According to incomplete statistics of Securities Daily, since this year, at least 12 securities companies have planned to increase or complete the capital increase of their subsidiaries, with a scale of more than 25 billion yuan, so as to supplement the net capital of their subsidiaries. However, recently, CITIC Securities announced that it intends to reduce the capital of CITIC Securities in South China by no more than 7 billion yuan.
CITIC Securities plans to make a subsidiary
Capital reduction no more than 7 billion yuan
On November 20, CITIC Securities announced that the board of directors deliberated and agreed to reduce the capital of CITIC Securities South China Co., Ltd. (hereinafter referred to as CITIC Securities South China, the former Guangzhou securities), with a capital reduction of no more than 7 billion yuan (including 7 billion yuan), which will be implemented in batches according to the business operation of CITIC Securities in South China.
In fact, CITIC Securitiess action to CITIC Securities in South China is far more than capital reduction. According to its latest three quarterly reports, from January 31, 2020, CITIC Securities South China was incorporated into the scope of CITIC Securities merger. By the end of the third quarter, CITIC Securities South China had cancelled 69 branches, changed the names of four branches and relocated one securities business department in the same city. At present, CITIC Securities has 3 branches and 65 securities business departments in South China.
In terms of registered capital, according to the semi annual report of CITIC Securities, the registered capital of CITIC Securities in South China was 5.36 billion yuan at that time, while CITIC Securities intends to reduce its holdings of CITIC Securities in South China by no more than 7 billion yuan. Therefore, the reporter of Securities Daily found that the registered capital of CITIC Securities in South China had just completed the change on November 6, that is, 14 days before the announcement of capital reduction, its registered capital increased from 5.36 billion yuan to 10.91 billion yuan, an increase of 88.25%. In other words, if the capital reduction of 7 billion yuan is completed, the registered capital of CITIC Securities in South China may become 3.091 billion yuan.
Perhaps its predecessor, CITIC Securities, is a stranger to many investors in Guangzhou. In October 2019, CITIC Securities Co., Ltd. issued shares to purchase assets and related transactions were approved unconditionally by the 53rd working meeting of the merger and reorganization committee of listed companies of China Securities Regulatory Commission in 2019. In December of the same year, CITIC Securities issued shares to purchase 100% equity of Guangzhou Securities Co., Ltd., which was approved by the CSRC. In January this year, after CITIC Securities completed the issue of shares to purchase shares of Guangzhou securities, the registered name of Guangzhou securities was changed to CITIC Securities South China.
In terms of capital reduction subsidiaries of securities companies, according to incomplete statistics of Securities Daily reporters, since this year, in addition to CITIC Securities, there are two securities companies that have completed the capital reduction of subsidiaries this year. In March this year, Donghai securities completed the industrial and commercial alteration registration of reducing the registered capital of Donghai investment from 1.02 billion yuan to 600 million yuan. Pacific Securities in April, according to the needs of the companys business development, decided to reduce Taizheng extraordinarys registered capital from 420 million yuan to 260 million yuan. In fact, this is not the first time that Pacific Securities has reduced its capital. In September 2019, Pacific Securities decided to reduce its registered capital from 850 million yuan to 420 million yuan. Prior to that, Pacific Securities has reduced Taizheng extraordinarys registered capital from 1.1 billion yuan to 850 million yuan.
So far, during the year, the total number of subsidiaries to be reduced by the above three securities companies is no more than 7.58 billion yuan.
Capital increase to subsidiaries
Different from the fate of the capital reduction of the above-mentioned subsidiaries, many securities companies have been doting on the subsidiaries during the year, and have been increasing the size.
In fact, in the ten years from 2010 to 2020, the number of members of China Securities Association has increased from 106 to 135, mainly from member subsidiaries. From the relative growth of operating income and net profit, the growth of income and net profit of subsidiaries of many securities companies is much higher than that of parent company.
According to the Securities Daily reporter combing found that in the first half of this year, Huatai Zijin investment, a wholly-owned subsidiary of Huatai Securities, ranked first in the securities subsidiary company with a net profit of 1.598 billion yuan. According to the statistics of the Securities Industry Association, its net profit left 118 securities companies behind. In the first half of the year, 25 employees of CITIC Securities Investment, a wholly-owned subsidiary of CITIC Securities, achieved a net profit of 979 million yuan, which was eye-catching.
At the same time, in order to further develop overseas business, securities companies are also increasing capital in Hong Kong, China, revealing the layout of international development strategy. According to incomplete statistics of Securities Daily, since this year, six securities companies, including China Merchants Securities, Zhongyuan securities, Donghai securities, Founder Securities, Orient Securities and Everbright Securities, have planned or completed capital increase for their Hong Kong subsidiaries.
As for the reasons for the capital increase, Founder Securities said, in the first half of 2020, the overseas securities market fluctuated greatly, and the fixed income self operation business of its Hong Kong subsidiary in China suffered a large loss, which had an adverse impact on the operation of the subsidiary. In order to enhance the capital strength of the Hong Kong subsidiary and supplement its liquidity, the company decided to increase its capital. .
In addition, in the past two years, securities companies have continuously increased the development of innovative business. It is common for securities companies to increase capital in alternative investment subsidiaries and set up new alternative investment subsidiaries. Many securities companies have increased the size of alternative investment subsidiaries in order to develop the business of science and technology innovation board. Among them, securities companies with the investment in new shares of the science and technology innovation board, mainly through alternative investment subsidiaries to participate. For securities companies, the system is not only an opportunity to increase income, but also a test of the strength of investment banks. Since this year, in order to meet the needs of business development, China Merchants Securities has increased capital to China Merchants Securities, Haitong Securities to Haitong innovation, Hongta securities to Hongzheng average square, Huaan securities to Huafu Ruixing, Dongfang securities to Dongzheng venture capital and Founder Securities to Founder Securities.
Source: Securities Daily editor: Yang Qian_ NF4425