Chong Yin Future Attacks on the Bay Area Liang Gaomei Expects ROE to Return Double Digits

After Yuexiu Group entered Chong Hing Bank (1111), Liang Gaomei, the vice chairman and managing director of the bank, took a visit before his retirement and said that the previous development of the silver mainland was slow and the scale was small. With the Greater Bay Area as the engine of growth, it is expected that the return on equity (ROE) will return to the double-digit level this year. If there are suitable M&A opportunities in the future, it is of interest to consider, but if it were purely to buy Hong Kong operations, it would not seem to be necessary. Reporter: Liu Meiyi

In mid-2015, City Chuan Yuexiu was one of the buyers who actively bid for Nanshang, and Chuangyin’s share price rose by more than RMB 24. However, as China Cinda (1359) won the bid, Chuangyin’s share price gradually fell back to before the bank’s stock price was released. Level. Last Friday, it closed at 15.58 yuan, with no rise or fall.

Back on Yuexiu business opportunities

Regarding the failure to acquire Nanshang, whether it would hinder the key to creating silver and creating large stocks, and stock price drop, Liang said it is difficult to answer hypothetical questions. It only means that Chuangyin has always placed emphasis on the positioning of SMEs and community banks in Hong Kong. Although there are many branches, the Mainland business The development is slow and detailed. She points out that in the future, whether it is through self-employment or merger and acquisition opportunities, growth in the Mainland should be accelerated.

Yuexiu Group, which holds a 75% interest in Shanghai, is one of the largest state-owned enterprises under the Guangzhou Municipal Government. Chuangyin has 39 branches in Hong Kong, and the Mainland has 3 branches and 4 sub-branches, all of which are located in the Greater Bay Area.

Mrs Leung said that in the future, physical or virtual branches will be the focus of the expansion in the Mainland. Compared with the One Belt and One Road project, which is driven by large-scale infrastructure projects, she believes that the Greater Bay Area is involved in the flow of financial resources such as the flow of logistics, which is more suitable for the participation and direct acceptance of Hong Kong Bank. Hui, especially Chuangyin, is backed by Yuexiu and believes that it is possible to explore many credit opportunities in the Dawan District. The branch of the bank is also allowed to absorb deposits from the government and local authorities. The cost of capital is even more impressive than its opponent’s low NIM. Since the branch opened its first year, it recorded a profit. Therefore, if Chuangyin does not increase the development of the Mainland, it is a missed opportunity.

The HKMA announced that the growth in local loans last year was 16.1%, and the loan has consistently maintained a double-digit growth rate, which was 22.7% last year. She predicts that in response to the steady growth of the Chinese economy and the continued need for mainland enterprises to borrow in Hong Kong, this year’s market loan growth rate in Hong Kong can at least maintain the level of last year. I hope that the silver market will at least match the market growth.

At the end of last year, Chuangyin’s ordinary equity ratio of Tier 1 capital was 11.3%. In 2015, Chuangyin had contributed over RMB3.7 billion to the rights issue, and the market has also reported that Yuexiu intends to privatize Chuangyin.

With regard to whether there is an urgent need for equity financing this year, Mrs. Leung said that during the four years of his life, he has to carry out debt or equity financing. “I will say there is urgency, but Never says never.” The management will pay close attention to business growth and capital needs. If purely self-operated, the retained earnings should make up for core capital needs.

She also pointed out that when Yuexiu entered the capital, it retained its status as a listed company in Chongyin. Unless there are large-scale mergers and acquisitions in the future that require other financing arrangements to be made, it will be a matter of urgency.