In the high-profile Citic Securities Company Limited(600030) a + H-share allotment, the A-share allotment financing has been successfully completed, but how to use the huge funds raised by Citic Securities Company Limited(600030) has become the focus of all investors.
On February 8, Citic Securities Company Limited(600030) announced that on February 8, 2022, the board of directors and the board of supervisors considered and approved the proposal on using the temporarily idle A-share raised funds to carry out cash management, and agreed that the company would use the temporarily idle A-share allocated funds of no more than 8 billion yuan (including 8 billion yuan) to carry out cash management, Within one year from the date of deliberation and approval by the board of directors, the amount of funds can be recycled and rolled.
For investors, the yield of one-day treasury bonds can almost be regarded as risk-free income. Therefore, the raised funds of 8 billion yuan are used for cash management. According to the annual interest rate of 2%, the fixed income of Citic Securities Company Limited(600030) can be 160 million yuan a year. However, in the case of market shock, it is undeniable that how to use the raised funds to bring higher returns to investors will be the focus of the market in the future.
cash management reason: some A-share raised funds have a certain idle period
Citic Securities Company Limited(600030) allotment lasted about one year from the announcement of the plan to the final landing of a shares. According to the arrangement, Citic Securities Company Limited(600030) plans to raise no more than 28 billion yuan through the “a + H” share allotment, which is the largest share allotment and fund-raising in the history of a shares.
On January 26, Citic Securities Company Limited(600030) announced that the A-share allotment finally obtained the allotment of 1.552 billion shares, raising 22.396 billion yuan, accounting for 97.17% of the placeable shares.
In today’s announcement, Citic Securities Company Limited(600030) pointed out that the investment projects of the raised funds and the use plan of the raised funds after deducting the issuance expenses are as follows: develop the capital intermediary business of about 13.318 billion yuan, increase the investment in subsidiaries by 5 billion yuan, strengthen the construction of information system by 3 billion yuan and supplement other working capital by 1 billion yuan.
Among them, RMB 5 billion is proposed to be used to increase the investment in subsidiaries. Due to the prior approval procedures of regulators for the establishment and capital increase of subsidiaries, some funds must be used after obtaining regulatory approval, and the rest must be invested after completing the relevant approval process according to the business capital needs of subsidiaries. It is expected that some funds will be idle for a certain period; The RMB 3 billion to be used to strengthen the construction of information system shall be used in batches according to the construction progress of the company’s information system.
To sum up, the company expects some A-share raised funds to have a certain idle period. In order to further improve the use efficiency of funds and make rational use of idle raised funds, the company plans to carry out cash management within the maximum amount of 8 billion yuan (including 8 billion yuan) without affecting the company’s daily operation and ensuring the safety of raised funds, so as to better maintain and increase the value of the company’s funds.
funds will invest in financial products such as certificates of deposit and time deposits
Specifically, Citic Securities Company Limited(600030) the above 8 billion yuan will be invested in investment products with high security, good liquidity and an investment period of no more than 12 months, including bank certificates of deposit, time deposits, structured deposits, appointment deposits and bank financial products. Such investment products shall not be pledged, and the special settlement account for products (if applicable) shall not deposit non raised funds or be used for other purposes.
The reporter of the daily economic news noted that in the current capital market, the reverse repurchase of treasury bonds can almost be regarded as a risk-free return. The yield of the investment products mentioned in the above Citic Securities Company Limited(600030) is often linked to the reverse repo interest rate of government bonds. Even if the annualized interest rate is 2%, the investment capital of Citic Securities Company Limited(600030) 8 billion yuan can obtain an income of 160 million yuan a year.
Although it is not uncommon for Citic Securities Company Limited(600030) to use idle raised funds for cash management in listed companies, for many investors who support Citic Securities Company Limited(600030) allotment with real gold and silver, the use efficiency of corporate funds is indeed a topic of concern.
From Citic Securities Company Limited(600030) current financial indicators, the company’s return on net assets and other indicators to measure its profitability are good – the return on net assets of the company reached 9.34% in the first three quarters of 2021. But there is no doubt that after the allotment, the company’s earnings per share, return on net assets and other indicators will be diluted. More than 600000 shareholders are full of expectations for the company to improve the efficiency of capital use and thus drive the improvement of valuation.
It is worth mentioning that many analysts are also full of expectations for the stock price performance of the “first brother” of securities companies after the allotment.
Orient Securities Company Limited(600958) pointed out that considering that the allotment will dilute roe in the short term and the low allotment price will lower the overall stock price of the company, it has become the main factor to suppress the company’s valuation and stock price performance since the company announced the allotment decision nearly a year ago. With the official implementation of the allotment, this short-term negative factor has been cleared quickly.
Orient Securities Company Limited(600958) at the same time, it is pointed out that the performance express data of Citic Securities Company Limited(600030) in 2021 – the operating revenue in 2021 was 76.570 billion yuan, a year-on-year increase of 40.80%; The net profit attributable to the parent company was 22.979 billion yuan, a year-on-year increase of 54.20%, which was much higher than expected. Orient Securities Company Limited(600958) therefore raised the target price of Citic Securities Company Limited(600030) to 28.51 yuan to maintain the “overweight” rating.
