As the first securities finance institution established in Taiwan, Fuhwa Securities Finance holds a dominant market position in providing credit for margin transactions. The company continues to diversify its services and strengthen its strategic alliances with its brokerage agents to retain its leading position in the industry

Overview

Stable Positioning as the Leader in the Equity Market
Established on March 10, 1980, Fuhwa Securities Finance pioneered transaction credit in the domestic equity market. Over its 24-year history, the company has earned investors' loyalty by providing reliable and secure services that preserve their long-term profits. Fuhwa Securities Finance has amassed a wealth of practical financing experience and a powerful marketing network in securing a dominant position in the margin trading and short selling credit markets. So dominant, in fact, that Fuhwa is number one in revenues, pretax profit, profit margin, and total assets in the securities financing industry.

Solid Credit Outlook
To retain its leadership position in the industry, Fuhwa Securities Finance authorized Taiwan Ratings to conduct a review of its credit status. The ratings agency affirmed the company's outlook as "stable" in 2002 and 2003, and rated its long-term and short-term rating "twBBB" and "twA-3" respectively. In 2004, the company has significantly improved in its credit rating, with the result of upgrading to "twA-" and "twA-2", and the outlook being cited as "stable".

Building Strong Networks with Strategically Allied Brokers
As of the end of 2004, Fuhwa Securities Finance had expanded its marketing networks to 59 brokers with 216 locations across Taiwan. By utilizing the resources of Fuhwa Financial Group, Fuhwa Securities Finance is able to provide its strategic alliances with securities financing, as well as banking, insurance, securities trading, and other value-added services, such as online trading, wireless trading and Fuhwa's worldwide market tracking software.

The Initial Issuance of Unsecured ECB in January 2004
To lower its operating costs, increase its investment ceiling and enhance return on investment, Fuhwa Securities Finance issued unsecured exchangeable bonds overseas for the first time on January 13, 2004. After the exchange is completed, the company will reduce its U.S. dollar holdings and return some of the capital to Fuhwa Financial Group to maximize its capital utilization.

Outlook

Lower Costs, Higher Productivity
In the future, Fuhwa Securities Finance will concentrate internally on cutting operating costs, controlling credit risks, and fortifying credit quality. Meanwhile, we will also continue our efforts to cultivate more professionals to enhance the quality of our services. Fuhwa Securities Finance will also broaden its horizon of services to meet the needs from its retail investors who tend to place an increasingly high value on investment and financial planning as their incomes grow. Through our ross-functional integrations, we are able to deploy cross-selling service models to lead to greater customer satisfaction and in turn enhance productivity and overall results.

Fortifying the Strategic Alliances with Allied Brokers
Fuhwa Securities Finance seeks to provide reliable and professional services to strategic allied brokers and their clients. The cooperation between Fuhwa Securities Finance and its strategic allies helps to transform the marketing strongholds of allied brokers into a joint marketing network and thereby buttress the retail channels of the group. Fuhwa Securities Finance is also keeping apace with the government in internationalizing and globalizing the domestic financial markets by diversifying its financial product for providing clients with the most innovative products and widest array of financial services in the industry.