Closer economic and trade development between Hong Kong and Mainland China in recent years has prompted many mainland securities companies to build a global presence through the financial hub of Hong Kong.

Huatai International Financial Holdings Company Limited (Huatai International) was among the first movers and it is now one of the largest mainland securities firm in Hong Kong by asset. It reported nearly HK$2 billion (US$255 million) in profit last year.

Domestic success story

This came despite the COVID-19 pandemic, geopolitical tensions, inflationary pressure and soaring energy prices putting markets worldwide under stress last year. Initial public offerings (IPO) in Hong Kong dropped 68% year-on-year to HK$104.6 billion.

After several years of establishing themselves in Hong Kong markets, mainland securities firms now compete on equal terms with foreign investment banks in Hong Kong capital markets. Huatai International is using Hong Kong as a base to venture abroad. In its annual report for last year, Huatai Securities reported that Huatai International’s revenue surpassed HK$10 billion, at HK$10.9 billion, and its net profit was HK$1.96 billion. The annual report also showed the group invested about 2.7 billion yuan (US$390 million) in information technology, up 22% year on year.

Two-pronged strategy

Huatai International is the only mainland securities firm in Hong Kong that  expanded assets, revenue  and net profit last year. Huatai Securities’ CEO Mr Zhou Yi told the results conference that the company’s “two-pronged core strategy” focused on both wealth management and institutional business, empowered by technology, enabled its international business to achieve exceptional performance last year despite uncertainties in the global economy.

Huatai International’s assets have grown 10-fold in Hong Kong in the past six years. Its technology permits effective risk assessment, giving a chance to seize opportunities in fluctuating markets.

As environmental, social and governance (ESG) issues gain traction, Huatai International is actively helping clients pursue sustainable development. It’s one of the first batch of participants in Core Climate, Hong Kong’s new international carbon marketplace, to complete the settlement for the trading of international voluntary carbon credits in both yuan and Hong Kong dollar.

Cross-border business boost

Huatai International established a Singapore subsidiary last year and took part in the Korean structured product market, becoming one of the first mainland securities firms to enter the Korean market. The Singapore business will let Huatai International use Hong Kong as its platform to engage with multiple financial centres around the world.

Mr Zhou said: “Last year, the cross-border institutional business had significant market advantages and continued to provide cross-border asset allocation services featuring integration and diversification for northbound and southbound customers. We will strive to achieve multi-market coverage in the mainland, Hong Kong, London, Singapore and the United States. Following the establishment of the Singapore subsidiary, we have further breakthroughs in our international presence. In the future, we will continue to actively participate in interconnection and deepen our roles in key international markets and regions with a view to better serve high-level opening up.”

New investment experiences

Huatai International focuses on I&T to empower all aspects of business. The ZhangLe Global (ZL Global) mobile app launched earlier (main picture) is a good example.

As a tech-enabled customer-focused investment platform, ZL Global matches investment products with customer risk tolerance, investment preferences and other factors to broaden customers’ choices. The app had attracted more than 1 million registered users by the end of last year. The popular automatic cash management service Cash Pro, launched in the app last year, gives customers interest income on every trading day from investing in associated funds. It provides investors with safe and highly liquid investment options in a turbulent market.

Partnership with small brokerages

Rapid growth in online trading platforms and the COVID-19 pandemic cut revenue for Hong Kong’s traditional small and medium-sized securities firms. The Stock Exchange of Hong Kong said 47 local brokerages closed last year, a new high after 17 shut in 2021, 37 in 2020 and 22 in 2019.

Huatai International opened its online platform last year to empower smaller brokerages through cooperation in technology, products and services, giving their customers direct experience to lower transaction costs and higher trading efficiency.

HKTDC allies with Huatai International 

The Hong Kong Trade Development Council (HKTDC) and Huatai International have unveiled a strategic partnership to jointly promote the national Dual Circulation Strategy and highlight Hong Kong as a platform for facilitating deal-making.

The partnership aims to help mainland enterprises go global while attracting foreign investment into domestic markets, such as the Guangdong-Hong Kong-Macao Greater Bay Area (GBA); reinforce and promote Hong Kong as an effective platform for mainland enterprises to invest overseas; and create strong synergy through the integration of the two parties’ business platforms as well as investor and resource networks.

Huatai will join business matching activities organised by the HKTDC on the mainland. These activities include financial services or cross-border investment missions, fundraising roundtables and Hong Kong Team missions.