AMTD International Inc. Reports Unaudited Financial Results for the Six Months Ended June 30, 2020 and for the Nine Months Ended September 30, 2020
AMTD International (HKIB, HKB) reported strong financial performance for the six and nine months ended September 30, 2020. Fee and commission income surged by 62.8% to HK$451.0 million (US$58.2 million) for the six months, and 26.7% to HK$534.9 million (US$69.0 million) for nine months. Total revenue derived from fees and commissions reached 90.5% of total revenue. However, net fair value changes on investments dropped significantly, with a net loss of HK$5.5 million (US$0.7 million) for six months. Operating expenses rose 65.6% to HK$83.7 million (US$10.8 million) for six months, impacting overall profitability.
- Fee and commission income increased by 62.8% for six months and 26.7% for nine months.
- Total revenue from fees and commissions reached 90.5% for nine months.
- Profit and total comprehensive income rose by 39.2% for six months to HK$603.9 million (US$77.9 million).
- Total AUM increased by 6.7% to HK$28.0 billion (US$3.6 billion) since December 2019.
- Net fair value changes on investments resulted in a loss of HK$5.5 million (US$0.7 million) for six months, compared to a gain of HK$240.5 million (US$31.0 million) last year.
- Operating expenses increased by 65.6% for six months to HK$83.7 million (US$10.8 million).
AMTD International Inc. (“AMTD International” or the “Company”, NYSE: HKIB; SGX: HKB), a NYSE and SGX-ST dual listed company and a subsidiary of AMTD Group Company Ltd. (“AMTD Group” or the “Group”), a Hong Kong headquartered financial services focused conglomerate focusing on the IDEAS strategy to develop the 5 pillars of core businesses with AMTD International as its first listed company, today announced its unaudited financial results for the six months ended June 30, 2020 and nine months ended September 30, 2020.
Highlights of 2020 Financial Results and Key Changes for the Six Months and Nine Months Ended 2020:
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Our fee and commission income for the six months ended June 30, 2020 increased by
62.8% as compared to the same period in prior year from HK$277.0 million (US$35.7 million equivalent) to HK$451.0 million (US$58.2 million equivalent), and the fee and commission income for the nine months ended September 30, 2020 increased by26.7% as compared to the same period in prior year from HK$422.1 million (US$54.5 million equivalent) to HK$534.9 million (US$69.0 million equivalent), as a result of the robust capital market activities for major markets in particular Hong Kong and U.S. in 2020. We continued to maintain an active and leading role as an independent investment bank which is rarely and uniquely positioned with our global and local (“glocal”) capital markets expertise, our comprehensive investment banking platform and capabilities to connect major markets in the world including Hong Kong, U.S. and Singapore, as well as the entrepreneurship spirits in our DNA similar to most of the generation Y and Z entrepreneurs of our clients.
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Our total revenue mix continues to shift towards a concentration on fee and commission income as a result of our successful investment banking franchise and performance fees derived from the asset management business. Our fee and commission income, dividend income, and realized gain on investment as a component of total revenue reached
90.5% for the nine months ended September 30, 2020 as compared to50.2% in the same period last year. Our revenue derived from net fair value changes on investments and derivative as a component of total revenue was9.5% for the nine months ended September 30, 2020 as compared to49.8% in the same period last year.
- Our investment banking franchise is well equipped to capture opportunities arising from the significant amount of fundraising activities in line with global capital market trends and developments, with our completed number of global capital market deals including equity and debt capital markets transactions reached 43 during the nine months period ended September 30, 2020.
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Our asset management business continued to grow from our already established and strong AUM base of HK
$26.2 billion (US$3.4 billion equivalent) as of December 31, 2019 through the support and trust from the regional institutional investors community, with a total AUM as of September 30, 2020 amounting to HK$28.0 billion (US$3.6 billion equivalent), representing an increase of6.7% as compared to December 31, 2019.
- Our Board of Directors composition has recently undergone important changes to adopt a majority independent Board structure and to embrace the highest standards of corporate governance, comprising of both independent directors as Chairman and Vice Chairman being Dr. Feridun Hamdullahpur and Mr. Gao Yu, respectively.
- We also welcome the Company’s newly appointed CEO Mr. William Fung, a member of the founding management team of the new AMTD since 2016 and is well qualified as one of the second generation leaders to lead AMTD International. Mr. Fung is also a Group Vice President of AMTD Group overseeing the financial services franchise of the Group. Mr. Fung has extensive experience in the international capital markets. Prior to joining AMTD in 2016, he worked at UBS AG Hong Kong, Nomura International (Hong Kong) Limited and Lehman Brothers Asia Limited. Before that, Mr. Fung also practiced professional engineering in the United States. Mr. Fung received his higher education in the United States and attained a Bachelor of Science degree in Industrial Engineering from Purdue University and a Master of Science degree in Financial Engineering from the University of Michigan.
Statement from the Board Members and Senior Management:
Dr. Feridun Hamdullahpur, Chairman of the Board, said, “I am very excited to take on this journey to lead AMTD International’s Board. AMTD International has achieved tremendous growth under the leadership of a visionary management team. Under AMTD Group’s IDEAS strategy, AMTD International is the first list-co, being our initial touch point with the international capital markets. 2020 represents AMTD International’s second financial reporting year since its listing on the NYSE in 2019. The Board will guide AMTD International to continue embracing the highest standards and international best practice in corporate governance, evidenced by a majority independent directors Board, carrying out our commitment to support glocalization, sustainability and social corporate responsibility. I would like to congratulate everyone on the appointment of the new Board and the newly promoted CEO William Fung, signifying the readiness and stepping up of AMTD Group’s second generation leaders.”
Professor Annie Koh, independent director of the Board, said, “I also would like to welcome the new independent board structure that serves to attain the highest corporate governance standards. AMTD International is committed to building a world class financial institution, connecting the dots between the Greater Bay Area to ASEAN and beyond. I congratulate the AMTD International management team for the stella interim results achieved. As an independent director of the Board chaired by Dr. Feridun Hamdullahpur, I look forward to working with our new CEO William in building greater values for all stakeholders going forward.”
Mr. Marcellus Wong, Executive Director of the Board and Chairman of the Executive Management Committee, added, “I’m glad to witness AMTD Group’s exciting growth journey since 2015 and the successful spin off listing of AMTD International last year. At present, being a dual-listed company on both the NYSE and SGX and led by a very experienced management team with international perspective and expertise, AMTD International is committed to its strategy of regionalization and build-out of a world-class comprehensive financial platform. I am confident about the next stage of developments and international expansion of AMTD International alongside our commitment to build this HK headquartered global investment bank to become a century old franchise.”
Mr. William Fung, Chief Executive Officer of the Company stated, “as one of the founding members of the senior management team under the leadership and vision of our founding Chairman and CEO Mr. Calvin Choi and the senior management team, it has been a fantastic experience the past four years building and transforming AMTD International into a Hong Kong home-grown global financial institution housing Asia’s leading investment banking franchise and asset management platform and the world’s first NYSE and SGX dual-listed company. As the newly appointed CEO, I am excited to have the responsibility to lead the on-going transformation journey and take AMTD International to the next level with the support of our independent directors’ majority Board and continued dedication from our staff. We will continue to promote and invest into talents, encourage entrepreneurship spirits and commit to corporate social responsibilities. Last but not least, I would like to thank the Board led by Dr. Feridun Hamdullahpur and Mr. Yu Gao for the support and guidance they have given to me and the Company.”
Financial Results for the Six Months Ended June 30, 2020
Core Revenue
Core revenue include fee and commission income, dividend income and realized gain on investment, for the six months ended June 30, 2020 was HK
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Fee and commission income for the six months ended June 30, 2020 increased by
62.8% as compared to the same period in prior year to HK$451.0 million (US$58.2 million equivalent), primarily due to an increase in fee and commission income from both investment banking and asset management segments. Fee and commission income from the investment banking segment increased by38.1% as compared to the same period in prior year to HK$298.0 million (US$38.4 million equivalent), primarily due to an increase in our fees and commissions for (i) equity offerings and financial advisory services from HK$165.7 million (US$21.4 million equivalent) to HK$211.6 million (US$27.3 million equivalent) for the respective periods, and (ii) debt capital market deals from HK$50.1 million (US$6.5 million equivalent) to HK$86.4 million (US$ 11.1 million equivalent) for the respective periods. Fee and commission income from the asset management segment increased by150.1% as compared to the same period in prior year to HK$153.0 million (US$19.7 million equivalent), primarily due to an increase in fee income attributable to new clients and performance fee charged.
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Dividend income and realized gain on investment for the six months ended June 30, 2020 decreased by
12.4% as compared to the same period in prior year to HK$88.1 million (US$11.4 million equivalent), primarily due to decrease in net gain from disposed investment.
Net Fair Value Changes of Investments and Derivatives
For the six months ended June 30, 2020, there was a net loss HK
Operating Expenses
Operating expenses for the six months ended June 30, 2020 increased by
Income Tax (Expense) / Credit
Income tax expense of HK
Profit and Total Comprehensive Income
Profit and total comprehensive income for the six months ended June 30, 2020 increased by
Financial Results for the Nine Months Ended September 30, 2020
Core revenue
Core revenue for the nine months ended September 30, 2020 was HK
-
Fee and commission income for the nine months ended September 30, 2020 increased by
26.7% as compared to the same period in prior year to HK$534.9 million (US$69.0 million equivalent), primarily due to an increase in fee and commission income from both investment banking and asset management segments. Fee and commission income from the investment banking segment increased by6.2% as compared to the same period in prior year to HK$351.1 million (US$45.3 million equivalent), primarily due to an increase in our fees and commissions for (i) equity offerings and financial advisory services from HK$244.6 million (US$31.6 million equivalent) to HK$259.0 million (US$33.4 million equivalent) for the respective periods, and (ii) debt capital market deals from HK$86.0 million (US$11.1 million equivalent) to HK$92.1 million (US$11.9 million equivalent) for the respective periods. Fee and commission income from the asset management segment increased by101.1% as compared to the same period in prior year to HK$183.9 million (US$23.7 million equivalent), primarily due to an increase in fee income attributable to new institutional clients and performance fee charged.
-
Dividend and realized gain related to investment for the nine months ended September 30, 2020 decreased by
12.4% as compared to the same period in prior year to HK$88.1 million (US$11.4 million equivalent), primarily due to decrease in net gain from disposed investment.
Net fair value changes of investments and derivatives
The net fair value gain amounted to HK
Operating Expenses
Operating expenses for the nine months ended September 30, 2020 increased by
Income Tax (Expense) / Credit
Income tax expense of HK
Profit and Total Comprehensive Income
Profit and total comprehensive income of HK
Exchange Rate
The Company’s business is mainly conducted in Hong Kong and most of its revenues generated are denominated in Hong Kong dollars. This announcement contains translations of Hong Kong dollars into U.S. dollars solely for the convenience of the reader. Unless otherwise noted, all translations from Hong Kong dollars to U.S. dollars are made at a rate of HK
AMTD INTERNATIONAL INC.
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Six months ended June 30, |
|||||||
2019 |
2020 |
||||||
HK$ |
HK$ |
||||||
| REVENUE | |||||||
| Fee and commission income | 276,993,792 |
450,979,301 |
|||||
| Dividend income and realized gain related to investment | 100,551,728 |
88,078,159 |
|||||
377,545,520 |
539,057,460 |
||||||
| Net fair value changes of investments and derivatives | 240,500,597 |
(5,498,858) |
|||||
618,046,117 |
533,558,602 |
||||||
| Other income | 240,968 |
40,587,957 |
|||||
| Operating expenses | (50,567,920) |
(83,735,272) |
|||||
| Staff costs | (47,817,659) |
(45,291,034) |
|||||
| Finance costs | (10,775,829) |
(14,594,601) |
|||||
| PROFIT BEFORE TAX | 509,125,677 |
430,525,652 |
|||||
| Income tax (expense) / credit, net | (75,244,709) |
173,424,082 |
|||||
| PROFIT FOR THE PERIOD AND TOTAL | |||||||
| COMPREHENSIVE INCOME FOR THE PERIOD | 433,880,968 |
603,949,734 |
|||||
| Attributable to: | |||||||
| Owners of the parent | 541,249,399 |
587,651,843 |
|||||
| Non-controlling interests |
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