The Quam Story
Quam Limited ("Quam", and with its' subsidiaries, together referred to "Quam Group"), previously known as Wah Fu International Holdings Limited, was listed on The Stock Exchange of Hong Kong Limited in 1997 (Stock code: 00952).
As we celebrate Quam Limited's 10th anniversary in 2010, it seems appropriate that we look back at how the company has evolved into an enterprise with a strong strategic focus on the China market. When we established the Quam Group in 2000, we had a vision to create a people-centric organization that could provide quality financial services to the new wealth of Hong Kong and China.
We wanted the Quam Group to be an organization that companies and individuals could trust for market intelligence, advice and tools that they needed to make the right financial decisions and to act upon them. We made sure that our commitment to serving clients was enshrined deeply in our corporate ethos by aligning our interests with theirs and avoiding business activities that may lead to conflicts of interest.
Today, almost a decade on, we are proud to say that the Quam Group has taken enormous strides towards becoming the enterprise we envisaged. This progress can be evidenced by our widening range of product and service offerings, our growing reputation and brand, our expanding operations and crucially our evolving role as a facilitator or bridge for the flow of investment from China to the rest of the world and vice versa.
The Quam Group is uniquely positioned among the mid-tier financial services firms serving the Hong Kong and China markets, with a full complement of services, including securities broking, corporate finance and advisory, investment advisory, asset management, wealth management and private equity. Our competitive edge is underpinned by a significant and growing presence in five Mainland cities, including Shanghai, Shenzhen, Ningbo, Shenyang and Suzhou. We are also planning to extend our presence to Beijing, Chengdu, Hangzhou and Dalian.
Hence, we have cultivated a global footprint through our membership in M&A International ("MAI") and more recently in Global Alliance Partners ("GAP"). The latter, a worldwide network of like-minded financial services providers which spans strategic markets in Asia, the Middle East, Europe, Africa and North America, allows us to offer our Chinese clients cross- border capabilities in capital raising, securities trading, research, and fund management. GAP recently added two new members from Africa and the United Kingdom respectively, which further extends our reach into worldwide markets.
Quam continues to be a China pioneer. The Group identified China as a core focus as early as 2004 and has been finding innovative ways to carve out a presence in the country ever since. While many of our competitors have chosen to sit on the sidelines and bemoan China's highly regulated business environment, the Group has worked proactively to establish strategic Mainland partnerships, increase its visibility, and develop business opportunities across the border from Hong Kong.
Quam Securities exemplifies the Group's ambitions to be a conduit between China and the world. In the past 18 months, the institutional sales team has evolved and adopted a more proactive approach to doing business. The department has strengthened its research capabilities and is dedicated to conducting quality, on-the-ground research in China to generate investment ideas in a diverse range of industries, including gold mining, offshore rigging, rare metals, oil storage and media. At the same time, it is actively marketing its investment ideas to institutional investors to expand its distribution capabilities.
On the private client side of the business, Quam Securities is taking advantage of the Mainland's wealth explosion. As affluence in China has grown, Hong Kong's securities brokerage industry, which offers greater access to global financial markets, has inevitably benefited. Quam Securities leverages this trend by raising its profile in the Mainland through its Shenyang representative office, promotional activities, seminars, workshops and trade events. It has also been building up its IT systems and infrastructure to support cross- border business.
Cultivating relationships in the Mainland and over time transforming them into solid business partnerships is another way the Group has been increasing its exposure to China. Last year, the Group reached an important milestone by forming a joint venture private equity fund with China's state-owned Suzhou High-Tech Venture Capital Group. Backed by the Suzhou municipal government, the fund is targeted to raise RMB71,000,000 to invest in high-growth Chinese technology companies, which have a strong possibility of listing within two years.
Meanwhile, Quam Asset Management's managed fund is also performing well. With strong local investment management expertise, the hedge fund outperformed its Greater China equity long-short benchmark during the financial year and exceeded its pre-crisis high-water mark recorded in October 2007.
On the corporate finance side, Quam Capital has continued to expand and cultivate a reputation as one of the leading local advisory firms serving medium- sized Chinese companies. In the past calendar year, the business unit has added a new IPO team. This made an immediate positive impact on the business volume and deal pipeline.
The IPO business has been particularly encouraging. With the new team's own network and capabilities, the corporate finance business unit has never been better placed to tap into China's flourishing mid-cap IPO market. Indeed last year, the team doubled its IPO business in dollar terms and sponsored an offering which was about 300 times oversubscribed.
Leveraging its international experience, Quam Capital augmented its local capabilities and global reach through the MAI alliance, which strengthened its position in the middle market. Given that China now accounts for 25% of the world's M&A activity and 56% of that activity is outbound M&A, we are sanguine over the division's prospects.
Quam Wealth Management ("QWM") is also looking to gain exposure to affluent Mainland investors through the Capital Investment Entrant Scheme ("CIES"). The scheme allows Mainland Chinese nationals with permanent overseas residency and are willing to invest HK$6,500,000 in real estate and financial assets in Hong Kong, to become a permanent resident of the Special Administrative Region. With its broad range of wealth management services, including locally authorized and offshore funds, portfolio management services, and insurance broking, the division is well placed to help eligible Mainland investors manage their investments in Hong Kong. QWM has launched a service to assist them with their CIES applications. In recent times, it has also been working with Quam Securities to raise the Group's brand visibility in the Mainland through seminars and aims to increase its collaboration with other divisions in the Group.
Quamnet has also been ramping up its presence and content offerings for the Mainland market in recent times. The business unit has built an impressive distribution network for its free content and research through partnerships with top-ranked sites like Baidu.com, QQ.com, SINA, and www.p5w.net. It has also launched a new daily Putonghua video market commentary service featuring prominent analysts and journalists. This is professionally produced in Shenzhen. Meanwhile, Quam IR has established a reciprocal partnership with one of China's leading investor relations companies, which will provide its clients greater exposure to the Mainland investment community.
As the Group continues to evolve into a leading mid-market financial services company, which serves as a conduit between the financial markets of China and the world, the challenge for us is to develop the seamless infrastructure necessary to support cross-border activities and our expanding customer base. There are three areas in which we have already invested heavily: our talent pool, our IT systems for better execution and business integration, and our compliance function. As we look ahead, we will need to add even more expertise to our workforce and upgrade our technology infrastructure, as we continue to expand our presence in China.