Friday, March 29, 2024
 
Columnist
Martin Hennecke
 
TANRICH
HKEx Stock Code : 00812 
 
Corporate Profile
Principally engaged in wealth management, brokerage and margin financing, insurance agency, corporate finance, asset management, money lending and proprietary trading.

Business Review - For the year ended June 30, 2012

Wealth management, brokerage and margin financing

Unresolved European debt crisis and ineffective ¡§loose monetary policy¡¨ in China, the investor sentiment remained weak despite gradual pick-up of the Hang Seng Index. During the financial year ended 30 June 2012, the average daily turnover of Hong Kong securities market was HK$61.2 billion compared to HK$73.4 billion in the corresponding period of last year, representing a decrease of 16.6%.

Owing to the pessimistic market sentiment, the turnover generated from the wealth management, brokerage and margin financing decreased to HK$52.9 million (2011: HK$59.8 million) during the reporting period. The drastic downturn of securities broking and margin financing business was mainly attributable to the decreasing turnover of Hong Kong securities market as a result of investors' conservative attitude. Therefore, income derived from securities broking and margin financing decreased sharply.

However, with a further strengthened MPF, unit trusts and insurance-linked products intermediary services by wealth management team, the Group recorded a substantial growth of 67.2% in the business of wealth management during the period. Occupying merely 18.7% in segment turnover, the increase in the business of wealth management was offset by the decrease in the business of brokerage and margin financing. It is expected that this division will continue to bring in additional contribution to the Group in the coming year(s) in line with the implementation of the Employee Choice Arrangement (¡§ECA¡¨).

Insurance broking

The complexity and volatility of general economy and financial environment had a negative impact on investment returns and investor sentiment. The business of insurance broking cannot be an exception, with life insurance being its major source of income. While income generated from life insurance experienced a considerable drop, the overall turnover generated from insurance broking was adversely affected, slipping 67.6% to HK$6.6 million (2011: HK$20.2 million).

In view of expanding insurance broking business in Mainland China, the Group is applying for setting up insurance broking company in the Mainland through ¡§Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA)¡¨. While maintaining close relationship with business partners and exploring new cooperating opportunities, the insurance team is dedicated to provide comprehensive product and service offerings to attract a wider range of clientele.

Corporate finance

Despite global market slump, the efforts of corporate finance team started to take effect. While initial public offering activities (¡§IPO¡¨) and other equity fund raising exercises including underwriting activities began to restore energy, income derived from being appointed as financial advisers, placing agents and sponsors recorded a considerable increase. During the current financial year, segment turnover increased to HK$11.4 million (2011: HK$6.3 million) by 81.2%.

The group is optimistic to the prospect of corporate finance business and believes that fund raising exercises in the capital market will be even more active with more IPOs and placing activities and this division will bring a greater profit in the coming period.

Asset management

During the reporting period, the segment loss decreased to HK$2 million (2011: HK$3.9 million) by 49.3%. Given that this division is still in the developing stage, it has been strengthening its team and maintaining close business relationship with fund managers. The team is also actively exploring and identifying new business opportunities. Supplementing to other divisions in the Group, synergy and revenue are expected to be created.

The Group believes that this division will make considerable contribution in the foreseeable future by further expanding its realm of asset management business and enhancing its income generating ability.

Proprietary trading

Proprietary trading business was severely struck by financial turmoil that proprietary trading business recorded a loss of HK$5.4 million for the reporting period (2011: Profit of HK$22.1 million). Such loss during the period was mainly attributable to the high volatility of the securities and futures market.

Business Outlook - For the year ended June 30, 2012

While challenging times still lay ahead, the Group is confident that the financial markets will stabilize gradually with the launch of a third round of quantitative easing (QE3). Coupled with over 20 years of solid experience and foresighted management team, the Group is undergoing a gradual adjustment on business strategy and believes that it can overcome all challenges and turn unfavorable conditions to our advantages.

The Group will adopt strategies that can deliver sustainable long-term growth. The Group will also strive to expand business, explore business opportunities and expand its corporate and retail clientele, hence further increasing its market share, maintaining competitive edges and achieving steady business growth.

To keep abreast with the market trend, the Group launched a mobile trading platform and refined its existing electronic trading platform so as to provide valued-added services to the existing clients and broaden the client base. Clients thus can trade Hong Kong stocks through iPhone, iPad and Android.

Dedicated to develop financing market in Mainland China, the Group collaborated with Guangdong & Hongkong Investment and Financing Service Centre to assist smallmedium enterprises in Mainland China to be listed in Hong Kong, with a significant contribution expected to be made by this cooperation. Furthermore, the Group will continue to explore and identify suitable business partners and participate in more exhibitions and seminars in China to enhance the Group's image.

Given that the increasing number of Mainland investors putting money into overseas market, the Group will expand its investment immigration business as well as seize the opportunities from this growing group of customers by introducing England Investment Immigration in addition to the existing Hong Kong Capital Investment Entrant Scheme and United States Employment Based Fifth Preference so as to provide a diversified choices to the customers.

Looking ahead, the Group will continue to adopt a flexible while prudent business strategy, strengthen our risk management and dedicate more resources, aiming to expand business, enhance the profitability as well as to consolidate market position to achieve sustainable long-term growth and become a ¡§Financial Supermart- Regional I-Bank¡¨.

Source: Tanrich Fin (00812) Annual Results Announcement
Chairman Yip Man Fan Issued Capital (shares) 1,191M
Par Value HKD 0.1 Market Capitalisation (HKD) 411M
 
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