The last top securities firm rushed to A-share CICC and hit with 10 billion yuan of financing

category:Finance
 The last top securities firm rushed to A-share CICC and hit with 10 billion yuan of financing


This means that CICC has finally entered the queue of A-share listing after the completion of H-share listing, M & A of CIC securities, additional issuance, introduction of strategic investors and other actions.

According to the arrangement, CICC plans to issue no more than 459 million shares this time, accounting for 9.50% of its total share capital after issuance. If calculated according to its current net assets per share and earnings per share, CICCs final IPO scale may reach 10 billion.

Last unlisted head

CICC, which has officially entered the IPO review queue in the domestic market, is likely to become the last A-share listed head securities firm.

According to the statistics of wind data from 21st century economic report, CICC is the only one of the top 10 securities companies with no IPO in 2019.

In the same period, among the top 20 brokers in terms of industry revenue, only CICC and Zhongtai have not yet listed. It is worth mentioning that on May 18, Zhongtai securities has taken the lead in realizing the IPO IPO meeting and launching the online public offering roadshow.

CICC is not only the head securities firm of the last IPO in recent years, but also may become the last head securities firm of IPO in the history of domestic capital market. Now many small and medium-sized securities firms or newly established securities firms are very difficult to develop and grow under the condition of non listing. A medium-sized securities firm, non-bank financial analysts said.

As a licensed institution, it is a high probability event for CICC to finally pass the IPO review and go public. At present, there are very few cases in which the licensed institution is not listed. Investment bankers at a leading brokerage in Beijing said.

According to the prospectus, CICCs operating revenue in the past three years has reached 11.209 billion yuan, 12.914 billion yuan and 15.755 billion yuan respectively, while the net profit attributable to the parent company in the same period is 2.766 billion yuan, 3.492 billion yuan and 4.239 billion yuan respectively.

It is worth mentioning that CICC, whose profits continue to expand, also has higher roe in the industry.

According to the data, the roe of CICC from 2016 to 2018 was 10.43%, 10.03% and 8.85% respectively, ranking seventh, fifth and first in the corresponding accounting year.

In 2019, CICCs roe reached 9.37% , still ranking in the top three in the industry, only next to CSC and Hualin securities.

On the one hand, the high roe is related to the larger proportion of high marginal income businesses such as investment banking business and asset management business, on the other hand, it is also the result of CICCs strong capital utilization ratio. The above non bank financial analysts point out.

It is mainly related to making full use of leverage strategy within risk control indicators. An analyst close to CICC said, the improvement of leverage ratio and asset liability ratio can effectively improve the efficiency of capital use as a financial institution.

Under the clear expectation of A-share sprint, the IPO scale that CICC may bring is also concerned by the market.

According to the prospectus, the current total share capital of CICC is 4.369 billion shares, while the owners equity is 4.8532 billion yuan, with a total net asset of about 11.11 yuan per share.

Based on the average rolling market to net ratio of securities companies since 2020 one point seven one By double calculation, the issuing price of CICC is about 19 yuan.

According to the simple calculation of no more than 459 million shares planned to be issued by CICC, the planned financing scale of CICC will reach 8.721 billion yuan this time.

Other analysts believe that in consideration of the current shareholder background, roe and higher efficiency of capital utilization of CICC, it is not excluded that the final issue pricing is higher than the valuation of the industrys general p / E ratio, resulting in the final issue size exceeding 10 billion yuan.

If it is pushed backward by the scale of 10 billion, CICCs IPO market to net ratio needs to reach about 1.96 times. In the view of some analysts, this expectation is not difficult to achieve.

Given the shareholder background of CICC, the market effect brought by the high roe in the industry and the sinking of institutional brands, it is not difficult for CICC to double Pb. Now, the market to net ratio of CSCEC is still more than 5 times. On the one hand, there will be fewer and fewer new shares for front-line securities companies in the future, and there will not be many new shares. On the other hand, CICC has its own brand aura, said an analyst at a medium-sized securities company in Beijing

If estimated at this price, the IPO scale of CICC will reach 10.451 billion yuan.

Some investment bankers also pointed out that the actual fund-raising scale of CICC still needs to take into account the market situation at that time, not excluding that the issuer or the regulatory window will adjust its initial fund-raising scale to some extent.

Before, some top securities companies also said that they raised more than 10 billion yuan, but in the end, many of them were discounted. At some issuance time points, issuers and regulators may also adjust the scale of issuance and fundraising according to market conditions and time points, so we need to see whether the market conditions support such large-scale issuance, said Baodai, an investment bank in Shanghai

In fact, CICC has been expanding rapidly in recent years through capital increase and share expansion and industry merger and integration.

As early as five years ago, CICC has launched the H-share listing rhythm. In October 2015, it successfully raised HK $5485 million through the H-share offering.

Since then, CICC has attracted Alibaba, Tencent and Haier to become shareholders of CICC through IPO, additional issuance and equity transfer of Huijin.

The introduction of these shareholders not only aims to use the Internet, industry and other resources to empower CICC, but also enables these shareholders to enjoy the corresponding capital return. Those close to CICC said.

In fact, after the introduction of the above institutions as shareholders, CICC has also carried out corresponding cooperation. For example, CICC and Tencent digital (Shenzhen) Co., Ltd. plan to establish a joint venture technology company in China to provide customers with intelligent wealth management, investment consulting and other businesses.

The company will give full play to its overall advantages, seize the opportunity of industry integration and expand its strategic cooperation with Tencent and other companies. CICC pointed out.

At the same time, CICC realized the acquisition of CIC securities and helped Huijin group to further realize the integration of securities assets, which also increased the total assets of CICC from 94.109 billion yuan at the end of 2015 to 34.4971 billion yuan at the end of 2020, and the shareholders equity of the parent company from 16.442 billion yuan to 48.532 billion yuan.

If CICC is only the head of investment banking business around 2015, the development of these years is making CICC the head organization of the whole business chain, and the rapid development speed in these years is mainly due to the merger and integration within the industry, capital increase and share expansion. If CICC also completes the IPO of a shares this time, its a + H listing layout will play a significant role in promoting CICC to further become the industry leader, said the above-mentioned non-bank financial analysts

In addition, with the implementation of the registration system reform, the arrival of the investment banking dividend has given CICC, which is famous for its investment banking business, a greater comparative advantage.

The registration system requires the securities companies to have higher ability and professionalism in the issuance and investment, inquiry pricing, underwriting and other links, while CICC, which is good at investment banking, may play a better role. The above non bank financial analysts point out. In fact, CICCs voice in the field of investment banking also makes many of its strategic initiatives tend to be forward-looking. For example, in its 2019 annual report released at the end of March, it mentioned to lay out public REITs, and just two months later, many ministries announced the formal start of pilot infrastructure type REITs projects. The investment banks of CITIC, CICC and CSCI often directly participate in the discussion and consultation of securities business innovation, and often perceive and predict the launch rhythm of these policies more clearly. This is also one of the important advantages of the head brokers, who are often able to take the first place in market innovation, said an investment banker from a leading securities firm in Shanghai Source: responsible editor of 21st century economic report: Yang bin_nf4368

In fact, CICCs voice in the field of investment banking also makes many of its strategic initiatives tend to be forward-looking.

For example, in its 2019 annual report released at the end of March, it mentioned to lay out public REITs, and just two months later, many ministries announced the formal start of pilot infrastructure type REITs projects.