the company, said that the company resolutely implements the requirements of the party Central Committee to "be steady and steady", adheres to the duty of the real economy of financial services, actively implements the national strategy, actively resolves risk events, and conscientiously fulfills its own political, economic and social responsibilities. In 2021, the company strengthened its strategic guidance, returned to the origin of its business, continuously deepened the reform of institutional mechanisms, implemented value orientation, accelerated transformation and upgrading, continued to strengthen and improve the construction of risk control compliance system, and achieved steady and progressive reform and development results. In the future, the company will be more determined and pace of development, take the initiative to integrate into the new development pattern, and achieve high-quality development.
Although affected by the MPS incident, from the perspective of business conditions in recent years, Everbright Securities has emphasized intensive management and coordinated development, showing a good trend, and its performance is rapidly returning to normal and continuing to grow. From 2019 to 2021, the annual operating income of Everbright Securities reached more than 10 billion yuan and maintained a good growth rate, with revenue increasing by 30.41%, 58% and 5% respectively compared with the previous year. In terms of net profit attributable to the mother, Everbright Securities was 568 million yuan, 2.334 billion yuan and 3.501 billion yuan from 2019 to 2021, with a year-on-year increase of 449.68%, 311% and 50% respectively.
Editor-in-charge: Luo Xiaoxia