The breaking of new shares affects the enthusiasm of investors to fight for new shares, which is also being tested for follow-up securities companies. As of the closing on February 8, 11 new shares had been broken during the year, of which many were broken on the science and innovation board, with a breaking rate of 70%.
The follow-up investment business of five securities companies was dragged down by the break. Based on the closing price and initial price on February 8, Guotai Junan Securities Co.Ltd(601211) has a floating loss of about 28.66 million yuan, Citic Securities Company Limited(600030) has a floating loss of about 31.9 million yuan, Haitong Securities Company Limited(600837) has a floating loss of about 120 million yuan, and Minsheng securities and China International Capital Corporation Limited(601995) have a floating loss of about 7.6 million yuan. From this point of view, Haitong Securities Company Limited(600837) lost the most serious follow-up.
Haitong Securities Company Limited(600837) the floating loss of follow-up investment exceeds 100 million yuan
According to wind data, since January 2022, a total of 32 new shares have landed in a shares. Except for 6 main boards and 2 Beijing stock exchange, the other 24 are registered new shares on the science and innovation board and gem. Among them, 6 new shares broke on the first day of listing, with a breaking rate of 25% on the first day of listing. Among them, Weike technology, Xinghui huancai, Yahong medicine, Aojie technology and Maiwei biology broke at the opening and maintained the breaking until the latest closing.
As of the closing on February 8, the closing price of 11 new shares, including Guoxin technology, Yahong medicine, Weike technology, Tianyue advanced, Xinghui environmental materials, Aojie technology, Maiwei biology, Chengda pharmaceutical, xidiwei, Yidong electronics and Zhenlei technology, fell below the initial price on the first day of listing, of which 7 new shares were on the science and innovation board and 4 on the gem.
In addition to giving investors a “heavy hammer”, the breaking of new shares also dragged down the following securities companies. According to the statistics of the financial Associated Press, among the above 11 new shares, a total of Guotai Junan Securities Co.Ltd(601211) securities, China Merchants Securities Co.Ltd(600999) , Everbright Securities Company Limited(601788) , Shengang securities, Sinolink Securities Co.Ltd(600109) , Citic Securities Company Limited(600030) , Haitong Securities Company Limited(600837) , Minsheng securities and China International Capital Corporation Limited(601995) and other securities companies participated in the recommendation and underwriting. Among them, Guotai Junan Securities Co.Ltd(601211) securities, Citic Securities Company Limited(600030) , Haitong Securities Company Limited(600837) , Minsheng securities and China International Capital Corporation Limited(601995) and other five securities companies followed through relevant subsidiaries.
Specifically, Guotai Junan Securities Co.Ltd(601211) securities invested 1.8 million shares in Guoxin technology; Citic Securities Company Limited(600030) follow up and invest about 3.3 million shares and 970000 shares of Yahong medicine and Zhenlei technology respectively; Guotai Junan Securities Co.Ltd(601211) and Haitong Securities Company Limited(600837) follow up and invest about 1.21 million shares of Tianyue advanced respectively; Haitong Securities Company Limited(600837) follow-up investment in Maiwei biology and Aojie technology is about 2.87 million shares and 840000 shares respectively; Minsheng securities and China International Capital Corporation Limited(601995) invested about 1.6 million shares in xidiwei respectively. According to the closing price and initial price on February 8, the floating loss of Guotai Junan Securities Co.Ltd(601211) is about 28.66 million yuan, Citic Securities Company Limited(600030) is about 31.9 million yuan, Haitong Securities Company Limited(600837) is about 120 million yuan, and the floating losses of Minsheng securities and China International Capital Corporation Limited(601995) are about 7.6 million yuan, of which Haitong Securities Company Limited(600837) is the most serious.
The breaking of Aojie technology and Maiwei biology obviously dragged down Haitong Securities Company Limited(600837) . On the one hand, Aojie technology is the first 100 yuan share since 2022, Haitong Securities Company Limited(600837) has invested about 840000 shares in Aojie technology through Haitong innovation, underwritten about 1.07 million shares abandoned by the successful bidder, and obtained about 1.91 million shares in total. If calculated by the closing price on the first day of listing, Haitong Securities Company Limited(600837) investment has a floating loss of about 100 million yuan. At present, the share price of Aojie technology has warmed up, and the floating loss is narrowing. On the other hand, the floating loss of Maiwei biology seems to be expanding. Although it closed up on February 8, the share price has fallen by about 14% compared with the latest closing price on the first day of listing.
On the one hand, follow-up investment is only a floating loss on the book. On the other hand, although follow-up investment fails, the income from sponsor and underwriting expenses far exceeds the loss of follow-up investment. Guotai Junan Securities Co.Ltd(601211) the cost of securities participating in the recommendation and underwriting of SMIC technology is about 200 million yuan; The cost of Guotai Junan Securities Co.Ltd(601211) and Haitong Securities Company Limited(600837) participating in Tianyue advanced sponsorship and underwriting is about 300 million yuan; Haitong Securities Company Limited(600837) the cost of participating in Maiwei biological recommendation and underwriting is about 200 million yuan; Minsheng securities, China International Capital Corporation Limited(601995) and Huaxing securities participated in the recommendation and underwriting of Xidi micro, with a cost of about 100 million yuan; Haitong Securities Company Limited(600837) the total underwriting fee and recommendation fee of Aojie technology and Maiwei biology are about 500 million yuan; Citic Securities Company Limited(600030) the total cost of participating in the recommendation and underwriting of Yahong medicine and Zhenlei technology is about 300 million yuan.
the breaking rate of new shares on the science and Innovation Board reached 70%
In July 2019, as an innovative measure, the follow-up investment system came into being with the science and innovation board. As an innovative measure, the follow-up investment business has become a source of income for securities companies. According to wind statistics, as of July 23, 2021, the second anniversary of the operation of the science and innovation board, the total floating profit of securities companies was 21.2 billion yuan, and the overall follow-up investment yield was 64%.
This situation has changed with the increase of breaking stocks. According to the statistics of the Financial Association, since 2022, as of February 8, a total of 10 companies have landed on the science and innovation board, and only three companies have not broken, including chuangyao technology, Jingke energy and Weide information. In other words, the breaking rate of new shares on the science and innovation board has reached 70% this year.
At present, in the A-share market, only Kechuang board has mandatory follow-up investment requirements for sponsors. Therefore, the sluggish performance of new shares on Kechuang board also directly poses a challenge to the follow-up investment business of securities companies.
According to the guidelines for stock issuance and underwriting business of the science and Innovation Board issued by the Shanghai Stock Exchange, the main body of the science and Innovation Board participating in the follow-up investment is the alternative investment subsidiary legally established by the sponsor of the issuer, or the alternative investment subsidiary legally established by the securities company that actually controls the sponsor, The use of its own funds to commit to subscribe for shares with a scale of 2% to 5% of the number of shares issued by the issuer in the initial public offering, and the lock-in period is 2 to 3 years. Industry insiders believe that, including Haitong Securities Company Limited(600837) , the ban on follow-up investment new shares held by these securities companies will not be lifted until next year. Obviously, the current floating loss is not the final outcome.
In the view of Wang Jiyue, a senior investment banker, in the science and innovation board, the proportion of securities companies following the investment is limited, and the amount of follow-up investment is far less than the sponsor underwriting fee. The loss of this transaction is not so serious, “even if it is completely lost, it will not lose in the general ledger. In addition, there is still a period of time for the lifting of the ban on these war allotments, and it doesn’t matter whether they rise or fall in the short term.”
Chen Mengjie, chief strategist of YueKai Securities Research Institute, told the financial Associated Press: “the follow-up investment system gives the lead underwriter the option of over allotment. If there is a break after the listing of new shares, the lead underwriter has the right to buy shares from the secondary market, which helps to prevent the risk of sharp fluctuations in stocks in the initial stage and stabilize market sentiment and the interests of listed companies.”
Whether securities companies really “lose” follow-up investment still needs some time to wait and see. And after all, not all securities companies are worried about the breaking of new shares, such as “one brother of securities companies” Citic Securities Company Limited(600030) . At the end of 2021, Hemai shares, the “most expensive new share” in the history of a shares, did not break as expected by the market, but rose on the first day of listing, which brought a considerable income to Citic Securities Company Limited(600030) . The issuing sponsor and lead underwriter Citic Securities Company Limited(600030) of the listed company obtained 200000 Hemai shares through strategic placement, plus 650000 shares abandoned by the underwriting winner, Citic Securities Company Limited(600030) and its subsidiaries’ book profit of at least 100 million yuan due to the first day of listing of Hemai shares, including at least 33 million yuan due to follow-up investment.
Analysts in the securities industry said that in addition to profitability, high pricing was the main incentive for the breaking of new shares. In addition, the negative market sentiment since the third quarter of last year also affected the market performance after the listing of new shares to a certain extent.
So, how to reduce the probability of breaking new shares? Chen Li, chief economist of Chuancai securities and director of the Research Institute, pointed out in an interview with the financial associated press that if securities companies can do professional desk work, give professional and reasonable valuation and pricing, and conduct in-depth investigation and understanding of investors’ expectations and affordability, they can greatly reduce the incidence of breaking problems.
China Securities Co.Ltd(601066) the analysis points out that investors are still recommended to give reasonable valuations to unprofitable biomedical enterprises and companies with high pricing but weak substantive scientific and technological attributes, and actively participate in the IPO of enterprises with new normal pricing.
