Source: China Economic Network
China Economic Network Beijing, September 2, Dongxing Securities (601198. SH) recently disclosed its 2021 semi-annual report. During the reporting period, Dongxing Securities achieved operating income of 2.579 billion yuan, an increase of 2.14% year-on-year; net profit attributable to shareholders of the parent company of 731 million yuan, down 7.06% year-on-year; net profit attributable to shareholders of the parent company of 726 million yuan, down 8.05% year-on-year; net cash flow from operating activities of 3.639 billion yuan, compared with -1.194 billion yuan in the same period last year.
In the first half of 2021, the basic earnings per share of Dongxing Securities was 0.265 yuan per share, down 7.02% year-on-year; the weighted average return on net assets was 3.40%, a decrease of 0.42 percentage points from the same period last year.
As of June 30, 2021, the total assets of Dongxing Securities were 90.986 billion yuan, an increase of 5.34% year-on-year; the total liabilities were 69.538 billion yuan, an increase of 6.67% year-on-year; the asset-liability ratio was 71.11%, up 1.18 percentage points from the end of the previous year; the current ratio was 1.60, down 11.11 percentage points from the end of the previous year; and the quick ratio was 1.60, 11.11 percentage points less than the end of the previous year.
Dongxing Securities business is mainly divided into five branches, wealth management business, proprietary business, investment banking business, asset management business and other businesses.
In terms of business, during the reporting period, the operating income of the wealth management business of Dongxing Securities was 1.014 billion yuan, an increase of 22.99% year-on-year, accounting for 39.31 percentage points in the operating income, and the gross profit margin was 48.99%, an increase of 15.10 percentage points over the same period of the previous year; the operating income of the proprietary business was 251 million yuan, down 64.45% year-on-year, accounting for 9.72 percentage points in the operating income, and the gross profit margin was 57.13%. The operating income of investment banking business was 283 million yuan, down 1.03% year-on-year, accounting for 10.98 percentage points in operating income, and the gross profit margin was 35.29%, an increase of 8.91 percentage points over the same period of the previous year; the operating income of asset management business was 100 million yuan, down 56.49% year-on-year, accounting for 3.90 percentage points in operating income, with a gross profit margin of 2.61%. Compared with the same period of the previous year, it decreased by 44.01 percentage points; the operating income of other businesses was 931 million yuan, an increase of 94.42% year-on-year, accounting for 36.09 percentage points in the operating income, and the gross profit margin was 13.46%, an increase of 18.08 percentage points over the same period of the previous year.
According to the statistics of the Securities Industry Association, Dongxing Securities achieved a net income of investment banking business of 397 million yuan in the first half of 2021, an increase of 29.18% year-on-year; securities underwriting and sponsorship income of 322 million yuan, an increase of 21.60% year-on-year, ranking 21st in the industry; and a net income of 0.76 billion yuan in financial consulting business, an increase of 75.55% year-on-year.
As of June 30, 2021, according to the statistics of Wonder Information (issue date), the number of lead underwriters of equity projects (including selected layers) completed by Dongxing Securities was 11, including 6 IPO projects, and the number of main underwriters of bonds (corporate bonds, corporate bonds and financial bonds) was 37, with a financing scale of 20.522 billion yuan, down 2.48% from the same period in 2020.
In the first half of 2021, the credit impairment loss of Dongxing Securities was 22.8046 million yuan, compared with 40.9781 million yuan in the same period of the previous year, a decrease of 44.35% over the same period of the previous year, mainly due to the decrease in the credit impairment loss of financial assets measured at amortized cost.
As of June 30, 2021, the compensation payable by Dongxing Securities was 1.152 billion yuan, and the compensation payable to employees at the end of 2020 was 1.089 billion yuan.
In the first half of 2021, dongxing securities paid 619 million yuan in cash to and for employees, compared with 811 million yuan in the same period last year, down 23.67% year-on-year.
According to the calculation of the reporter of China Economic Network, in the first half of 2021, the total compensation and benefits of employees of Dongxing Securities were 682 million yuan, compared with 811 million yuan in the same period last year, down 15.91% year-on-year.
According to the results of the 2021 classification of securities companies released by the China Securities Regulatory Commission on July 23, 2021, the rating of Dongxing Securities is A, which is unchanged from the rating of 2020.
According to the Provisions on the Classification and Supervision of Securities Companies, securities companies are divided into 11 levels in 5 categories, including A (AAA, AA, A), B (BBB, BB, B), C (CCC, CC, C), D, E, etc. The companies at each level in the three categories of A, B and C are normal operating companies, and the division of their categories and levels only reflects the relative level of the company's business activities in the industry and its risk management capabilities and compliance management levels. Category D and E companies are companies whose potential risks may exceed the scope of the company's tolerance and which have been subject to risk disposal measures in accordance with the law due to the occurrence of major risks.
According to the semi-annual report, during the reporting period, Dongxing Securities' litigation and arbitration matters have been disclosed in the interim announcement and there are no follow-up progress in a total of 15 matters.
During the reporting period, the litigation and arbitration situations that were not disclosed in the interim announcement of Dongxing Securities or had subsequent progress were as follows:
On November 13, 2014, Spacebus Group Co., Ltd. (hereinafter referred to as "Spacebus"), which was recommended and listed by Dongxing Securities, was publicly transferred in the national small and medium-sized enterprise share transfer system. In July 2015, plaintiff Shen Feng subscribed to the targeted issuance of 1.8 million shares of Spacebus, with an amount of 6.03 million yuan. In October 2015, Spacebus intended to carry out a major asset restructuring, and without the approval of the China Securities Regulatory Commission, Spacebus paid 5 million yuan (later withdrawn 300,000 yuan) to Wang Enquan, the former actual controller of Spacebus (now serving a sentence), and actually paid 4.7 million yuan, while the plaintiff Shen Feng purchased 25,000 shares of Spacebus shares through the secondary market, with a total purchase price and transaction costs of 103,700 yuan. In view of the above expenses, the plaintiff Shen Feng filed a joint lawsuit against the five defendants on the grounds that there were false records, misleading statements and material omissions in the application documents recommended by Spacebus and the application documents for the targeted offering, and requested the court to order the defendant Spacebus to compensate the plaintiff for investment losses of RMB10,731,328 and interest, and the defendants Dongxing Securities, Beijing Dacheng Law Firm, Grant Thornton Certified Public Accountants (Special General Partnership) and Liaoning Zhonghua Asset Appraisal Co., Ltd. were jointly and severally liable for the above losses.
On October 10, 2017, plaintiff Fei Xiaohong filed a joint lawsuit against Timebus, Dongxing Securities, Beijing Dacheng Law Firm, Grant Thornton Certified Public Accountants (Special General Partnership) and Liaoning Zhonghua Asset Appraisal Co., Ltd. against The Dalian Intermediate People's Court on the grounds that there were false records, misleading statements and material omissions in the application documents recommended by Spacebus and the application documents for the targeted offering.
On November 13, 2014, the time traveler recommended and listed by Dongxing Securities was publicly transferred in the national small and medium-sized enterprise share transfer system. In July 2015, the plaintiff, Zhou Yunbo, subscribed for 1.5 million shares of space-time passengers for a targeted issuance of shares, amounting to 5.025 million yuan. In October 2015, Spacebus proposed to conduct a major asset restructuring and pay RMB7 million for the subscription of shares to Wang Enquan, the former actual controller of Spacebus (who is currently serving a sentence) without the approval of the China Securities Regulatory Commission. At the same time, the plaintiff, Zhou Yunbo, purchased spacebus shares through the secondary market. In view of the above expenses, the plaintiff, Zhou Yunbo, filed a joint lawsuit against the five defendants on the grounds that there were false records, misleading statements and material omissions in the application documents recommended by Spacebus and the application documents for the directional offering, and requested the court to order Spacetimer to compensate the plaintiff for the principal amount of the subscribed shares of RMB16,196,580 and the loss of interest, and the defendants Dongxing Securities, Beijing Dacheng Law Firm, Grant Thornton Certified Public Accountants (Special General Partnership) and Liaoning Zhonghua Asset Appraisal Co., Ltd. were jointly and severally liable for the above losses.
The Company and Liu Guang conducted a share pledge repurchase transaction in 2017, and Liu Guang pledged the shares of Orient Net Power held by him to the Company, incorporating the principal amount of RMB150 million, and repaying the principal amount of RMB0.22 billion in 2018. In 2019, due to the decline in the stock price of Oriental Net Force, the performance guarantee ratio was lower than the minimum performance guarantee ratio, and Liu Guang did not make up the position to the early warning line in full as agreed, which constituted a breach of contract. The Company filed a lawsuit with the Futian District People's Court of Shenzhen City, requesting the court to grant permission to auction and sell 34,306,616 shares of Oriental Net Power held by Liu Guang, and the Company would be reimbursed in priority for the proceeds.
On July 24, 2012, defendant Lu Yuting signed the Margin Business Contract with the Company for margin trading with Dongxing Securities Co., Ltd. In the transaction, the defendant's margin account opened by the plaintiff appeared to maintain the guarantee ratio below the liquidation line and did not add collateral or settle the liabilities as scheduled, and the defendant still had unpaid liabilities of 65,443.28 yuan after the company's compulsory liquidation, and after repeated reminders by the company, the defendant had not yet paid off the remaining liabilities.
On March 29, 2013, defendant Su Shengyu signed the "Dongxing Securities Co., Ltd. Margin Business Contract" with the Company to conduct margin trading. In the transaction, the defendant's margin account opened by the plaintiff appeared to maintain the guarantee ratio below the liquidation line and did not add collateral or settle the liabilities as scheduled, and the defendant still had unpaid liabilities of 13,614.85 yuan after the company's compulsory liquidation, and after repeated reminders by the company, the defendant had not yet paid off the remaining liabilities.
On February 27, 2015, defendant Wang Haoyu signed the Margin Business Contract with the Company for margin trading with Dongxing Securities Co., Ltd. In the transaction, the defendant's margin account opened by the plaintiff appeared to maintain the guarantee ratio below the liquidation line and did not add collateral or settle the liabilities as scheduled, and the defendant still had unpaid liabilities of 75,780.52 yuan after the company's compulsory liquidation, and after repeated reminders by the company, the defendant had not yet paid off the remaining liabilities.
On January 7, 2015, defendant Zou Wenwu signed the "Dongxing Securities Co., Ltd. Margin Business Contract" with the Company to conduct margin trading. In the transaction, the defendant's margin account opened at the plaintiff's place maintained the guarantee ratio below the closing line and did not add collateral or settle the liabilities as scheduled, and the defendant still had unpaid liabilities of 182,272.03 yuan after the company's compulsory liquidation, and after repeated reminders by the company, the defendant had not yet paid off the remaining liabilities.
On April 8, 2013, defendant Lin Xiaozong signed the Margin Business Contract with the Company for margin trading of Dongxing Securities Co., Ltd. In the transaction, the defendant's margin account opened at the plaintiff's place was maintained that the guarantee ratio was lower than the closing line and the collateral or liabilities were not added as scheduled, and the defendant still had unpaid liabilities of 909,032.82 yuan after the company's compulsory liquidation, and after repeated reminders by the company, the defendant had not yet paid off the remaining liabilities.
On January 16, 2015, defendant Jin Zhihong signed the Margin Business Contract with the Company for margin trading with Dongxing Securities Co., Ltd. In the transaction, the defendant's margin account opened at the plaintiff's place was maintained in a situation where the guarantee ratio was lower than the closing line and the collateral or liabilities were not added as scheduled, and the defendant still had unliquidated liabilities of 188,876.59 yuan after the company's compulsory liquidation, and after repeated reminders by the company, the defendant had not yet paid off the remaining liabilities.
On August 6, 2012, defendant Jiang Zhiqiang signed the "Dongxing Securities Co., Ltd. Margin Business Contract" with the Company to conduct margin trading. In the transaction, the defendant's margin account opened at the plaintiff's place maintained the guarantee ratio below the liquidation line and did not add collateral or settle the liabilities as scheduled, and the defendant still had unpaid liabilities of 156,913.63 yuan after the company's compulsory liquidation, and after repeated reminders by the company, the defendant had not yet paid off the remaining liabilities.
On June 26, 2012, defendant Li Youlan signed the Margin Business Contract with the Company for margin trading with Dongxing Securities Co., Ltd. In the transaction, the defendant's margin account opened by the plaintiff appeared to maintain the guarantee ratio below the closing line and did not add collateral or settle the liabilities as scheduled, and the defendant still had unpaid liabilities of 38,937.81 yuan after the company's compulsory liquidation, and after repeated reminders by the company, the defendant had not yet paid off the remaining liabilities.
On February 28, 2013, the defendant, Jinkun, signed the "Dongxing Securities Co., Ltd. Margin Business Contract" with the Company to conduct margin trading. In the transaction, the defendant's margin account opened at the plaintiff's place was maintained in a situation where the guarantee ratio was lower than the closing line and the collateral or liabilities were not added as scheduled, and the defendant still had unpaid liabilities of 3,459.11 yuan after the company's compulsory liquidation, and after repeated reminders by the company, the defendant had not yet paid off the remaining liabilities.
On April 2, 2013, defendant Deng Youmei signed the "Financing Margin Business Contract of Dongxing Securities Co., Ltd." with the Company to conduct margin trading. In the transaction, the defendant's margin account opened at the plaintiff's place was maintained in a situation where the guarantee ratio was lower than the closing line and the collateral or liabilities were not added as scheduled, and the defendant still had unpaid liabilities of 183,416.69 yuan after the company's compulsory liquidation, and after repeated reminders by the company, the defendant had not yet paid off the remaining liabilities.
On December 19, 2012, defendant Chen Lianjun signed the Margin Business Contract with the Company for margin trading with Dongxing Securities Co., Ltd. In the transaction, the defendant's margin account opened by the plaintiff appeared to maintain the guarantee ratio below the closing line and did not add collateral or settle the liabilities as scheduled, and the defendant still had unpaid liabilities of 281,606.80 yuan after the company's compulsory liquidation, and after repeated reminders by the company, the defendant had not yet paid off the remaining liabilities.
On August 14, 2014, defendant Lin Lili signed the Margin Business Contract with the Company for margin trading with Dongxing Securities Co., Ltd. In the transaction, the defendant's margin account opened by the plaintiff appeared to maintain the guarantee ratio below the liquidation line and did not add collateral or settle the liabilities as scheduled, and the defendant still had unpaid liabilities of 1,783,144.48 yuan after the company's compulsory liquidation, and after repeated reminders by the company, the defendant had not yet paid off the remaining liabilities.
On June 8, 2016, defendant Guo Yun signed the "Dongxing Securities Co., Ltd. Margin Business Contract" with the Company to conduct margin trading. In the transaction, the defendant's margin account opened by the plaintiff appeared to maintain the guarantee ratio below the closing line and did not add collateral or settle the liabilities as scheduled, and the defendant still had unpaid liabilities of 1,670,292.80 yuan after the company's compulsory liquidation, and after repeated reminders by the company, the defendant had not yet paid off the remaining liabilities.
On December 9, 2016, the Company and Tahoe Investment Group Co., Ltd. entered into a share pledge repurchase transaction, in which the asset management plan managed by the plaintiff paid the defendant a total of RMB400,000,000 in the initial transaction amount, and the defendant, Taihe Investment Group Co., Ltd., pledged its shares in Tahoe Group (stock code: 000732) to the Company. The defendant's failure to repurchase the loan as agreed and triggering a number of breaches of contract constituted a breach of contract.
On November 10, 2016, the Company and Tahoe Investment Group Co., Ltd. launched a share pledge repurchase transaction, and the asset management plan managed by the plaintiff paid the defendant a total of RMB300,000,000 in the initial transaction amount, and the defendant, Taihe Investment Group Co., Ltd., pledged its shares in Tahoe Group (stock code: 000732) to the Company. The defendant's failure to repurchase the loan as agreed and triggering a number of breaches of contract constituted a breach of contract.