S&P Global Ratings last week (November 29, 2019) released a report revising its outlook on the long-term ratings on Huatai Securities Co. Ltd. (Stock Code: 6886.HK; “The Company”) and its core subsidiary, Huatai International Financial Holdings Co. Ltd. (HTIF), to positive from stable, while also affirming the Company’s ‘BBB’ long-term issuer credit ratings on both companies. S&P Global Ratings expects the Company to maintain its leading position in most of its businesses for the next 24 months as the company exhibits sound risk management as well as a strengthening capitalization.
“The outlook revision reflects our view that Huatai Securities’ capital raising actions and new investment trading plan could enhance its capitalization sustainably.” said the report. This statement rings true, as the Company’s internationalization has greatly accelerated since the beginning of this year. In June 2019, the Company issued the first ever global depository receipt (GDR) under the London-Shanghai stock connect program to successfully list on the London Stock Exchange. Through the listing, the Company’s net assets increased to RMB 116.82 billion, which further enhanced its foothold, visibility and participation in the global capital market. In July 2019, AssetMark, the turnkey asset management platform (TAMP) acquired by the Company in 2016, was successfully listed on the New York Stock Exchange, further strengthening the Company’s capitalization and paving way for new international development.
This revised rating will help promote Huatai Securities’ position within the global capital market, further reduce the cost of overseas financing, and create beneficial conditions for cross-border business. S&P Global Ratings also noted that the Company’s rating could be further upgraded if the risk-adjusted capital (RAC) ratio could be sustainably above 15%. (As of June 30, 2019, the company’s RAC ratio was 17.2%.)
