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Being Generous to Investors and Digging Deep into Real Economy are the Two Features of Central China Securities
- Henan Province Standing Committee of the National People's Congress, Chairman of Central China Securities JIAN Mingjun responded to reporters
HONG KONG, Sep 02, 2015 - (ACN Newswire) - China and Hong Kong stock markets experienced high volatility recently with many stocks dropped massively, whereas the performance of Central China Securities, which was listed in Hong Kong last June and completed its new share issuance in early August this year, remained strong. The stock recorded a 4.9% jump as compared to the general selloff across the board on August 31. What so special about Central China securities to make it being widely recognized by market and investors despite the market downturn? Reporters interviewed Henan Province Standing Committee of the National People's Congress, Chairman of Central China Securities JIAN Mingjun to find out.
Feature no.1: Being generous to investors by distributing high cash dividends twice a year
Reporter: Market became very volatile these days, investors are very concern about market stability, what's your view on this?
JIAN Mingjun: Stability is the proposition for market prosperity. To maintain stability in capital markets, to foster the virtuous cycle of financial ecosystem and to push forward the healthy development of the real economy, each listed company has to take up its part and fulfill its responsibilities with trust and being practical. From Central China Securities' perspective, we have loads of things to work on, but among which there are two important things we need to do particularly right: one is to distribute high cash dividend to investors twice a year based on the significant growth in operating results and large amount of undistributed profits. Second thing is to stay firm with the financial service quality for real economy in order to promote the economic development and realize self-growth.
Reporter: Central China Securities just released its interim report, profits up five times with HKD 0.2545 dividend per share, investors are very excited about this and is that the key reason why your shares out-beat the market?
JIAN Mingjun: I believe stock market is where people invest for value instead of making speculative investments. Revenue from stocks investments mainly derived from the dividends and special dividends from listed companies, instead of the rise and fall of stock prices. And revenue from stocks investments is highly correlated to the profitability and judgmental abilities of the listed companies, instead of the vague concepts or stories behind, especially when the stocks market is volatile, ensuring investors enjoying high cash dividends becomes very important and pragmatic.
When our Group's Secretary of the Board Mr. Xu Haijun led the team to Hong Kong and Singapore for the interim results announcement and roadshow not long ago, he clearly announced that dividend per share for the first half of the year is approximately HKD 0.2545 and return on interim dividend is up to approximately 6% and it will be paid out in late October or early November of this year. While the dividend for the second half of the year will be paid out in May next year and maintained in a high payout ratio. Therefore, the ROI for investor for the whole year can reach very high levels. Cash dividends will still be taken place twice a year in next year in order to generously reward our investors. I have been thinking, with our wholehearted sincerity and generous rewards towards investors, do we still matter the short term ups and downs of stock price? Not to mention, we believe investors are intelligent and rational, and will believe the inner logical relations between the performance on stock price and the level of dividend payout ratio. The better the results of the Group, the better the return to investors. It is strange if the company stock price is not performing good!
Reporter: When the market is in panic, most investors are still rational, you must have a deep feeling on this.
JIAN Mingjun: Looking back to last June, it was a very difficult time when we just came for listing in Hong Kong. The stock price had been tumbled below issuing price for two months. Dealing with that situation, we did not put the blame on others but work strenuously on our own. All of our staff worked with their greatest creativity and faith in order to grow the business of the Company. As a result, the dividend payout ratio was substantially increased and was ranked by Hong Kong well-known Etnet.com as "The Stock With The Biggest Increase" among all new listed stocks in last year. It is the fairest judgment to us from the respectful Hong Kong market and the majority of investors
Old memories fades, what happened last year is still vivid in mind. To work harder and deliver better results and dividends than last year are the only things we can do in order to live up to the trust and expectation of investors from Hong Kong and overseas markets. All the above is our true confession without a trace of hypocrisy.
Feature no.2: Digging deep into real economy is another feature of Central China Securities
Reporter: Comparing to the importance of the business performance of securities firms, the market also emphasizes on the future growth potential of listed securities firms. You have just talked about the real economy, would you elaborate more on the latest development of this part?
JIAN Mingjun: Our irreplaceable advantage in growing together with the real economy has been fully reflected. As approved by the Henan provincial government recently, Central China Securities is going to establish a technology and innovation venture capital fund with Finance Department and Science and Technology Department of Henan Province with an initial fund of RMB500 million. Both of the Finance Department and Central China Securities will contribute RMB250 million. The increase in capital will be decided based on the investment needs in the future. Our company will be responsible for fund raising in the market. This fund, on the one hand, serves as an important carrier to implement the idea of "encouraging the general public to start their own businesses and Hundreds of thousands of people's passion for innovation" introduced by the Country; on the other hand, provides rich corporate resources for us to deeply explore the real economy and develop our "Six in One" whole industry chain and core competitiveness.
Reporter: Can you further explain its relation with the development ofCentral China Securities?
JIAN Mingjun: The relation is quite clear. The technology and innovationfund covers the best 4000 technology and innovation SMEs in Henan. Aftertheir rapid growth under the solid support from the fund, we willactively recommend them to get listed through our controllingcompany, Central China Equity Exchange Co., Ltd. Every enterprise whichgets listed through Equity Exchange Co. will receive no less than RMB 1million credit from our direct investment company and other supportssuch as share pledge. With these supports, excellent companies among the4000 technology and innovation enterprises and the representatives ofthe 400,000 SMEs in Henan Provinces through the registration, custody,listing, transfer and financing services of Equity Exchange Co. willsoon be recommended to be listed in New OTC Board. We will also providefinancing services like New OTC Board market-making service for thelarge number enterprises in New OTC Board to help them accelerate theirdevelopment. Regarding the enterprises growing in New OTC Board, we canhelp them to transfer the listing to SME Board or GEM Board, or even toMain Board or GEM Board in Hong Kong by fully leveraging our superioradvantage as a Hong King listed company and established subsidiary inHong Kong (Central China International). For the enterprises that changetheir listing to Main Board or GEM Board, we can also provide timely services to expand their financing and help with their acquisition andreconstructing. The above form a unique "Six in One" comprehensiveindustry chain.
As a responsible listed company, Central China Securities can help the4000 fast growing technology and innovation SMEs and other 400,000 SMEsin Henan to accelerate their development and provide complete servicesand support, meaning that Central China Securities is closely connectedwith the physical economy. While greatly supporting the development ofphysical economy, the Company will definitely further develop itself atthe same time.
Reporter: To deeply explore the real economy is the core part of the "six-in-one" whole industry chain, how is the progress now? Can it gradually become the core competitiveness of Central China Securities?
JIAN Mingjun: Basically, the credibility of Central China Securities among all the enterprises and government departments in Henan province mainly lies upon our wholehearted devotion and sincerity of service. For instance, the largest seed company in Henan Province, Henan Qiule Seed Industry Science and Technology Ltd., Com had spent a great deal of efforts to achieve listing without success. Early last year, the key person of this enterprise has reached out to us looking for advice and assistance for their listing. Afterconsideration, our corporate finance department advised the enterprise to pursue listing in the New OTC Board in order tofurther transfer to main board in the future. We are glad that the management accepted our suggestion with appreciation. By working closely with our Corporate Finance Department, we finally succeeded in assisting the enterprise to list on the New OCT Board in only a few months and the enterprise was highly satisfied with our efforts. We are now assisting the enterprise in studying a series of Post-IPO activities such as market making and fund raising. We believe this enterprise still has ample room for growth.
There is also another private pipe pile manufacturing enterprise in a provincial city which has strong foundation, desirable prospect for their products as well asa group of highly entrepreneurial and ambitious leaders. However their size of net profit was just less than RMB500,000 when they were not yet listed. Not until the end of last year, when their management came to us for discussing listing opportunities, both of us were so impressed by each other and we successfully realized their listing plan in the New OTC Board. The reputation of the enterprise and the sales of their products has been significantly increased after listing. It is expected that they will be able to achieve a net profit of about RMB20-30million and an even stronger growth in profit in next year. During the Post-IPO stage, our New OTC Board Market Making Department spent nearly RMB10million in buying a certain amount of stock for market making and fund raising activities. Not long ago, as invited by the local government of that province and the enterprise, I brought our direct investment team, corporate finance team and market making team to visit the company. After the visit, the direct investment team intends to increase their investment amount and if both of us are able to reach a compromise, the investment will be in place soon. We believe the increased investment will be able to facilitate to development progress and we will be able to benefit from their growth as well.
For instance, there's a modern farming enterprise located in southern part of Henan with an annual live pig production of more than 100,000 heads; however, due to the significant drop of hog price during second half of last year, the enterprise was undergoing serious difficulties and nearly unsustainable in operating its business. Under this circumstance, this enterprise has reached out to us under the lead of the local government and wished to seek financial assistant from our venture capital. After many site visits and due diligent processes, our venture capital has decisively invested RMB 60 million into the company to help overcoming its hard time. At almost the same time, our investment bank department has immediately started the application process of NEEQ market making for this company and has currently obtained the approval document and it's expected to get listed in early September. After the listing on NEEQ, this company will be leaded under CCSC and would potentially switch and listed on the main board of mainland or Hong Kong Stock Exchange. Due to the hog price has now increased significantly; this enterprise has gradually developed healthy with standardized internal management system. The development path in the past year, the owner of this enterprise has thanked us many times sincerely: "We will hold the hands of CCSC to establish a long-term relationship without growing apart!" The Group's venture company, investment bank and NEEQ market making departments have contributed a lot of effort into this enterprise and they have as well received valuable rewards over this process.
We believe our unique and comprehensive "six-in-one" industry chain has vast development opportunities which would potentially become the core competitiveness of our company.
Reporter: Can you share your thoughts on the development philosophy of CCSC?
JIAN Mingjun: As a Hong Kong listed company with high integrity and responsibility, we have to overcome and accomplish many issues over time; however, we will focus on the two main areas I mentioned as our current and long-term priority, that is, to reward our shareholders and to strengthen the economy. Meanwhile, we have complied stringent risk management and corporate governance policies to ensure any business activities and new businesses conducted are legally legitimate, as well as to make prosperity and contribution to the China's and Hong Kong's economy by action.
Sectors: Daily Finance
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