| Valuation method | Value, HK$ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | n/a | n/a |
| Intrinsic value (DCF) | n/a | |
| Graham-Dodd Method | n/a | |
| Graham Formula | 162.83 | 10612 |
Haitong International Securities Group Limited (0665.HK) is a comprehensive financial services provider operating as a subsidiary of Haitong International Holdings Limited. Founded in 1973 and headquartered in Hong Kong's Central district, the company delivers a full spectrum of financial products and services to corporate, institutional, and high-net-worth clients globally. The firm operates through five core segments: Wealth Management, Corporate Finance, Asset Management, Global Markets, and Investment. Its service offerings include securities brokerage, futures and options trading, investment banking services, asset management solutions, and proprietary investments across equity and fixed income markets. As a key player in Asia's capital markets ecosystem, Haitong International leverages its Hong Kong base to facilitate cross-border capital flows between China and global markets. The company's integrated platform positions it to capitalize on the growing wealth management needs in Greater China and the increasing internationalization of Chinese capital markets.
Haitong International presents a high-risk investment proposition following a challenging FY2022 that saw significant financial deterioration. The company reported a substantial net loss of HKD 6.54 billion on negative revenue of HKD 3.17 billion, reflecting severe operational headwinds in the capital markets sector. With negative operating cash flow of HKD 3.99 billion and elevated total debt of HKD 47.06 billion against cash reserves of HKD 5.15 billion, the company's financial stability is concerning. The suspension of dividend payments further diminishes investor appeal. While the company's Hong Kong positioning provides potential exposure to China's financial market liberalization, current financial metrics indicate significant distress. Investors should carefully assess the company's ability to navigate market volatility and execute a turnaround strategy before considering investment.
Haitong International operates in the highly competitive Asian capital markets landscape, where its competitive positioning is challenged by both global investment banks and larger regional players. The company's primary competitive advantage stems from its affiliation with Haitong Securities, one of China's largest securities firms, providing potential access to Chinese corporate clients and cross-border deal flow. Its Hong Kong headquarters positions it strategically as a gateway for China-related capital markets activities. However, the company faces significant scale disadvantages compared to global bulge bracket banks that dominate the upper echelon of investment banking in Asia. In wealth management, Haitong International competes with both international private banks and larger Asian financial institutions that have greater scale and product capabilities. The company's 2022 financial performance indicates severe competitive pressures, with negative revenue suggesting potential client attrition or significant trading losses. Its ability to differentiate through specialized China knowledge may be offset by operational challenges and balance sheet constraints that limit its capacity to compete for large mandates or sustain market-making activities during volatile periods.