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Guotai Junan views Vietnam as a growth driver
Posted on Wednesday, 04 July 2018 08:45
Hong Kong-incorporated and -listed investment bank and securities brokerage Guotai Junan International is “in an active negotiation in relation to a proposed acquisition of a majority interest” in a Vietnamese company.

The financial services provider is remaining relatively quiet about the discussions, merely stating the purchase will be determined though negotiations on an arms’ length basis and will be settled in cash.

Guotai Junan noted the deal, should it go ahead, would help expand the group’s business presence in Southeast Asia.

The holding company is the first Mainland-owned securities brokerage house with China Securities Regulatory Commission approval to list its shares through an initial public offering on the main board of the Stock Exchange of Hong Kong.

Its five core areas are: dealing and broking in securities, futures, options and leveraged foreign exchange; corporate finance; asset management; loans and financing; and financial products, market making and investments.

Guotai Junan’s business has diversified in recent years by shifting from the traditional fee-based brokerage to wealth management due to a rapid and successful development of loans and financing, among other things.

The group noted that since 2012, it has “entered into a fast growth period” with a compound annual growth rate (CAGR) of 32.0 per cent and a CAGR of net profit of 34.0 per cent.

At the same time, it has maintained a pay-out ratio of more than 50.0 per cent with a return on equity of 15.0 per cent in last year ended 31st December 2017.

As an overseas platform of controlling shareholder Guotai Junan Securities, Guotai Junan is focused on building up its portfolio to create new growth drivers, and accelerating the expansion of service coverage and customer base in Southeast Asia.

It has not made any material acquisitions or disposals of subsidiaries and associated companies, nor has it held any significant investments, in the eight years it has been listed in Hong Kong.

The potential purchase of the unnamed Vietnamese financial services provider would benefit Guotai Junan’s international competitiveness while meeting Beijing’s One Belt, One Road strategy.

© Zephus Ltd