分类：新闻发布_英语

[November 2, 2020, Hong Kong] China] China Securities Credit Investment Co., Ltd. (hereinafter referred to as“China Securities Credit Investment”), a national comprehensive credit service organization, together with its subsidiaries that focus on overseas strategy and business development – China Securities Credit Investment Technology Co., Ltd. (hereinafter referred to as “China Securities Credit Technology”) and Pengyuan Credit Rating (Hong Kong) Co., Ltd. (hereinafter referred to as “Pengyuan International”) made its debut again at the global renown fintech event -2020 Hong Kong Fintech Week, presenting online fintech studio regarding overseas funds entry into Chinese bond markets. A series of innovative solutions such as DMI bond quotation and information services from China Securities Credit Technology and credit rating services from Pengyuan International were also released.

Committed to providing full credit value chain services driven by technology

In 2018, China Securities Credit Investment (CSCI) made its debut at the Hong Kong Fintech Week and aroused strong responses. This year marked the fifth anniversary of Hong Kong Fintech Week with a brand new online conference mode and CSCI was invited to participate again.

As the leading Chinese integrated credit-tech service provider, CSCI aims to build an infrastructure that serves the entire life cycle of credit assets (asset generation – asset trading and exchange – asset management) empowered by its technology. It provides integrated services that cover the entire credit value chain, from credit risk management, credit enhancement, to credit asset trading services and management. In response to the low market recognition and insufficient liquidity of RMB assets in overseas markets due to opaque information, CSCI aims to provide overseas markets with high-quality and valuable international credit ratings, data and information services through the Hong Kong business platform, in order to help foreign investors understand RMB assets more comprehensively, objectively and quickly as well as increase their recognition and participation in RMB assets.

As the world economy has entered the era of low interest rates, the income of Chinese assets has obvious advantages on a global scale. The Chinese government has opened up for foreign capital markets in order to bring more money flowing in and out of the country. However, data shows that foreign capital still has concerns about entry the Chinese financial market especially the bond market. The online fintech studio on “Is Wall Street Ready to Accept Chinese Assets?” organized by CSCI and its subsidiaries aims to analyze the current situation of foreign capital entry the Chinese credit market and explore future opportunities. This panel connected distinguished guests from Shanghai, Hong Kong and Beijing, including Yang Yang, CEO of China Securities Credit Technology, Terry Zhang, Head of Global Strategy and Business Managementof Pengyuan International, and Zhai Chenxi,,Chairman of the Board of TF International Securities Group; Co-President of HengTai Securities and attracted approximately 25,000 attendees around the world.

Huge opportunities behind China’s credit bond market

“China is one of the world’s largest bond markets with the second largest scale globally. At present, international investors only account for about 10% of our local interest bond market. It is expected that the proportion of international investors in China’s bond local currency market will increase to 20% in the near future,” Zhai Chenxi from TF International put it.

When it comes to the differences between China’s bond transactions and overseas‘, Yang Yang from China Securities Credit Technology (CSCT) admitted that due to the lack of information about Chinese bonds on the overseas market platforms, foreign institutions do not know which direction to focus on when investing in Chinese bonds. In response to it, Yang Yang introduced the current status of the domestic credit bond market and the main trading methods, and stated: “In China, about 90% of Chinese bond issuers have not made their debut in the international market. Therefore, despite the great opportunities behind China’s credit bond market, foreign investors are not familiar with them.”

As a market innovator, CSCT has built a comprehensive bond information platform for global financial institutions. The DMI terminal launched by CSCT made great efforts to eliminate the information asymmetry of the two markets. It determines to build a Chinese bond quotation and information platform for overseas investment institutions, and provide foreign investors with various analytical tools and first-hand news information. It helps them better understand the Chinese market, effectively reduce credit risk, and use technology to empower China’s credit bond market. This will be the gateway for foreign investors into the Chinese market.

Huge data value in China’s domestic ratings

Regarding the doubts of global investors about whether China’s domestic credit ratings are inflated, Terry Zhang from Pengyuan International stated that China’s domestic ratings are in parallel with global credit ratings and cannot be directly compared. The global investors must realize a few things, firstly these domestic ratings are just of a different scale than the one they used to; seccondly, the domestic rating does carry great data value although it has much room to improve, and lastly, they should never confuse domestic rating to the global ones when they make investment decision.

As an international credit rating agency, Pengyuan International understands the differences between global and domestic credit ratings and is committed to providing reliable rating services for the global capital market. It uses data to enable international investors to better understand market trends through rating agencies. In addition to the distribution of global ratings authorized by the issuer, Pengyuan International can also conduct ratings based on the needs of global investors, according to the global scale, and combined with local conditions, which can well support and improve the decision-making of global investors.

Chen Hao, Chief Data Officer of CSCI put it: “We are honored to participate in Hong Kong Fintech Week again. As China’s leading credit technology company, China Securities Credit Investment Group will rely on highly effective technology innovation and keen sense of the market demand, forge ahead and become a highly influential technology service provider in China’s offshore bond market.”

On June 12th of 2019, the 6th Global Public Investor Launch and Seminar of the Official Monetary and Financial Institutions Forum (OMFIF) was held in Singapore. Practitioners across central banks, sovereign funds and public pension funds attended the summit to discuss the topics around the development trend of global public investors and a sustainable world economy. Some representatives included experts from the World Bank Group, the Federal Reserve of United States, Japan’s Financial Services Agency, the Bank of England, the Ontario Municipal Employees Retirement system, Fitch Ratings, etc. Jianwen Zhang, the Chief Strategy Officer of CSCI（China Securities Credit Investment Co., Ltd.）and the team were invited to attend the summit to give a speech on harnessing financial technology, and share the business innovation and practice of CSCI in the area of credit technology.

The site of OMFIF Global Public Investor Launch and Seminar in Singapore

As the representative from CSCI pointed out during the summit, as a leading credit-tech provider in China, CSCI endeavors to use technology to build an infrastructure that serves the entire lifecycle of the credit assets (asset generation – asset trading and exchange – asset management). CSCI provides integrated services that cover the entire credit value chain, from credit risk management, credit enhancement, to credit asset trading services and management，which help to reduce the cost of credit risk management, accelerate credit asset circulation, and mitigate the risk of credit asset investments. At present, CSCI has provided professional credit ratings, customized credit risk solutions, and credit technology-driven asset management services for more than 4,000 institutional clients such as industrial and commercial enterprises, new economies, financial institutions, government departments, and internet platforms.

Especially in the aspect of supply chain finance, CSCI has effectively built a multi-party trust system through blockchain technology and big data risk control technology, serving the small and micro enterprises as an independent service provider. In the case of supply chain financing, CSCI completes the loop of goods flow, information flow as well as the capital flow. As a result, the core anchor enterprise’s payment creditability is passed through to the second, third and fourth-level suppliers, so that the small and medium-sized suppliers can easily obtain financing from banks. To some extent, this mechanism has effectively solved the financing problems of the small and micro enterprises.

Representatives from CSCI discussed fintech applications with other experts

In addition, CSCI will also publish an article on the Bulletin magazine of OMFIF, titled “China’s bond market is too big to miss”. Valued at $13tn, China’s onshore bond market is the third largest in the world, making up 11% of the bonds market globally. Despite its massive size and potential, China still remains one of the least penetrated bond markets by global investors. According to the People’s Bank of China, at the end of 2018, foreign investors accounted for 2.3% of the market in terms of value. However, this has started to change. Bloomberg has begun including Chinese government bonds and policy bank securities in its $54trn Bloomberg Barclays Global Aggregate index. The inclusion into major global benchmarks is expected to attract trillions in foreign inflows and reshape global capital markets in the coming years.

Jianwen Zhang argues that CSCI can make an ideal partner for international investors as they increase investment allocation to China. CSCI’s complete and real-time database for China’s capital markets, credible and intelligent credit evaluation model, effective price discovery, and thought leadership from more than 200 credit analysts, make us a one-stop access to China’s credit bonds.

APRIL 17 2019 – Credit-tech, a highly specialized area of fintech, has significant potential to disrupt the financial industry and will have profound impacts on the credit services providers and credit market especially, according to a new report by Oliver Wyman and China Securities Credit Investment (CSCI).

The report, entitled Technology-driven value generation in credit-tech, reveals that the three layers of China’s credit market – credit assets, credit services, and credit IT – will see significant new business opportunities emerge over the next 5 years benefiting from the credit-tech driven innovations.

Exhibit 1: China’s credit market structure and market size of credit-tech

Layer 1: Credit assets

The report estimates that issuance volume of credit asset in China is expected to grow from 57 trillion yuan in 2018 to 80 trillion yuan in 2022, of which, credit-tech will contribute 54% (43 trillion yuan) in 2022. The strong growth momentum is a result of the gradual expansion of credit services to long-tail customers, including individuals and MSEs that had difficulties in obtaining financing from traditional financial institutions without the solutions provided by credit-tech. As more credit assets are issued, the outstanding balance of credit assets is expected to increase from 144 trillion yuan in 2018 to 195 trillion yuan in 2022, 68 trillion yuan of which will be driven by technology.

The credit trading market is projected to grow from 136 trillion yuan in 2018 to 239 trillion yuan in 2022, 183 trillion yuan of which will be driven by credit-tech. The continuous maturation of both the public and private trading markets will become the major growth driver, and Oliver Wyman expects the contribution of private trading market is more significant. Traditionally, transactions of non-standard assets are difficult to be executed. In the future, however, private trading platforms will be established to increase the transparency of underlying assets, thus boosting the trading volume of non-standard credit assets. The contribution of private market transactions will increase from 16% in 2018 to 24% in 2022.

Layer 2: Credit services

For credit services, the annual revenue will increase from 368 billion yuan in 2018 to 1,034 billion yuan in 2022. Of which, revenue generated by credit-tech will reach 431 billion yuan in 2022, representing 42% of the total amount, indicating a CAGR of 163% from 2018. The credit services market is closely linked to the credit assets market, and most of the service revenue derived from credit-tech services will be related to outstanding balances and new issuances of credit assets.

Layer 3: Credit IT

As the basis and foundation of credit market, credit IT companies help credit-servicing companies improve operational efficiency and service quality by developing credit systems, which is expected to experience an increase in revenue from 9 billion yuan in 2018 to 49 billion yuan in 2022.

“Under the traditional market practices of credit market, companies are required to have solid financial credentials or large scale of assets in order to obtain financing, which has become increasingly inefficient for MSMEs since MSMEs need flexible ways of financing in order to cope with their business needs in China’s changing economic dynamics,” said Cliff Sheng, Oliver Wyman partner and author of the report. “However, startups including CSCI and WeBank are making it easier for companies to obtain financing by leveraging technology to better identify underlying risks, which provides an efficient and scalable solution for MSMEs to thrive.”

The report also identifies the impacts credit-tech has on the three layers of the credit market in three stages: upgrade, innovation, and disruption (Exhibit 2). Technologies such as the internet, mobile communications, artificial intelligence (AI), blockchain, cloud computing, and big data analytics will reshape and disrupt the financial industry, and will have profound impacts on credit service providers and credit market especially.

Exhibit 2: Impact of credit-tech on credit-related markets

According to Cliff Sheng, in China, key drivers of the credit-tech market are macro-economic factors including the fast-growing financing volume and structural reform of the macro-economy, improving market maturity and efficiency as a result of regulation, and the development of new technologies such as AI, blockchain, cloud and big data. While the main players in the market are traditional financial institutions, fintech players, and technology companies, the report also underlines that only those companies with the following characteristics can be successful:

• Strong integration across technology, business know-how, branding, and resources
• A market-oriented operating model
• An internet start-up culture
• Competitive talent propositions and incentive schemes.

Together these will set apart the eventual winners excel its peers and capitalise on the opportunities arising from the new technologies and become pioneers of sector over the next 5 years.

About the report
The report titled Technology-driven value generation in credit-tech provides an overview of the credit-tech market in China and discusses how credit-tech will reshape and disrupt the financial industry, especially for the credit services providers and credit market. The first section defines credit-tech and shows its main impacts on the three layers of the credit market: credit assets, credit services, and credit IT. The second section provides an in-depth analysis of the credit-tech market in China and quantifies the potential impact of credit-tech. Firstly, the addressable market size of the three layers of credit market were identified. Then, the respective market size driven by credit-tech was calculated. The report also highlights the key success factors for leading credit-tech players.

Link to download the full report:
https://www.oliverwyman.com/our-expertise/insights/2019/apr/china-credit-tech-market-report.html

About Oliver Wyman
Oliver Wyman is a global leader in management consulting. With offices in 60 cities across 29 countries, Oliver Wyman combines deep industry knowledge with specialized expertise in strategy, operations, risk management, and organization transformation. The firm has more than 5,000 professionals around the world who work with clients to optimize their business, improve their operations and risk profile, and accelerate their organizational performance to seize the most attractive opportunities. Oliver Wyman is a wholly owned subsidiary of Marsh & McLennan Companies [NYSE: MMC]. For more information, visit http://www.oliverwyman.com. Follow Oliver Wyman on Twitter @OliverWyman.

About CSCI
CSCI is a leading integrated credit-tech services provider. Empowered by its technology, CSCI establishes credit infrastructure services throughout the credit asset life cycle. CSCI offers tailored solutions for its clients, which helps reduce the cost of credit risk management, lower credit asset investment risk and increase credit asset turnover rate. For more information, visit https://www.chinacsci.com/en/

In order to cultivate the development of credit service institutions and credit service market and accelerate the construction of social credit system, on October 31st the Office of the National Development and Reform Commission (referred as “NDRC”) issued a circular on “Promoting the pilot work of the integrated credit service institutions” (No. 2018-1343). First 26 professional institutions were identified to participate in the pilot program of integrated credit service institutions, and China Securities Credit Investment Co., Ltd. (referred as “China Securities Credit Investment” or “company”) was successfully selected.

In the early March this year, NDRC issued a circular on ” Fully mobilizing credit service institutions to accelerate the construction of social credit system” (No.2018-190),  with the plan to explore a pilot program for credit service institutions in the focused industries and regions.

As a China’s leading credit-tech service provider, China Securities Credit Investment aims to build an infrastructure that serves the entire life cycle of credit assets (asset generation – asset trading and exchange – asset management). Empowered by proprietary technology, we provide integrated services that cover the entire credit value chain, from credit risk management, credit enhancement, to credit asset trading services and management，which help to reduce the cost of credit risk management, accelerate credit asset circulation, mitigate the risk of credit asset investments, and facilitate the development of real economy.

Being successfully selected as the first batch of integrated credit service institutions named by NDRC, indicates that the company’s credit technology service capabilities has been affirmed and recognized by the government departments. As a selected institution, China Securities Credit Investment will play an active role in delivering our expertise and advantages, promoting the construction of social credit system and meeting the demand for market-oriented credit services. The company is committed to exploring various fields of application including the credit information collection, processing, and evaluation, the commercial application of credit big data, credit services in the public administrative management scenario, etc. China Securities Credit Investment will adhere to the spirit of professionalism, and resolutely implement the objectives of the requirements, using our high-quality services to promote the first batch of integrated credit service institutions pilot program.

On October 11, 2018, the award ceremony of “2018 Deloitte Shenzhen High-tech High-growth Top 20 and Deloitte-Shenzhen Star of the Future” hosted by Deloitte China and Shenzhen Business Federation was held in Shenzhen, with more than 100executives, industry leaders, VC/PE partners from high-growth high-tech enterprises attended the event. China Security Credit Technology  Co., Ltd., (referred as CSCT), a subsidiary of CSCI, won the “2018 Deloitte-Shenzhen Star of the Future” award for its innovative business model and strong development potential. The same batch of award-winning enterprises also include NetScience Technology, Weizhong Tax Silver, and Obi Zhongguang.

According to the organizer, the selection has been held for five years. This year’s selection is based on the theme of ‘from unicorns to stamina – from fineness to excellence’, it comprehensively assessed applicants’ innovative capabilities, business models, products and technologies, and core management teams. After three to four months of open and rigorous field trips and expert review, the panel of experts selected the final list, aiming to identify and recognize the uniquely innovative and fast-growth science and technology enterprises in the Shenzhen region. In the past years, the companies that won the “Shenzhen Star of the Future” award included FenQiLe, Samoyed Financial, and DaDa Bus, etc.

Ms. Pan Lin, President of CSCT, was invited to attend the awards ceremony and participated in the roundtable forum on the theme of “New Trends in Financial Technology”, discussed with Chen Lei, the Chief Strategy Officer of HanDe Group, Shi Wei, the General Manager of VZOOM Credit, Li Xing, the CTO of Shengye Capital. When talking about the development of breakthrough technology in the field of financial technology in the past three years, Pan Lin said that CSCI has always adhered to the strategy of driving finance with technology. Since the beginning of last year, CSCT has been investing in the blockchain, artificial intelligence, etc. The concept of building a credit bridge for the investment side and the asset side of the consumer finance eco-chain has been adhered, the credit technology has been implemented in a down-to-earth manner to help the development of high-quality credit companies. Over the past year, the company’s main  business partners such as 51 Credit Card, Yixin Group, WeixinJinke, etc. have achieved IPO, which is also a great affirmation of the value of CSCT.

On October 9-10, 2018, the “2018  Trusted Blockchain Summit” jointly sponsored by China Institute of Information and Communication, and China Communications Standards Association was held in Beijing. The evaluation results of the first batch of trusted blockchain products in 2018 were released. China Securities Credit Investment’s blockchain product “Hyperledger Fabric-Based Financial Blockchain Service Platform” has been evaluated by experts and industrial peers, in the dimensions of product function, product performance and stability, the product won the unanimous approval of peers and has become one of the first platforms to pass the certification test.

As an emerging technology, the blockchain faces problems such as lack of standards and immature underlying technologies. For this reason, China’s ICT along with 158 ​​companies launched the “Trusted Blockchain Promotion Plan” to accelerate the construction of trusted blockchains standard system. Under the joint promotion of all parties in the industry chain, the “Trusted Blockchain Promotion Plan” completed the formulation of the first trusted blockchain standard in China and completed the standard testing of each blockchain product of the registered enterprises. In this 2018 trusted blockchain standard evaluation, 42 manufacturers signed up for testing, and finally 20 manufacturers passed the initial screening, only 14 of which passed the certification test in one trial.

Zhang Zhe, general manager of  online product business unit at China Securities Credit Investment, said at the summit that as a leading credit-technology service provider in China, we are committed to helping the entire life cycle of credit assets (asset generation – asset trading – assets) through technology-driven management and distributed credit infrastructure. Our integrated solution  reduces the cost of credit risk management, improves the efficiency of credit asset liquidity, and resolves the risk of credit asset investment by providing customers with credit risk management, credit enhancement, credit asset transaction management and other full credit value chain services. The blockchain technology, as a technology that builds a multi-party trust system, has become an infrastructure in the field of credit technology in China, and placed in a variety of business scenarios, and began to export.

This year, China Securities Credit Investment’s blockchain products are accelerating the launching of the scenario applications, and a number of scenarios based on blockchain aggregation of small and medium-sized micro-financial service platforms, supply chain finance, and regulatory technology.

As a leading credit-tech service provider in China, China Securities Credit Investment has officially joined the Linux Foundation and its super-book “Hyperledger” open source project. Hyperledger is an open source collaborative work developed to drive cross-industry blockchain technology. After joining the foundation and super-book project, China Securities Credit Investment will deeply participate in the international blockchain ecological construction and further promote the blockchain technology in the field of China’s credit technology.

Join the super-book to improve credit technology service capabilities

The Linux Foundation is a non-profit, international open source community dedicated to building sustainable ecosystems around open source code project. It accelerates technology adoption and industry adoption. The Superbookwas launched by the Linux Foundation in 2015 and currently has more than 250 members worldwide. The project aims to build an open, cross-industry ecosystem where members and non-members maintain a code library and framework based on blockchain technology.

After joining the super-book project, China Securities Credit Investment will actively participate in the technical cooperation and communication with project members. While improving the technical capabilities of the blockchain, China Securities Credit Investment will continue to promote the launch of blockchain technology in the field of credit technology, and will actively promote the communication and sharing of resources including coding techniques within the community, in order to reduce the threshold of blockchain application. In the future, CSCI will also participate in the code base and other technologies that contribute to the superbook.

Deeply rooted in the credit technology scenario and accelerate the launching of blockchain application

“As China’s leading credit-tech service provider, China Securities Credit Investment is committed to building an infrastructure that serves the entire life cycle of credit assets (asset generation – asset trading – asset management) through technology-driven. China Securities Credit Investment reduces the cost of credit risk management, improves the efficiency of credit asset circulation, and resolves the risk of credit asset investmentby providing the customers with credit risk management, credit enhancement,credit asset transactions and other full credit-value-chain services. All this is inseparable from the support of the underlying technology. Blockchain, Artificial Intelligence and Big Data services have become the troika in the China Securities Credit Investment technology strategy, and have been applied in many scenarios to export the technology capabilities and promote the development of the business.”

Chen Hao, Chief Data Officer of China Securities Credit Investment, further said: “We are very pleased to be a member of the Superbook. We have a professional team that studies blockchain technology and industry applications. We are looking forward to communicating and cooperating with other Superbook members, and exploring the blockchain’s innovative use in the business, especially in the credit technology field.”

HONG KONG, 4 July 2018. Pengyuan International has assigned a first-time global-scale long-term issuer credit rating (LTICR) of ‘A-’ to CMB International Capital Corporation Ltd (CMBI) with a Stable Outlook. The rating is based on a standalone credit profile (SACP) of ‘bbb-’ and our view of China Merchants Bank Co Ltd (CMB)’s extremely strong willingness to provide extraordinary support to CMBI in the event of financial distress.

The rating reflects CMBI’s strong market recognition, well-seasoned management, prudent business model, and resilient financial profile. In addition, the rating considers the extraordinary operational and financial support from the company’s parent, CMB. In our view, CMBI’s overall creditworthiness is closely linked with that of CMB, given the former’s status within the group.

These strengths are partially offset by the procyclicality of CMBI’s business, limited scale in a highly competitive market, and relatively short track record as it continues to ramp up its capabilities across major product lines. While we expect the company to maintain a robust capital level in 2018-2020, we believe management will have to navigate an increasingly challenging operating environment as capital market volatility remains elevated.

Key Rating Factors

Positive

Strong market recognition. CMBI has received wide market recognition in recent years, especially in its corporate finance business, where the firm ranked no. 1 in IPO underwriting in Hong Kong in 2017. We attribute such success to the CMB brand name, as well as revenue synergies with the bank parent. The majority of CMBI’s corporate and retail clients originate from the bank’s onshore and offshore branch network.

Well-seasoned management. The firm’s management and board of directors consist of experienced professionals either sourced from CMB internally or from reputable financial institutions externally. At the operational level, revenue per employee indicates that the firm is running at an efficiency level comparable to well-established peers’ in the same space.

Prudent business model. We view positively management’s strategy to adopt an asset-light business model, which reduces the amount of risk the company undertakes with its balance sheet. This strategy is followed consistently across the major product lines.

Resilient financial profile. As a result of its business model, CMBI’s ROA is well above industry norms, although ROE has been on par with peers’ due to its low leverage. Our analysis suggests that even if the capital market environment weakens markedly, the company will be able to maintain a balance sheet that is consistent with the current rating. A key credit positive is the variable nature of many of CMBI’s operating expense items, of which staff compensation represents a major portion.

Negative

Procyclicality. Despite its conservative financial profile, CMBI’s businesses are necessarily procyclical and would be subject to volatilities in the capital markets on both the asset and funding sides. These potential fluctuations are mitigated by high fee and commission income contributions to a certain extent.

Limited operating scale.

CMBI accounts for less than 1% of CMB’s revenues, net profits, assets, and shareholders’ equity. We anticipate that the company will gradually ramp up its scale in 2018-2020, but its size will likely remain a source of potential vulnerability in what we consider to be a highly competitive operating environment.

Relatively short track record.

While CMBI has been a part of the CMB group since 1998, it was not until 2015 that the company began to grow its book of business proactively. Revenues have surged in the last 2-3 years and the firm is still in the process of building up its capabilities in areas such as institutional sales and trading.

The Stable Outlook reflects our view that CMB’s capability and willingness to support CMBI are unlikely to change in the next 12-24 months. We believe that CMB’s willingness to support CMBI will remain extremely strong over this period.

We would consider downgrading CMBI’s rating if:

• CMB’s creditworthiness deteriorates significantly; or
• We determine that the company’s importance to CMB has declined noticeably. This may be reflected in a change in CMBI’s ownership or in signs that indicate that support may not be forthcoming during times of financial distress. Such signs may include a withdrawal of funding arrangements by CMB or an assertion by management that the international securities and asset management operations cease to be integral to the bank’s long-term growth ambitions.

We would consider upgrading the rating if:

• CMB’s creditworthiness improves significantly.

CMBI’s standalone SACP of ‘bbb-’ is based on our four-pillar analysis:

Industry Structural Stability: We consider the Hong Kong securities industry to have high structural stability, driven by competitive but growth-conducive market dynamics, sound macroeconomic fundaments, well-developed banking system and capital markets, and a relatively robust regulatory environment.

Enterprise Risk Management (ERM): We believe CMBI has adequate ERM capabilities, supported by an appropriate strategic and risk framework, conservative asset-liability and business risk management, and improving operational risk management. However, we believe potential vulnerabilities may lie in the firm’s consistency in implementing its ERM policies as staff recruitment has occurred at a significant pace in the last 12-18 months. These vulnerabilities may be exacerbated by continued expansion into new product categories.

Capital Formation: We regard CMBI’s capital generation capacity to be strong, reflecting high earnings quality, an increasingly optimal return on capital profile, and a sustainable dividend policy. We expect to see ROE trending from the low- to the mid-teens as capital utilization becomes increasingly optimal, while ROA is forecast to be marginally lower as asset intensity rises from a low base.

Capital Adequacy: The company has an asset-light balance sheet management philosophy and, even as it continues to grow its revenues at a robust rate, we expect its capital adequacy to remain strong on an absolute basis and relative to its peers’. In particular, we expect the company’s economic capital / tangible assets (less client accounts) ratio to stay above 20% through 2020 (i.e. leverage of < 5x).

On the asset side, we expect the company to maintain manageable exposures in its own account, with proprietary trading positions, participation in higher-risk asset management products, margin lending, and structured finance loans representing a modest percentage of capital. CMBI’s funding and liquidity are also considered to be strong, with interest coverage expected to exceed 5x in 2018-2020 as per our definitions.

On April 27, 2018, the main activity of the series of activities of “Reform and Opening Again – New Platform, New Benchmarking, and New Action” in QianhaiShekou Free Trade Zone was held in the Qianhai Enterprise Mansion Pavilion. The Standing Committee of Shenzhen Municipal Committee and the director of QianhaiShekou Free Trade Zone Management Committee, Tian Fu, along with other leaders, attended the event. At the meeting, the report on the third anniversary of the establishment of the free trade zone was announced, and the awarding ceremony for the system innovation base, center and laboratory was held. CSCIwas awarded the title of “Institutional Innovation Lab” for its outstanding achievements in service supervision and technology, and was awarded an honorary plaque.

As a national capital market basic functional company, China Securities Credit Investment is committed to “data-driven, technology-led, and new-finance”, and actively explores the path of regulatory technology, and proposes solutions for regulatory technology needs in different scenarios, and China Securities Credit Investment has achieved unanimous approval of the relevant government departments.

When talking about Qianhai’s achievements in financial supervision and innovation, China Securities Credit Investment has been highly praised by the “White Paper” released on the event for its active participation in the construction of the first Shenzhen Private Equity Fund Information Service Platform, and its exploration in  “regulation, self-discipline, and service” model of “Internet + Big Data”. At the same time,  China Securities Credit Services Co., Ltd., a subsidiary of China Securities Credit Investment, effectively filled the industry gap and was widely recognized by pioneering the  big data-driven appropriateness management solution. The program helps investors to protect investors’ rights and interests while meeting the compliance requirements of regulators by comprehensively and dynamically assessing investor risk tolerance, real-time positioning and monitoring of investor appropriateness risks.

In addition, in response to the pain points and problems in the consumer finance sector, the company’s subsidiary,  China Securities Credit Technology Co., Ltd., tailored an asset risk management solution – “The asset risk management platform based on Tencentblock chainTrustSQL technology in the consumer finance scenario (云瞻).Relyingon the “sharing, consensus and shared support” features of the block chain,云瞻 platform realized the real-time penetration monitoring of the underlying assets from the “information, capital and equity” levels, further increased the credibility of the data, and was successfully selected as “2017 Trusted Blockchain Summit Excellent Application Case”.

In the future, China Securities Credit Investmentand its subsidiaries will continue to leverage on the company’s professional understanding of capital markets and credit, relying on rich, stable and high-quality credit data resources and professional technology to maintain innovation and mechanisms, and strive for greater contribution in financial technology and the regulation of technological innovation.