Financial Review
Highlights
Along with a good beginning of 14th Five-Year Plan and benefited from the joint efforts of financial and non- financial segments, in 2021, the Group achieved revenue of HK$708,936 million, representing an increase of 28% year-on-year and 25% on a comparable basisnote. Besides, the Group recorded profit attributable to ordinary shareholders of HK$70,222 million, representing an increase of 24% year-on-year.
The comprehensive financial services segment recorded a year-on-year increase of 12% and 20% in revenue and profit attributable to ordinary shareholders, respectively. Among which, CITIC Bank’s revenue exceeded RMB200 billion for the first time and recorded a year-on-year increase of 13.6% in profit attributable to its shareholders, achieving the highest growth rate in the past 8 years. CITIC Securities recorded a year-on-year increase of 55% in profit attributable to the shareholders of the parent company, further consolidating its leading advantages in the industry. CITIC Trust actively promoted its transformation and upgrading, and its net profit remained in the top three in the industry for fifteen consecutive years. CITIC-Prudential Life achieved double-digit growth in both premium income and net profit, further enhancing its comprehensive solvency margin.
The non-financial segments recorded a year-on-year increase of 40% in both revenue and profit attributable to ordinary shareholders. Among which, the advanced materials segment continued to promote stable production and increase production while reducing costs and increasing efficiency, and thus contributed to the largest growth in performance among the non-financial segments leveraging on the favorable opportunity of rising commodity prices. The advanced intelligent manufacturing segment increased its investment in research and development as well as scientific and technological innovation, the new consumption segment seized the opportunity of demand recovery after the COVID-19 pandemic, both segments achieved a substantial increase in net profit. The new-type urbanisation segment has completed the construction of the Winter Olympics Project in a high-quality manner and had practical achievements in the development of overseas markets, driving a better revenue growth. However, due to the tightening of macro policies in the real estate industry, it recorded a decline in net profit.
note：
The comparable basis refers to the assumption that CITIC Dicastal’s financial statements were consolidated for the whole year of 2020, while McDonald’s China’s financial statements were not consolidated for the whole year of 2020.
Earnings per share and dividends
Earnings per share of profit attributable to ordinary shareholders was HK$2.41 in 2021, an increase of 24% from HK$1.95 in 2020. As at 31 December 2021, the number of ordinary shares outstanding was 29,090,262,630.
At the forthcoming annual general meeting, the Board will recommend a final dividend of HK$0.456 per share to ordinary shareholders. Together with the interim dividend of HK$0.15 per share paid in November 2021, the total ordinary dividend will be HK$0.606 (2020: HK$0.488 per share). This equates to an aggregate cash distribution of HK$17,629 million.
Segment Results
Comprehensive Financial Services
|
HK$ million |
2021 |
2020 |
Increase/(Decrease) Amount |
% |
|---|---|---|---|---|
|
Revenue from external customers |
256,760 |
229,103 |
27,657 |
12% |
|
Net profit |
78,193 |
65,437 |
12,756 |
19% |
|
Profit attributable to ordinary shareholders |
52,075 |
43,516 |
8,559 |
20% |
|
Business assets |
10,050,873 |
9,113,747 |
937,126 |
10% |
In 2021, this segment achieved revenue of HK$256,760 million, with a net profit of HK$78,193 million and profit attributable to ordinary shareholders of HK$52,075 million, up by 12%, 19% and 20% year-on-year respectively.
CITIC Bank proactively promoted the asset-light transformation and strengthened the disposal of non-performing assets, and achieved revenue of RMB204,554 million, up 4.7% year-on-year, with a profit attributable to its shareholders of RMB55,641 million, up 13.6% year-on-year. Driven by the rapid growth of its wealth management and bank card business, non-interest income increased by 26% year-on-year, the proportion of which rose by 4.7 percentage points to 27.7%, making up the adverse impact of narrowing of net interest margin resulting from the downward impact of market interest rates. The asset quality has been improving, while the balance of non- performing loans (“NPL”) fell RMB5,993 million to RMB67,459 million and the NPL ratio declined 0.25 percentage point to 1.39%. Both the NPL balance and NPL ratio decreased simultaneously for the first time in nearly eleven years. The provision coverage ratio increased by 8.39 percentage points to 180.07% compared with the beginning of the year, hitting new record highs in nearly seven years.
CITIC Trust continued to promote its transformation and upgrading by reducing the scale of channel business
and financing business, as well as accelerating innovation and optimising the business structure. During the year, it achieved revenue of RMB8,585 million, slightly down 1.8% year-on-year. CITIC Trust actively strengthened asset quality and increased its provisions, and achieved profit attributable to the parent company of RMB3,501 million, a 9% decrease year-on-year, but still ranking second in the industry.
CITIC Securities, benefiting from improvements in capital market sentiment, achieved stable growth in each business and remained an industry leader in investment banking, wealth management and fixed income. It achieved revenue of RMB97,324 millionnote for the year, up 35% year-on-year, with profit attributable to owners of the parent company of RMB23,100 million, up 55% year-on-year, creating the best result since the establishment of the company. With the total assets reached RMB1.28 trillion at the end of the year, CITIC Securities is the only domestic securities company with assets over RMB1 trillion at present. Recently, the company completed a rights issue scheme amounting to approximately RMB27,330 million, which further replenished the capital and enhanced the capacity to resist risks.
Due to the increased contribution from its bancassurance channel by increasing coordination with CITIC Bank, CITIC-Prudential Life achieved premium income of RMB26,827 millionnote for the year, up 15% year-on-year. The investment return rate continued to increase as the size of assets under management represented a year-on- year increase of 37% to RMB175,300 million, contributing to a year-on-year increase of 16% in profit attributable to parent company to RMB2,899 million. CITIC-Prudential Life successfully issued a capital supplemental bond of RMB4 billion, representing an increase of the comprehensive solvency margin ratio to 261% after the issue, through taking advantage of the low market interest rates.
note:
CITIC Securities and CITIC-Prudential Life are both associates and joint ventures of CITIC Limited, which holds 18.45% and 50% equity interests respectively, without consolidating their financial statements.
Advanced Intelligent Manufacturing
|
HK$ million |
2021 |
2020 |
Amount |
Increase/(Decrease) % |
Comparable Basis % |
|---|---|---|---|---|---|
|
Revenue |
47,694 |
13,759 |
33,935 |
247% | 31% |
|
Net profit |
1,374 |
623 | 751 | 121% | 39% |
|
Profit attributable to ordinary shareholders |
632 |
453 | 179 | 40% | 40% |
|
Business assets |
66,837 |
58,719 | 8,118 | 14% | 14% |
The comparable basis refers to the calculation of fully consolidating CITIC Dicastal’s financial statements for the same period last year.
In 2021, this segment achieved revenue of HK$47,694 million, representing a year-on-year increase of 31% on a comparable basis, and net profit of HK$1,374 million and profit attributable to ordinary shareholders of HK$632 million, representing a year-on-year increase of 39% and 40%, respectively on a comparable basis.
By seizing the opportunity of recovery in the auto market, CITIC Dicastal’s sales of aluminum wheels achieved a year-on-year increase of 8%, contributing to a year-on-year increase of 23% in revenue to RMB31,995 million, with its sales ranking first in the world for thirteen consecutive years. CITIC Dicastal overcame adverse impacts of industry fluctuations and rising raw material prices and other factors and achieved profit attributable to ordinary shareholders of RMB1 billion, representing a year-on-year increase of 40%. CITIC Dicastal is dedicated to smart manufacturing for enhancing its high quality development, and strives to become the first selected company in the global vehicle wheel industry due to its Line 6 of aluminum wheels selected as “Lighthouse Factory”.
CITIC Heavy Industries achieved remarkable results in expanding incremental businesses such as offshore wind power and special materials, contributing to a year-on-year increase of 19% in revenue to RMB7,550 million and a year-on-year increase of 16% in profit attributable to ordinary shareholders to RMB227 million. CITIC Heavy Industries has maintained the growth trend by filling up orders and production tasks, actively implementing national strategies with investment of more than 6% in R&D for three consecutive years, achieving a number of breakthroughs in critical areas.
Advanced Materials
|
HK$ million |
2021 |
2020 |
Increase/(Decrease) Amount |
% |
|---|---|---|---|---|
|
Revenue from external customers |
282,422 |
195,754 |
86,668 |
44% |
|
Net profit |
21,137 |
11,463 |
9,674 |
84% |
|
Profit attributable to ordinary shareholders |
19,162 |
10,149 |
9,013 |
89% |
|
Total assets |
272,756 |
239,155 |
33,601 |
14% |
In 2021, this segment achieved revenue of HK$282,422 million, with a net profit of HK$21,137 million and profit attributable to ordinary shareholders of HK$19,162 million, up by 44%, 84% and 89% year-on-year respectively.
In response to the significant fluctuations in raw material prices and the impact of the "Dual Control of Total Energy Consumption and Energy Intensity" policy, CITIC Pacific Special Steel actively optimised its product structure, adjusted product prices in a timely manner, and continued improvements in operating efficiency and ongoing cost control efforts, and was able to record a 4% year-on-year increase in sales of special steel to reach 14.53 million tonnes. CITIC Pacific Special Steel recorded revenue of RMB97,332 million with a profit attributable to ordinary shareholders of approximately RMB8 billion, representing a year-on-year growth of 28% and 32%, respectively, both hitting record highs. The company has recently issued convertible bonds with a principal amount of RMB5 billion, the proceeds of which will be used mainly for product upgrades and renovation.
In 2021, Sino Iron shipped more than 21 million wet metric tonnes of concentrate to CITIC’s special steel plants and other steel mills and achieved a profit of US$950 million for the reporting period, 121% more than in 2020. The result was primarily due to a combination of higher iron ore prices and an ongoing focus on cost control and operating efficiencies.
CITIC Metal recorded revenue of HK$137,697 million with a profit attributable to ordinary shareholders of HK$2,112 million, representing a year-on-year growth of 56% and 22%, respectively. In particular, revenue from the trading business increased by 56%, the core product Niobium continued to maintain a solid market advantage and accounted for 83% of the domestic market share, the iron ore trading amounted to 54 million tonnes, ranking at the forefront in the industry. Profit from investment business increased by 26% year-on-year, mainly due to a 2.6 times increase in profit from the Copper Mine Project in Peru driven by high copper prices and a gain of HK$300 million from the disposal of 1.19% equity interest in Western Superconducting Technologies Co., Ltd (西部 超導公司).
With rising oil prices, CITIC Resources actively implemented measures to stabilize production, with a 6.2% growth in interest crude oil production and a 72% increase in the average selling price, the crude oil business achieved a profit of HK$739 million and thus turned the company’s overall loss into profit. The interest-bearing debt ratio fell to a near 10-year low of 28.8% during the reporting period as a result of the repayment of interest-bearing liabilities with its own funds.
The Ligang Power Plant, in which CITIC Pacific Energy has an investment, grew by 18% and 7.5% in generation capacity and on-grid tariffs, respectively year-on-year. Revenue was HK$12,058 million, an increase of 37% year-on-year. However, the sharp rise in thermal coal prices led to a deficit in the power generation business, with profit contribution falling 64% year-on-year to HK$256 million. As the market-oriented electricity reform progresses, the company’s profitability will gradually recover.
New Consumption
|
HK$ million |
2021 |
2020 |
Amount |
Increase/(Decrease) % |
Comparable Basis % |
|---|---|---|---|---|---|
|
Revenue from external customers |
65,564 |
70,056 |
(4,492) |
(6.4%) |
7.6% |
|
Net profit |
2,366 |
1,278 |
1,088 |
85% |
50% |
|
Profit attributable to ordinary shareholders |
1,610 |
894 |
716 |
80% |
80% |
|
Business assets |
72,055 |
76,157 |
(4,102) |
(5.4%) |
(5.4%) |
The comparable basis refers to the calculation without consolidating McDonald’s China’s financial statements for the same period last year.
In 2021, this segment achieved revenue of HK$65,564 million, with a net profit of HK$2,366 million and profit attributable to ordinary shareholders of HK$1,610 million. This represented a year-on-year increase of 7.6%, 50% and 80% respectively on a comparable basis.
CITIC Press recorded a year-on-year increase of 9.2% of net online sales revenue from self-run book publishing business, effectively compensating for the impact of increased channel discounts, and recorded revenue of RMB1,922 million for the year, which was basically the same as that of the previous year. However, the profit attributable to ordinary shareholders decreased by 14% to RMB242 million due to the impact of fierce price competition in the book market.
Dah Chong Hong achieved a strong performance of the premium brand vehicle business in mainland China and the commercial vehicle and yacht business in Hong Kong, becoming the exclusive logistics provider for COVID-19 vaccine in Hong Kong. It recorded a year-on-year increase of 8.5% in overall revenue to HK$53,541 million and a significant increase of 304% in profit attributable to ordinary shareholders to HK$550 million.
CITIC Telecom International recorded a year-on-year increase in revenue of HK$636 million from mobile device sales, compensating for the impact of the decline in corporate business and mobile business and leading to a year-on-year increase of 6.3% in overall revenue to HK$9,486 million and a year-on-year increase of 5.2% in profit attributable to ordinary shareholders to HK$1,076 million.
New-Type Urbanisation
|
HK$ million |
2021 |
2020 |
Increase/(Decrease) Amount |
% |
|---|---|---|---|---|
|
Revenue from external customers |
56,366 |
44,224 |
12,142 |
27% |
|
Net profit |
8,280 |
9,920 |
(1,640) |
(17%) |
|
Profit attributable to ordinary shareholders |
7,810 |
9,409 |
(1,599) |
(17%) |
|
Business assets |
349,907 |
309,736 |
40,171 |
13% |
In 2021, this segment realised revenue of HK$56,366 million, up by 27% year-on-year, a net profit of HK$8,280 million and profit attributable to ordinary shareholders of HK$7,810 million, both down by 17% year-on-year. The increase in revenue mainly arose from the engineering construction business, while the decrease in profit was mainly due to the fell in performance of the property development business caused by the tightened regulatory policies in the property industry.
Property development, operation and management companies such as CITIC Pacific Properties and CITIC Urban Development registered total revenue of HK$9,441 million and a profit attributable to ordinary shareholders of HK$6,361 million for the year, decreasing by 8.2% and 4.3% year-on-year respectively. During the year, its share of net profit from COLI’s equity recorded a year-on-year decrease. Apart from this, profits were mainly derived from the rental income from investment properties and the sales of projects such as Glorious Garden in Yangzhou, Optics Valley Xintiandi in Wuhan, Nove Mansion in Shanghai, and The Entrance at Ma On Shan, HK.
Construction and engineering companies such as CITIC Construction and CITIC Engineering achieved total revenue of HK$36,726 million, up by 42% year-on-year. However, an impairment provision on receivables for some projects was made because of the economic fluctuations and overseas COVID-19 pandemic. Without taking account of the impact described above, an operating profit of HK$2.1 billion was achieved, representing an increase of 11% year-on-year. Developing on Belt and Road markets, newly signed overseas contracts for the year were valued at US$4.13 billion.
The urban operation companies achieved total revenue of HK$11,044 million and a profit attributable to ordinary shareholders of HK$1,110 million for the year, up by 17% and 36% year-on-year respectively. The increase was mainly attributable to water treatment operations and proceeds from the disposal of equity investments.
