C elestial Asia Securities Holdings Limited Annual Report 2014 2014 Annual Report

150 Pages·2015·0.51 MB·English

CASH_AR14_E_cover.ai 1 18/4/2015 5:09:45
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28/F Manhattan Place, 23 Wang Tai Road, Kowloon Bay, Hong Kong o
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Tel: [phone] Fax: [phone]
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22/F, 868 Changshou Road, Shanghai Postal Code: 200060
Tel: [phone] Fax: [phone]
2014 Annual Report
Contents
Corporate Profile 2
Corporate Information 4
Chairman’s Letter 6
Financial Review 8
Management Discussion and Analysis 12
Employee Information 18
Board of Directors and Senior Management 20
Corporate Governance Report 24
Directors’ Report 35
Independent Auditor’s Report 49
Consolidated Statement of Profit or Loss and Other 50
Comprehensive Income
Consolidated Statement of Financial Position 51
Consolidated Statement of Changes in Equity 53
Consolidated Statement of Cash Flows 55
Notes to the Consolidated Financial Statements 57
Appendix I — Investment Properties 142
Appendix II — Summarised Statement of Financial Position 143
of the Company
Appendix III — Five-Year Financial Summary 144
Definitions 146
CASH Annual Report 2014 1
Corporate
Profile
2 CASH Annual Report 2014
CORPORATE PROFILE
Celestial Asia Securities Holdings Limited (“CASH”, SEHK: RETAIL MANAGEMENT — PRICERITE
1049) is a multi-faceted service conglomerate in China.
We address modern consumer needs in investment and
Pricerite is the largest home furnishing specialist in Hong Kong.
wealth management, home improvement, lifestyle, personal
Through our comprehensive network of outlets, we offer
enjoyment and mobile internet services. All our businesses
products from furniture, home textiles, household products,
share a common mission that our customers’ interests always
home appliances to AV products. Upholding the “Living Smart”
come first. Our brands are synonymous with good customer
principle, we are committed to providing one-stop smart home
service, great quality and fabulous value.
solutions that exceed customer expectations. Headquartered in
Hong Kong, our extensive sourcing network in China enables us
Abide by the “People-Oriented” principle, CASH Group is
to work directly with manufacturing partners to ensure all our
committed to becoming a Total Caring Organisation to partner
products are with great value. We also strive to foster a caring
with our key stakeholders to work towards the sustainable
culture for our customers, employees, vendors, communities
development of our business, our employees, our environment
and natural environment.
and our society. CASH’s award-winning companies
comprise CASH Financial Services Group (CFSG), CASH Retail
We have a long heritage of adopting advanced technologies
Management Group (CRMG): Pricerite, and Net2Gather (China)
to enhance our operating efficiency. From back office support
Holdings.
to product and service offerings, marketing communications
and delivery scheduling, we strengthen our competitive edges
FINANCIAL SERVICES — CFSG
through a balanced fusion of technology and people.
CASH Financial Services Group (SEHK: 510) is a leading financial
Pricerite is known for its relentless effort in pursuing dedicated
services conglomerate in China, providing a comprehensive
services and product innovation, resulting in high acclaims
range of financial products and quality services that includes
such as the Premier Service Brand from the Hong Kong Brand
mobile and premium trading, investment banking, algo trading
Development Council, “Outstanding QTS Merchant Awards”
and corporate finance advisory, wealth and asset management,
— Gold Award from Hong Kong Tourism Board, the PRC
alternative trading, etc. As a leading technology-focused
Consumers’ Favourite Brands Campaign 2008 from the China
financial services provider, coupled with our professional
Enterprise Reputation & Credibility Association (Overseas) Ltd.
human talents, CFSG is committed to operating the state-of-
and numerous Service and Courtesy Awards from the Hong
the-art trading platform to provide our clients with instant
Kong Retail Management Association, etc.
market information while at the same time trade anytime,
anywhere, borderless. MOBILE INTERNET — NET2GATHER
(CHINA)
Headquartered in Hong Kong, CFSG has already built a solid
foothold in China. With our comprehensive product offerings,
Net2Gather (China) Holdings is a Mobile Internet service
international management experience, and award-winning
provider in China, providing online games, mobile games
operating platform, we cater for the investment and wealth
and IPTV interactive games. By aggregating various Mobile
management needs of our clients anytime, anywhere.
Internet services into an integrated platform, including content
(upstream), operating platforms (midstream) and distribution
Known for our innovation and quality services, CFSG has
channels (downstream), Net2Gather aims to build a cross-value
been widely recognised in the industry. In 2008, CFSG was
chain of activities to enable people to come 2Gather in an
the first organisation in Hong Kong to obtain the stringent
online community in China that combines Mobile, Internet and
ISO 9001:2008 certification, with zero non-conformity. Other
Television platforms in line with the national move towards
accolades include a Top Service Brand award from the Hong
convergence.
Kong Brand Development Council, and the Distinguished
Salespersons Awards from the Hong Kong Management
Association, etc.
CASH Annual Report 2014 3
Corporate
Information
4 CASH Annual Report 2014
CORPORATE INFORMATION
BOARD OF DIRECTORS AUDITOR
Executive: Deloitte Touche Tohmatsu
KWAN Pak Hoo Bankee (Chairman) Certified Public Accountants
LAW Ping Wah Bernard (CFO)
SOLICITORS
NG Hin Sing Derek (ED)
Sidley Austin
Independent Non-executive:
REGISTERED OFFICE
LEUNG Ka Kui Johnny
WONG Chuk Yan Clarendon House
CHAN Hak Sin 2 Church Street
Hamilton HM 11
AUDIT COMMITTEE
Bermuda
LEUNG Ka Kui Johnny (committee chairman)
HEAD OFFICE AND PRINCIPAL PLACE
WONG Chuk Yan
OF BUSINESS
CHAN Hak Sin
28/F Manhattan Place
REMUNERATION COMMITTEE
23 Wang Tai Road
LEUNG Ka Kui Johnny (committee chairman) Kowloon Bay
WONG Chuk Yan Hong Kong
KWAN Pak Hoo Bankee
REGISTRARS AND TRANSFER OFFICE
COMPANY SECRETARY IN HONG KONG
LUKE Wing Sheung Suzanne, FCIS, FCS (PE) Tricor Standard Limited
22/F Hopewell Centre
AUTHORISED REPRESENTATIVES
183 Queen’s Road East
KWAN Pak Hoo Bankee Hong Kong
LAW Ping Wah Bernard
WEBSITE
(alternate: LUKE Wing Sheung Suzanne)
www.cash.com.hk
PRINCIPAL BANKERS
STOCK CODE ON MAIN BOARD
Nanyang Commercial Bank, Limited
OCBC Wing Hang Bank Limited 1049
The Hong Kong and Shanghai Banking Corporation Limited
CONTACTS
CTBC Bank Co. Ltd.
Standard Chartered Bank (Hong Kong) Limited Telephone : [phone]
Industrial and Commercial Bank of China (Asia) Limited Facsimile : (852) 2287 8000
Chong Hing Bank Limited
China Construction Bank (Asia) Corporation Limited
Wing Lung Bank Limited
The Bank of East Asia, Limited
Shanghai Commercial Bank Limited
CASH Annual Report 2014 5
Chairman’s
Letter
6 CASH Annual Report 2014
CHAIRMAN’S LETTER
Dear Fellow Shareholders, We have also started revamping information technology
systems in Pricerite to cater for a business environment
2014 was an eventful year for both Hong Kong and the world. shaped by big data analytics. Big data can improve customer
Internationally, the outbreak of Ebola and the rise of a radical satisfaction by driving forward efficiency and the shopping
Islamist group posed serious challenges. The world financial experience, refine brand positioning and target the right
order was also buffeted by the rapidly changing economic and customers more effectively. We will continue to explore
regulatory environment and mixed market signals, with Europe cutting-edge technology and operational models, such as the
and Japan struggling to stay out of recession, the US steadily Omni Channel, to further enhance perceptions and enjoyment
accelerating GDP growth, and China seeking to improve the of our retail experience. We believe that there will be
quality and stability of its economy. On the technology front, tremendous scope for growth as Hong Kong property market
innovations such as big data analytics altered the landscape continues to supply more small to medium-sized apartments.
for companies and lifestyles. All these developments have
impacted the traditional business ecosystem, creating Looking ahead, the Board believes that the CASH Group is
uncertainty for long-term investors while putting more in good shape for prudent future expansion. Over the years,
emphasis on the importance of technology in changing lives. our success has been built on our ability to recruit and retain
the best people. A management training programme for
Keeping abreast of external developments and innovation, the high-potential graduates has been in operation since the CASH
CASH Group continued the transformation of our businesses, Group was established. In addition, we have sought to recruit
on-going since 2009, through further evolution of our PhD and Master’s degree graduates and top students from
operating and technology systems. We will also be vigilant in leading universities around the world. Such strategies have
studying fresh market openings, with the objective of investing enabled the Group to nurture the talented teams to manage
in technology-driven businesses to support our aggressive our businesses carefully and continuously serve our clients
expansion plans for the years ahead. better. Built on this solid foundation of people, quality and
ability to manage change, the CASH Group is fully prepared to
Our financial services group, CFSG, has successfully advanced succeed in the business world of the 21st century by bringing
into a technology-driven financial services house, with both market-leading innovation and world-class services to clients
infrastructure and talents in place. The recent sale of CFSG through advanced technology.
shares to Oceanwide Holdings (Hong Kong) Company Limited,
a wholly-owned subsidiary of the Shenzhen Stock Exchange I would like to take this opportunity to thank all staff, especially
listed Oceanwide Holdings Company Limited, was a significant long-serving members of CFSG. In the coming years, your
move for CFSG. The synergy between CFSG and Oceanwide will professionalism and dedication are set to be rewarded as the
be pivotal to further expand CFSG into the Mainland financial financial markets of Hong Kong and Mainland China continue
market, given its intensive capital requirement. The Board to integrate. The world of technology is also opening up
considers the divestment a good opportunity to enhance immense opportunities for market pioneers. Your diligence,
CASH shareholder value by realising investment gains for the creativity and intelligence are fully recognised as the Group’s
Group’s future growth. CFSG will continue with proven efforts most valuable assets. I would also like to thank my fellow
to develop brokerage and wealth management businesses in directors who, as always, have provided me with great support
Hong Kong and Mainland China. and guidance.
Leveraging the technology boom in big data and innovative
finance, the Group is committed to developing our financial
technology (FinTech) business through our quantitative
Yours sincerely,
finance and algorithmic trading group. FinTech utilises
software and advanced technology to provide innovative
financial solutions. Recent research by CB Insights showed that
investment in FinTech firms across the world grew from £2.7
billion in 2013 to £8.2 billion in 2014. With our state-of-the-art
infrastructure and in-house designed FinTech products, CASH
Algo Finance Group (CAFG) will seek to form strategic alliances Bankee P. Kwan
and collaborations to create FinTech solutions for the emerging Chairman
financial innovation industry. Celestial Asia Securities Holdings Limited
CASH Annual Report 2014 7
Financial
Review
8 CASH Annual Report 2014
FINANCIAL REVIEW
FINANCIAL PERFORMANCE sentiment in 2014, FSG was still facing a very tough business
environment and uncertainties in the financial services
industry. During the year, the market was extremely choppy
During the year under review, notwithstanding the challenges
over the concerns about the dim economic outlook in Europe
brought about by the uncertainty in the macro-economic
and the slowdown in the Mainland economy. Our clients
and keen competition amongst industry players, the Group’s
who are mainly retail investors had difficulties in making their
Financial Service Business and Retail Management Business
investment decisions in this highly volatile stock market. At the
managed to weather through the difficulties and maintained
same time, FSG had adopted a rigid credit risk management
the same revenue level of the previous year. Overall, the Group
in view of these complicated and highly unpredictable
recorded revenue of HK$1,371.6 million for the year ended
investment environments by tightening its margin financing
31 December 2014 as compared to HK$1,306.5 million of
policies throughout the year. As such, FSG’s revenue rose only
the previous year. During the year under review, the Group
1.80% in 2014. As huge business opportunities across the
recorded a gain on disposal of a commercial property in Hong
border are expected to be available to FSG after the launch of
Kong of approximately HK$18.0 million. In addition, there
the link-up between the Hong Kong and Shanghai exchanges,
was an increase in fair value on its investment properties
FSG will take more aggressive plans to enlarge its customer
amounting to HK$37.1 million. In 2014, its associate company
base by further expanding its financial services into Mainland
recorded a gain on the disposal of its entire registered shares
China. Facing the keen competition in the market and the
of its subsidiary which owned and managed an investment
high compliance costs imposed on the financial services
property in the PRC. Accordingly, the Group reported its share
sector, FSG will continue to maintain stringent cost controls
of profit of an associate of HK$60.5 million as compared to its
over its operations. At the same time, FSG has dedicated its
share of loss of an associate of HK$9,000 in 2013. Overall, for
resources in building the most advanced information and
the year ended 31 December 2014, the Group reported a net
communication technology infrastructure and low-latency
profit for the year of HK$43.6 million as compared to a net loss
trading platform and recruited professionals to research and
of HK$128.4 million of the previous year.
develop trading strategies for our algorithmic trading business
for our institutional, corporate and individual investors for their
Financial Services Business — FSG
versatile investment and wealth management needs.
For the year ended 31 December 2014, the Group’s Financial
As a result of the above, FSG recorded a net segment loss of
Services Business (FSG) recorded revenue of HK$198.1 million,
HK$14.7 million for 2014 as compared to a net segment loss of
represented a mild increase of 1.80% as compared with
HK$17.6 million in 2013.
HK$194.6 million in 2013.
Retail Management Business — CRMG
The Hong Kong stock market having been affected by both
overseas and mainland market environments endured a
For the year ended 31 December 2014, our Retail Management
turbulent year in 2014, even though the Hang Seng Index
Business recorded revenue of HK$1,172.0 million and a net
(HSI) had made only a small gain during the past 12 months.
segment profit of HK$19.2 million as compared to revenue of
In early 2014, the HSI posted a year-to-date loss of 9%
HK$1,108.6 million and a net segment profit of HK$10.7 million
over the worries about the global economic effects on the
in 2013.
tapering of quantitative easing by the US Federal Reserve, a
slump in property prices and disorderly deleveraging in local
Hong Kong Retailing Business
government debts leading to unexpected decelerations in
industrial-output and economic growth in China and the
The Group’s Retail Management Business was still facing rising
political tension in Ukraine. In late 2014, the local stock market
operating costs as last year. The labour market conditions
rebounded as the investor sentiment rose on optimism about
remained tight throughout 2014 which resulted in increases
the supportive government policies adopted by the Central
in salaries and wages. The 4.4% rise in the overall consumer
Government’s efforts to counter the economic slowdown.
prices for 2014 coupled with the skyrocketing rental cost had
These policies, including the cut in interest rates by the central
been keeping pressures on operating costs for the Group’s
bank, together with the launch of the Hong Kong-Mainland
retailing business. Hong Kong’s overall retail sales dropped
Stock Connect Scheme, had led the local stock market to
0.2% in 2014 whereas consumer durable goods increased by
swing back to a 9% gain at one point in the second half of the
4.1%. Market concerns about the expected rise in interest rate
year. Despite that the trading in the stock market rose 11%,
and the various government’s measures of dampening the
reflecting an overall improvement in the local investment
CASH Annual Report 2014 9