Content of business

 

(I) Business activities

1.     Principal business activities
(1)    Securities broker
(2)    Proprietary securities dealer
(3)    Securities underwriter
(4)    Futures merchant (H401011)
(5)    Futures introducing broker (H408011)
(6)    Trust (H105011)
(7)    Other business activities approved by the competent authority

 

2.     Business weightage (consolidated)

3.     The Company’s existing products (services)

 

(2) Proprietary trading: Main services:

Trading of public listed securities issued in the domestic market, and investments in overseas securities approved by the competent authority, using proprietary capital, and aiming to pursue “absolute profit” and “positive return”. The main investment products include:

A. Securities listed on Taiwan Stock Exchange and Taipei Exchange.

B. Securities traded at overseas exchanges approved by the competent authority.

C. Domestic and foreign futures and options.

D. Other instruments permitted by law or by the competent authority.

 

(3)Fixed income:

A. Outright purchase and sale of government bonds, corporate bonds, and convertible bonds.

B. Brokerage and underwriting of corporate bonds, bank debentures, and securitized assets

C. NTD and foreign currency-denominated repurchase agreements

D. Trading of interest rate futures and options associated with R.O.C. government bonds.

E. Trading of interest rate swaps and derivatives.

F. Convertible bond asset swap.

G. Trading of international and foreign bonds.

 

(4)Capital market:

A. Assist and guide corporations to their public listing on TWSE or TPEx, or recommend their registration to the Emerging Stock Market.

B. Securities underwriting for TWSE/TPEx listed companies.

C. Consultation on offering of securities on TWSE/TPEx and raise of capital in Taiwan for overseas corporations.

D. Handle offshore securities underwriting business outside the ROC.

E. Corporate financial consultation services.

F. Agency and consultation of securities administration affairs.

 

(5)Derivatives:

A. Trading of warrants

B. Trading of structured products

 

(6)E-Commerce:

The Internet and mobile devices have become important tools to provide information and services in daily life. The Company offers a wide variety of e-services to satisfy different needs of investment and wealth management for our clients and provide the online platforms as follows:

 

A.Trade website: It is a portal that incorporates trading features for securities, futures, options and sub-brokerage service. Navigation and interface have been consistently designed to give customers easy access to complete information across a broad product range on a single platform. If any new product or new market is enrolled, the customers do not need to spend extra time in learning and getting used to it because of the same layout on the website. A "New User Guide" has been introduced to help new customers choose, install and utilize the digital platform, so that they may commence trading as soon as their accounts are opened. In the future, the exchange website is expected to be viewed and used on smart electronic devices, and the back-up support and diversification of various platforms may be achieved.

 

B.Upgrade of sub-brokerage service: the Company provides customers with an optimized online sub-brokerage trade platform that not only is easy to use, but has the ability to integrate international stock quotes, technical analysis, and trade/market/account information all in one screen. Combined with the use of push messages and mobile technologies, the Company gives customers full control of their investments anytime, anywhere, without time or border restrictions.

 

C.Wealth management website: by integrating functionalities such as fund search, financial news, investor education, trial calculation, online fund quotation, price reminder, electronic trading, securities lending trust and trust account management, the Company is able to assist and guide customers toward improving their decision making abilities and achieving financial goals.

 

D.HTS application: customers' one-stop solution to the quotation and trading of securities, futures, and options; the application offers many varieties of order placement method, quotation format, technical analysis and customized trade criteria such as time, volume and price that will satisfy customers' every need. Add the function of ordering Emerging stock in order to expand product categories comprehensively; and provide an application environment for customization that allows investors to compose a favorite screen and that meets the ordering and observing habit of the customers. Furthermore, the unique data compression technology used in HTS facilitates immediate transmissions of massive data to the client terminals.

 

E.HTS2 application: JihSun has developed a proprietary software that incorporates quotation and trading functions for a broad range of instruments including securities, futures and options. It adopts a new-generation interface and menu design that offers great user friendliness and enables investors to place orders with ease. Featuring a flexible quotation layout and JihSun's exclusive online news, the application delivers unprecedented service quality.

 

F.Software trading system (STS): STS is currently the only professional program trading system available that allows customers to configure their own programs, buy/sell signals, and stock selection logics free of charge. It offers the best support to investors' trading strategies.

 

G. JihSun XQ: In order to provide the business unit with more powerful competitiveness, the Company delivered the most prevailing XQ software for reading the tape and placing order in the same trade to enable customers to transfer business free from interruption, and make investment and manage wealth more easily by virtue of other peripheral services provided by JihSun Securities.

 

H. Automated voice order placement: The nationwide hotline uses automated voice to guides customers through layered menus, which helps familiarize them in their first-time use.

 

I.Mobile order placing: Following JihSun WTS III which works on any smart phone with any carrier, it introduced the latest WTS V ahead of the others in the same trade, which is applicable to various smart phone, various phone numbers and various telecommunication service providers, and supports various operating systems, including Android, iOS and Windows Phone. Apart from providing convenient service of mobile real-time stock quotes, it also provides a secure environment for order placement through encrypted electronic certificate/signature. In addition, new features such as sub-brokerage, overseas futures quotation/trading and mobile certificate download are being added to the system, thereby giving customers access to more value-adding mobile services.

 

J.Mobile push Service: The pioneering “JihSun online” app highly customized message push service allows customers to subscribe the instant personalized information of trade, service, and marketing. The applied programs of JihSun (JihSun SMART / WTS / Warrants World / JihSun Bank) are integrated to provide diversified information simultaneously. Combined with the use of SMART (program trading), customers are able execute stop-loss and stop-gain orders and access a broad variety of mobile finance services without having to keep track of market movements.

 

K."Wise Lion" bot: A 24-hour, 365-day customer service robot that serves customers outside office hours in ways that the conventional 0800 hotline can not. JihSun's Wise Lion delivers several advantages such as login-free, fast response, customized/human-like service etc that raises the efficiency and quality standard of digital service.

 

L."JihSun Online Account Opening": Since the launch of Digital Banking 3.0, an increasing number of over-the-counter services are being offered online instead. With the introduction of "Online Account Opening," JihSun became one of the first securities firms to allow customers to "open an account at home" following the recent deregulation. From now on, customers are able to open accounts anytime, anywhere using smartphone APP.

 

 

4.     New derivative instruments and services planned in the future

(1)    Brokerage:

 

A.Brokerage services:

Expand business in support of the authority's stock market policies

a. JihSun will be making adjustments to its physical offices in 2017, such as leasing out office space or consolidating multiple offices or resources. These changes are intended as a means to improve competitiveness, given the rapid development of digital technologies, changes in the securities business environment, increasing percentage of electronic trades, and lesser needs for investors to visit branches in person. Existing branches will be adjusted in a manner that complements the group's differentiated service strategy to serve customers of certain attributes, and may not even provide brokerage service at all. This arrangement has the benefit of improving service efficiency and maintaining flexibility of business operations.

 

b. The Financial Supervisory Commission will be permitting securities firms to set up centralized phone hubs to collectively process orders placed via telephone, which may help financial service providers re-allocate human resources for more advanced financial services. JihSun has made plans to develop its own centralized phone hub in 2017, using as few people as possible to process manual orders, while at the same time promote electronic trading and assist sales representatives with their transition.

 

c. Support of new services introduced by Taiwan Depository & Clearing Corporation: JihSun will be launching a mobile securities passbook in 2017 that enables investors to access information such as account transactions, shareholder meetings of TWSE/TPEx listed companies, dividends etc using their cellphones. This innovation will save the Company the manpower and cost of processing passbook updates and maintaining passbook machines. In addition, the Company will continue to expand its anti-money laundering search system to ensure more robust check of customers' identity.

 

d. Support of after-hour futures trading by Taiwan Futures Exchange: in order to provide traders with broader access to hedging instruments, JihSun will assist Taiwan Futures Exchange in the establishment of an after-hour futures trading platform. After-hour trading will begin immediately after normal trading hours until 5am the next morning, which is consistent with practices of world's major markets. TAIEX futures, TAIEX options and USD/CNY futures and options are the initial instruments to be made available for after-hour trading. Taiwan Futures Exchange expects to implement this system after May 2017 by the earliest.

 

e. As part of the government’s Bank 3.0 policy, TWSE will be allowing securities firms to deliver contracts and documents to investors in digital form using electronic tokens, while password slips can also be delivered digitally. As a result, JihSun will be able to complete account opening procedures entirely over the Internet without having customers visit branches in person, and allow them to join the trade action in the shortest time possible.

 

B.International markets:

a. The launch of offshore securities unit (OSU) enables the group with broader and better quality services for high net worth customers local and abroad.

b. Broaden customers' investment selections with fixed income instruments that offer better yields than fixed deposit at relatively low volatility.

c. Promote offshore structured instruments as a solution to customers’ investment and asset allocation under the volatile market.

d. Engage world-renowned financial institutions in collaborative agreements to broaden product line and market exposure.

e. Keep in pace with world trends by enhancing the mobile service system.

 

C.Wealth management: Since the launch of trust service, the Company has devoted substantial resources to providing customers with comprehensive wealth management services. In support of the authority's FinTech initiatives, we shall continue to focus on the development of mobile securities services, including a mobile trading platform, through which customers may open account, transact, obtain investment information and access more professional, convenient and smart financial services using mobile devices. With regards to new business development, a more comprehensive customer relationship management (CRM) system will be developed to provide customers with more efficient asset allocation and better financial advisory services. In addition, services such as employee welfare trust and insurance benefit trust are currently being planned.

 

(2) Proprietary trading: Invest into overseas markets depending on the extent of deregulation. Apart from directional trading, the company will also develop strategic trading and other means to maximize profitability.

 

(3) Fixed income: Although interest rate in Taiwan had made significant recovery in 2016, it remains low when compared to other countries. In light of the recent deregulation on foreign currency fixed income products, the Company will still focus on growing foreign currency bonds, while at the same time develop foreign currency funding capacity, and thereby achieve balanced growth of NTD and foreign currency portfolios in the fixed income segment.

 

(4) Capital market: In support of the authority’s ongoing encouragement for the listing of overseas companies in Taiwan, the company will be actively exploring overseas prospects and introducing them to making IPOs here in Taiwan. Meanwhile, the company will play its role as a financial consultant to assist corporate customers with local mergers and acquisitions.

 

(5) Derivatives: In light of new warrant instruments and new trading rules introduced by the authority, the Company will be bringing customers better choices with enhanced risk management to secure revenues. In terms of structured instruments, the company will be introducing high-income, principal-protected and equity-linked varieties to address customers’ needs, and tighten risk management to ensure the stability of profit streams.

 

(6) E-Commerce:

 

A. Transformation of online services from function-driven to user-driven: Given the growing popularity of mobile devices, the company will be taking steps to enhance the compatibility of its online services across different platforms and devices. These services will be integrated with personalized information to deliver better user experience.

 

B. Web trading system: the new trading interface, developed using the latest technology, integrates functionalities of the old version and makes more efficient use of system resources. The interface is available in Traditional Chinese/Simplified Chinese/English and is able to run on non-Microsoft browsers without the customers having to download any additional software. Currently the number of users is steadily growing; in addition, the platform will be optimized and service energy will be increased for the relevant functions in order to strengthen the stability of the system and meet customer needs.

 

C. Wealth management app: The app will provide customers with exclusive services such as online fund quotation, electronic trading, and account management, thereby allowing them to manage wealth over the Internet and using mobile devices.

 

D. Online services for existing customers: As the authority adjusts its policy, the Company will be making services such as "Online Document Signing," “Online Margin Trading Account Opening,” “Online Sub-brokerage Account Opening,” and "Online Password Re-issuance" available to existing customers, thereby allowing them to complete account opening at great convenience.

 

E. JihSun Campus: This new service will introduce customers to basic financial knowledge; meanwhile, some of the keywords will be optimized for search engine to raise exposure for the company’s products. The knowledge provided over this system is intended to appeal to people with no financial background at all.

 

F. Mobile rewards: the reward platform will be upgraded to support mobile browsing and real-time redemption for users' convenience, while the expiry period of rewards will be extended to two years. Also, to enhance customers’ loyalty, the Company will continue introducing reward points for the use of electronic services, and bringing more useful products and discounts for customers to redeem.

 

G. Computer telephony integration (CTI): the growing popularity of smartphones and social media presents a substantial challenge to the conventional, voice-based call center. In response to this change and increasing variety of social media interactions, the 0800 call center will undergo a computer telephony integration (CTI) to allow more efficient and better quality services that will raise customers’ satisfaction towards JihSun.

 

H. Pro-active customer service: Digital services are starting to take over conventional services that used to be delivered over counter. In light of this trend, JihSun will be developing personalized digital advisory services that help customers understand and trade the products offered to them, while at the same time tend to customers’ needs and gather opinions from them.

 

(II) Industry overview

1. The industry’s current status and potential developments

 

A. Based on statistics provided by TWSE and TPEx, trade volume in TWSE had fallen by 16.9% from 2015 to NT$16.8 trillion in 2016, whereas trade volume in TPEx totaled NT$5.1 trillion. Overall, trade volume in the two markets had fallen by 17.6% to NT$23.97 trillion in 2016. Meanwhile, the percentage of transactions by foreign investors had increased from 23.9% in 2015 to 26.1% in 2016.

 

B. A total of 65 ETFs were listed for trading in 2016. 27 new ETFs were introduced onto the market, up from the 13 new ETFs introduced in 2015. Total transaction value amounted to NT$1.7 trillion in 2016, up 4.7% from the previous year.

 

C. Key statistics on Taiwan's stock market showed that total market capitalization had grown by 11% from NT$24.5 trillion in 2015 to NT$27.2 trillion in 2016; meanwhile, the number of listed companies had increased from 874 to 892, and the number of securities account holders had increased by 160,000 from 9.61 million to 9.77 million. At the end of 2016, there were a total of 77 securities brokerage firms and 876 branches.

 

2. Correlation among up-stream, mid-stream, and down-stream suppliers in the industry, and product development trends and competitions

(1)    Brokerage business:

 

A. Brokerage services

a. In 2016, JihSun Securities operated 44 branches in total. In an attempt to maximize the flexibility and efficiency of existing branches, JihSun has been reviewing the potentials of its office locations and taking actions to relocate and downsize existing branches based on local business potentials. These decisions have resulted in significant saving of rental expense. Given the ongoing evolution of digital services, it is an inevitable trend to downsize and refine the Company's service locations, and make them more cost-effective and more focused toward value-adding business activities.

 

b. The current tax system and political factors are causing investors and capital to flee the country, which severely undermines the development of the local securities market. Therefore, apart from securing the Company's current success, it is also important to explore new opportunities in overseas markets and new products. By collaborating with other financial service providers, the Company hopes to develop competitive advantage and grow brokerage revenues by enhancing the quality of information and services delivered.

 

c. Many of the market's long-standing securities firms are facing the challenge of aging sales force and customer base, which presents difficulty with regards to the deployment of human and physical resources. JihSun Securities will aim to turn this challenge into an opportunity, and embrace the new trend by: refining asset planning service to senior high net worth customers, escalate training intensity for new sales representatives, recruit efficient sales talents, and develop a regional SSR center and an order processing hub. Meanwhile, the Company will assist sales representatives with their transition into the next stage of their career, where they can create more values and better support the Company's strategies.

 

B. International markets:

a. The global economy is expected to expand in 2017, as policies of the new U.S. President look promising in helping the USA achieve higher growth. Meanwhile, upcoming elections in Europe combined with UK's exit present significant uncertainties to Europe's recovery; China's sustained expansionary policy may result in a weakened currency and a change of trade relationship with the U.S. brings significant concern to the prospect of the Chinese economy; lastly, emerging markets such as Russia and Brazil are likely to exhibit increased growth due to the recovery of commodity prices. Overall, the global economy is expected to sustain growth in 2017, but each market carries some form of risk that makes their prospects highly uncertain to investors.

 

b. Offshore securities unit (OSU) will remain one of the major business focus for securities firms. The OSU platform not only has the potential to extend service reach and product variety, but may also attract high net worth customers for revenue and professional financial talents to assist in business promotion.

 

C. Wealth management:

a. Given that securities brokers are now permitted to engage in wealth management service, JihSun has begun launching trust services online and creating a digital trust platform to better serve its customers. A mobile trust APP is scheduled to be launched in 2017. In the future, JihSun Securities will further complete and enrich the range of financial products offered. Given the direction the market and regulations are progressing, the Company will continue growing its brokerage service and institutional customers, while at the same time expand the scope and depth of service delivered and manage customers' assets more effectively to achieve greater performance and competitive advantage.

 

b. The global economy started slowing down in the second half of 2015, which affected Taiwan's economic performance. This sluggish performance continued into 2016, causing further contraction of trade growth that prolonged the time to recovery. Recently, the world has seen a series of unexpected events from UK's exit from Europe to the surprising outcome of the U.S. presidential election; these events have given rise to uncertainties regarding the world's economic prospect. Performance of the domestic and global economy in 2017 will be largely influenced by factors such as: Trump's economic policy, uprise of trade protectionism, effect of financial incentives introduced by governments around the world, elections in Europe, development of the Chinese economy, and recovery of world's advanced economies. Meanwhile, improved growth from emerging markets and developing nations should contribute marginally to global economic activities. In response to changes in the market, the wealth management platform will continue referring customers to investment products that suit their risk profiles, from conservative types such as insurance and dividend-paying funds, consistent types such as securities lending, to aggressive types such as equity funds. This diverse range of products should enable customers to react to all market conditions.

 

(2) Proprietary trading:

 

A. In response to the deregulations, proprietary securities brokers have entered the stage of diversified investments. They are no longer limited to invest in the capital market in Taiwan but start to invest in other international markets with appropriate risk control mechanism.

 

B. The investments of the securities brokers have become more diversified. In addition to the directional transactions, they are also developing toward strategic transactions and create maximum profit with various tools for investments.

 

C. The broadened investment exposure gives rise to complexity and risks. Proprietary trading firms are placing more emphasis towards job specialization and teamwork, as well as system enhancement, regulatory compliance and risk control while seeking profit maximization.

 

D. Overseas ETF serves as an alternative source of profit when Taiwan's stock market underperforms. Research on global macroeconomics and capital flow are also helpful to our trading decisions in Taiwan's stock market. The government has been actively introducing new variety of ETFs onto the market, including instruments that are linked to the performance of China equity, Japan equity, U.S. equity, commodity and inverse performance of the above, thereby giving investors broader range of tools at their disposal. The relatively low transaction cost and absence of exchange rate risk make ETF a versatile instrument in numerous trade strategies when combined with the use of futures or bonds.

 

(3) Fixed income:

 

A.The global financial market had seen many surprising turns of event in 2016, with Brexit and Trump's victory in the U.S. presidential election having the most profound impact on the market. The latter, in particular, has given the market reasons to expect an economic upturn and a rise of inflation rate, which resulted in the surge of U.S. bond yields in the 4th quarter. In the meantime, Taiwan also started to exhibit improved economic performance, which prompted the Central Bank to suspend interest rate cuts. As a result of this double impact, Taiwan's bond market exhibited a bearish movement unseen in a very long time, with yields of 10-year bonds rising quickly by 78bps from 0.62% in August to 1.40% in November. U.S. and Taiwan's economy should continue recovery in 2017, which is why Taiwanese bonds and U.S. bonds are likely to exhibit bearish performance in the next year. For this reason, the Company will be adopting a low-risk trade strategy incorporating instruments such as bonds, interest rate swaps, U.S. bond futures and foreign currency bond futures, while at the same time try to minimize exchange rate risk on foreign currency bonds and avoid potential risks of interest rate hike.

 

B. International Bond Exchange still dominated the primary market in 2016. Since NTD and foreign currency bonds offer relatively low interest rates, they did not appeal to investors as other financial instruments have. Only NT$289.606 billion of NTD-denominated corporate bonds and bank debentures were issued during the year, but in the International Bond Exchange, US$47.9155 billion (equivalent to NT$1,533.3 billion) of USD-denominated bonds were issued, which showed significant contrast in the primary market. Nevertheless, banks still has advantage over securities firms in terms of funding cost, which makes bond underwriting a less competitive way of financing compared to loans offered by banks.

 

C. The bond brokerage department performed relatively better in 2016 compared to the year before. Investors' trade activities remained active throughout the year as interest rate movement conformed with the market's expectations (falling in the first half and rising in the second half), and increased trade volume brought revenue from matched deals. However, the recovery of trade activities is starting to slow down, and it remains to be seen whether bond brokerage is able to continue its momentum into 2017.

 

(4) Capital market:

 

A.IPO and capital raising activities by TWSE/TPEx listed companies have slightly declined in recent years due to undesirable performance of the economy and capital market. However, given the fact that the securities market still plays a critical role in the overall economy, the government, TWSE and TPEx will continue to support the market's development. After balancing between business growth and risk control, the division had taken the approach to choose its cases with higher discretion. In 2016, the Company lead-arranged 2 securities offerings and assisted in 36 cases; the total of 38 cases placed the Company in the 4th place. In the future, we shall maintain high professional standards of service to provide the best financial planning solutions to securities issuers and achieve new success.

 

B. Share administration agency is an increasingly competitive business. In order to satisfy customers' needs, JihSun continues to treat customers in the utmost priority and has taken progressive steps to refine service quality. Under the competitive environment, the Company managed to retain 144 customers for its share administration service in 2016, ranking 10th in the industry. The Company will maintain its professional, sustainable, and highly efficient service standards in the future to give customers the best services they deserve and build its long-lasting reputation.

 

(5) Derivatives:

 

A. Warrants: The overall size of the warrant market had reduced in 2016 as compared to 2015. The number of new warrants issued had declined by 6.0% while the value of new warrants issued had declined by 12.5%. This shows that Taiwan's warrants market is maturing to a point where it becomes highly competitive. The only way to stand out from the highly competitive environment is to improve the quality of our market making efforts, which in turn provides investors with better bid/ask quotes and liquidity. Furthermore, in view of the market's upcoming deal-by-deal matching system, we will be making enhancements to our current systems to give customers more efficient and more immediate quotes in the warrants market. Meanwhile, the Company will utilize a broad range of hedging instruments to hedge against warrant risks and reduce risk indicators in all aspects. The above efforts are intended to enhance our competitiveness in the warrants business.

 

B. Structured instruments: The steady rise of the stock market index in 2016 has presented investors a good opportunity to build investment strategies using structured instruments and shares. The Company has been developing different types to structured instruments to appeal to new customers of varying needs, and help them cope with the world's future uncertainties.

 

(6) E-Commerce:

 

According to the data published by Taiwan Stock Exchange Corporation, electronic trading accounted for 46.09% of the market's transactions by the end of December 2016 (YoY -5.51%). Based on the Company's own calculations, JihSun's market share of electronic trades totaled 1.70% by the end of December 2016 (YoY -0.58%), exhibiting a lesser decline than the market; meanwhile, electronic trades accounted for 52.199% of the Company's trade volume (YoY +4.81%), representing an increase year-on-year. 

 

 

(III) Technological research and development

1. E-commerce:

JihSun has been actively developing and investing in mobile applications in response to the "FinTech" era. Today, mobile software has become the primary means of digital service to customers, and will be the key to winning the competition in the future. To succeed in the race of e-commerce, JihSun will be offering its services on the foundation of a fully featured website (www.jihsun.com.tw), mobile App (WTS 5), advanced trading software (HTS/HTS2), and push message (JihSun online). Meanwhile, more intelligent services will be developed and integrated into the existing platform as technologies progress and further deregulations materialize, thereby bringing customers the most convenient investment services while satisfying the needs of a broader range of investors.

 

2. Research and development expenses and its results within the last two years:

(1) Research and development expenses

The company's research and development expenses were mainly spent on the development of information systems and risk management tools. Total R&D expenditures amounted to NT$17.4 million in 2015 and NT$14.2 million in 2016.

(2) Research and development results

The Company is actively committed to the R&D of information system and risk management tools with the R&D results in the last two years as follows:

 

A. IT system development:

B. Development of risk management tools:

 
(IV) Long and short-term business development plans

1. Securities brokerage:

(1) Brokerage business:

 

A.Short-term business plans:

Given the rapid development of digital technologies, changes in the securities business environment, increasing percentage of electronic trades, and lesser needs for investors to visit branches in person, the company will be expanding its SSR team in 2017 to establish a centralized phone hub for more competitive order processing. Existing branches will be adjusted in a manner that complements the group's differentiated service strategy to serve customers of certain attributes, and may not even provide brokerage service at all. This arrangement has the benefit of improving service efficiency and maintaining flexibility of business operations. The company will continue to expand and improve its trading platforms, and enhance digital services by coordinating with various departments to provide customers with useful investment information and better quality services.

 

B. Long-term business plans:

Source talented employees and high-value customers; improve capabilities of the entire sales force and aim to increase asset size. Evaluate potentials of each business location; identify offices that can be consolidated for higher yields; explore opportunities to merge or establish strategic alliance with other securities firms as a means of increasing JihSun's market share. Grow business through collaboration between departments and with external institutions.

 

(2) International market businesses

 

A.Short-term business plans:

JihSun’s sub-brokerage platform - “WTS” and Internet trading platform - “Global Connect” will be the main growth drivers for the company’s sub-brokerage service in 2017. Besides the two new systems, the Company will also aim to increase the market share of its sub-brokerage business by expanding product line, introducing strategic partners, and strengthening relationship with corporate customers.

 

B. Long-term business plans:

Recruit sales staff and investment advisors; support them with a complete product line that helps customers achieve optimal asset allocation, and create win-win solutions that contribute to JihSun's professional image in sub-brokerage services.

 

(3) Wealth management

 

A. Short-term business plans:

Product lines and customers’ portfolios will be regularly reviewed based on the latest studies to help optimize customers’ asset allocation.

 

B. Long-term business plans:

Implement customer service system onto the mobile platform, thereby allowing customers to access the services they require using mobile devices without the constraint of time. Promote fund sales through the new electronic trading platform and develop an intelligent investment system designed specifically for locked return instruments.

 

2. Proprietary trading:

(1) Investments:

 

A. Short-term business plans:

a. The Company shall base its decisions upon fundamental analysis, and adopt trading strategies over short-term and medium-term horizons. Investment meetings will be held on a regular basis to discuss global market movements, market factors, the overall environment, economic cycles, commodity prices, and other major issues. These discussions provide the basis for our investment strategies.

b. Diversify risks by adopting a strategic investment approach; utilize futures and securities lending to hedge and secure profitability.

 

B. Long-term business plans:

a. Assemble investment teams for different types of capital markets, so that department earnings are less prone to the impacts of performance of a single market.

b. Assemble teams of experts for different financial instruments, thereby reducing impacts of a single financial instrument on department earnings.

 

(2) Research:

 

A. Short-term business plans:

a. Increase the depth and breadth of research on overseas markets, given the stock market’s correlation with the rest of the world, and capture investment opportunities while avoid risks where possible.

b. Develop research on Taiwan's conventional industries to broaden stock selections.

c. Strengthen collaborative relationship with internal as well as external research resources.

d. Create a quality research environment and reduce employee attrition.

 

B. Long-term business plans:

a. Enhance the depth of research in all markets. Identify trends within the Greater China Region (China/Hong Kong/Taiwan) to complement our existing advantage in the Taiwan market, and exploit this knowledge for the stability of overseas returns.

b. With more deregulations underway, the Company will assist the financial holding group in exploring new investment opportunities and designing new products, both as means of broader revenue source and as a complement to the group's services for customers.

 

3. Fixed income:

(1) Short-term business plans:

Improve trading capacity of fixed income instruments; explore new customers and enhance relationship, and aim to increase market share in bond trading, brokerage and underwriting services.

 

(2) Long-term business plans:

Develop trading and marketing talents for foreign currency bonds; aim to increase profit contribution from foreign currency bonds, and create new possibility in the fixed income segment.

 

4. Capital market:

(1) Short-term plans:

By utilizing resources of the financial group and JihSun Venture Capital, the company plans to expand the scope of its underwriting services in the domestic market. In addition, the company will actively invest in the Emerging Stock Market and continue to win customers' recognition in the underwriting segment by maintaining service standards and profitability.

 

(2) Long-term plans:

Devote greater efforts into the development of overseas market; search for overseas securities issuers that are interested in raising capital from Taiwan; offer comprehensive range of financial services to regional customers, and take progressive steps toward becoming a regional investment bank.

 

5. Derivatives:

(1) Short-term business plans:

For the warrants segment, the company will aim to expand market share and introduce an APP designed exclusively for warrant service that would help build the company's brand image. In addition, the company will also engage in more active market making to make warrants attractive to investors, and thereby increase market share. In terms of structured instruments, the company will focus on product education and exploring new customers. Product-wise, the company will make a balanced offering of high-yield and principal-protected types to satisfy customers’ needs.

 

(2) Long-term business plans:

Raise market position in all service categories; enhance the trading system and risk management system to develop diverse and robust business models in light of new market challenges; coordinate service efforts to create synergies. Recruit trade talents that contribute to overall profit stability.

 

6. E-Commerce:

(1) Short-term plans:

Explore solutions to deliver cloud service and mass data to customers' mobile devices in a highly efficient and timely manner. Analyze customers' behavior patterns and investment preference, and offer pro-active service to strengthen customers' confidence in the JihSun brand. The wealth management platform will be the highlight of next year's e-commerce development. The Company plans to launch JihSun Fund APP as a means to provide customers with the information and services needed to allocate assets.

 

(2) Long-term plans:

Pay attention to the development of new technologies and new regulations, and introduce digital services that are distinctive from competitors. Incorporate cloud computing and mass data technologies into the electronic trading platform and increase investments in commercial mobile applications, thereby improve market share and customers' satisfaction in electronic trading.

 

 

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