Original title: CITIC Securities’ allotment of shares will be suspended from January 19th to 26th all day
Our reporter Zhou Shangdian
On January 4th, a performance forecast was released, and from January 12th to January 13th, a performance report and a rights issue announcement were successively released. CITIC Securities has recently become the focus of the industry.
On November 26, 2021, CITIC Securities’ plan to raise no more than 28 billion yuan in the allotment plan was approved by the China Securities Regulatory Commission. However, according to the relevant regulations of the China Securities Regulatory Commission on the public offering of allotments, the company must meet the issuance conditions such as continuous profit in the last three fiscal years. So far, just entering 2022, CITIC Securities has begun to release performance-related data one after another.
On January 12, CITIC Securities once again released the first 2021 annual performance report of a listed securities company, saying that in 2021, the operating income will be 76.57 billion yuan, a year-on-year increase of 40.80%, and the net profit attributable to shareholders of the parent company will be 22.979 billion yuan, a year-on-year increase of 54.2 billion yuan. %. So far, the net profit of CITIC Securities last year also hit a record high.
CITIC Securities stated that the domestic economy has overcome the impact of the epidemic and continued to improve, and the capital market is booming. In 2021, the company’s investment banking, asset management and other businesses will develop in a balanced and steady manner.
While the industry is still expressing that CITIC Securities’ net profit of 22.979 billion yuan “greatly exceeded expectations”, on the evening of January 13, CITIC Securities issued an A-share allotment announcement and determined that the price of this A-share allotment was RMB 14.43. The price of the H-share rights issue is HK$17.67 per share. At the same time, CITIC Securities A-share allotment rights were registered on January 18, and trading was suspended from January 19 to January 26.
Judging from the amount of funds raised, the total amount of funds raised from the allotment of CITIC Securities this time does not exceed RMB 28 billion, of which the total amount of funds raised from the rights issue of A shares does not exceed RMB 23.065 billion, and the total amount of funds raised from the allotment of H shares does not exceed RMB 4.935 billion. From the point of view of the purpose of fundraising, the net amount of funds raised after deducting the issuance expenses from the total amount of funds raised in this allotment is planned to be used for the development of capital intermediary business (not exceeding 19 billion yuan), increasing investment in subsidiaries (not exceeding 5 billion yuan) ), strengthening the construction of information systems (not exceeding 3 billion yuan) and supplementing other working capital (not exceeding 1 billion yuan).
CITIC Securities said, “After the completion of this issuance, the company’s main business will remain unchanged, and the company’s capital strength will be further enhanced, which will help the company to enhance its comprehensive strength at home and abroad, improve and enhance its business layout in an all-round way, and actively participate in international competition.” At the beginning, “responding to the national strategy and building an ‘aircraft carrier-level’ brokerage” was the first reason for the necessity of this allotment of CITIC Securities.
It is worth mentioning that CITIC Securities Co., Ltd., the largest shareholder of CITIC Securities, has promised to fully subscribe in cash the shares that can be allocated according to the company’s allotment plan according to the number of shares held by the company after the market closes on the registration date of this allotment.
After the performance of “One Brother”, at least 10 securities companies have given him in-depth “support” on the research side, and believe that the performance of CITIC Securities has exceeded expectations.
Liu Xinqi, chief analyst of the non-banking industry of Guotai Junan, also said, “With the implementation of the allotment, the capital of CITIC Securities will be greatly supplemented, and the liquidity constraints of NSFR/LCR will be satisfied, laying a solid foundation for the comprehensive development of the follow-up institutional business. In the context of the capital constraints of peers, the company’s market share in institutional business is expected to further increase. At the same time, the ‘overweight’ rating of CITIC Securities is maintained.”
Hu Xiang, chief analyst of non-bank finance at Soochow Securities, also expects that after the completion of the allotment, CITIC Securities’ capital will be further consolidated. As a leading securities firm, CITIC Securities has outstanding professional capabilities, and institutional business is expected to become a new growth point of performance.
Qiu Guanhua, Director of Zheshang Securities Research Institute, said, “The implementation of the allotment of CITIC Securities will effectively replenish capital ammunition and expand capital intermediary businesses. At the same time, CITIC Securities has a solid leading position, and the rapid growth of multiple business lines has driven performance beyond expectations, and will continue to benefit in the future. Dividends from capital market reform.”
Luo Zhanhui, chief analyst of the non-banking industry of Western Securities, said, “Considering that CITIC’s share placement ratio is low in this round (10 for 1.5, and the rest of the securities companies are 10 for 3), the dilution of ROE is relatively small, and the company’s funds are mainly concentrated. For capital intermediary businesses such as equity derivatives, it is judged that the listing of allotment shares will have limited disturbance to CITIC Securities.”