Recently, a fixed increase announcement of Tris, a new third board enterprise, attracted attention.
China Securities Co.Ltd(601066) is the host broker of teres, an enterprise listed on the new third board. In this fixed increase, the alternative investment subsidiary China Securities Co.Ltd(601066) of China Securities Co.Ltd(601066) invests in shares. The investment also signed an attached agreement. If the IPO materials of teres North stock exchange are not accepted before December 31, 2022, the shareholders of the company are required to buy back the shares of China Securities Co.Ltd(601066) investment in this fixed increase, with compensation interest attached. At the end of last year, teres has submitted the guidance report on listing on the Beijing stock exchange, and the guidance organization is China Securities Co.Ltd(601066) .
Investment banks plus investment the first mock exam, this mode has aroused concern. The Chinese reporter of securities companies noted that there are similar cases in non independent China Securities Co.Ltd(601066) , Soochow Securities Co.Ltd(601555) , Donghai securities and other securities companies. Senior investment bankers said that this phenomenon is relatively common. There are many follow-up investment agreements on the science and innovation board, but the enterprises were not listed at that time and did not need to be announced. Enterprises listed on the new third board need to make an announcement, so you see the case.
relevant persons involved in securities companies told reporters: “from the perspective of actual business development and external regulations, the design of gambling terms does not violate the regulatory requirements, and it is the choice of the invested enterprise and the investor in business negotiation.”
sponsor plus investment plus gambling attracted attention
Teres will issue 3.92 million additional shares this time, of which China Securities Co.Ltd(601066) will invest in 2.42 million shares.
Teres announced that the target of this issuance China Securities Co.Ltd(601066) investment is the company’s continuous supervision of the sponsor’s China Securities Co.Ltd(601066) securities alternative investment subsidiary.
According to the terms of the attached agreement, China Securities Co.Ltd(601066) investment and the shareholders of the company jointly set the business goal for the company as follows: from the date of signing the contract, the company will submit an IPO application to the Beijing stock exchange before December 31, 2022 and obtain formal acceptance.
If the above objectives are not achieved, China Securities Co.Ltd(601066) investment has the right to require the shareholders of the company to repurchase all or part of the equity of the company held by China Securities Co.Ltd(601066) investment due to this issuance at the price agreed in this paragraph in the form of a written notice (hereinafter referred to as the “repurchase notice”), and the written notice will take effect once issued. In addition to the right to claim repurchase, China Securities Co.Ltd(601066) investment also has the right to require tress shareholders to make joint payment after calculating the investment income during the actual occupation of funds at the annualized interest rate of 8% based on the subscription amount.
The announcement said that this supplementary agreement will be automatically suspended since the company submits the IPO guidance acceptance application to the local CSRC agency and obtains the no objection letter. If the company’s IPO application is not accepted, deliberated or withdrawn, invalid, terminated, rejected or not registered by Beijing stock exchange for any reason, this supplementary agreement will automatically resume its effectiveness. This supplementary agreement shall terminate automatically after the company has passed the deliberation of the Shanghai Municipal Committee of the Beijing stock exchange and completed the registration procedure of the CSRC, and shall be null and void from the beginning without any recovery clause.
Relevant persons involved in securities companies told reporters: “from the perspective of actual business development and external regulations, the design of gambling terms does not violate the regulatory requirements and is the choice of the invested enterprises and investors in business negotiations.”
“The core of the terms is to promote enterprises to report to the Beijing stock exchange, which is not a traditional bet linked to the success of performance or listing application,” the person said.
gambling is not uncommon
The Chinese reporter of the securities firm noted that this kind of phenomenon is not rare for the new third board enterprises. Not only China Securities Co.Ltd(601066) , since last year, securities companies including Soochow Securities Co.Ltd(601555) and Donghai securities have had at least three similar cases.
On March 25, 2021, heshunxing dingzeng, Soochow Securities Co.Ltd(601555) took shares as the host broker, with gambling terms: the enterprise should complete the public offering and enter the selection layer before May 1, 2022 (now Beijing stock exchange).
On December 15, 2021, the snow in Taihu Lake will increase, and the host broker is Soochow Securities Co.Ltd(601555) , Soochow Securities Co.Ltd(601555) takes shares. The gambling terms are that the company will apply for IPO materials at the end of 2023 or go public at the end of 2024.
In 2022, tisbo will increase its shares, and Donghai securities will invest in innovation, and Donghai securities will be the host broker. The former is an alternative investment subsidiary of the latter. The gambling clause is that the company will be listed before December 31, 2024.
The reporter noted that for the IPO enterprises proposed by the Beijing stock exchange, the shares of the sponsor are in line with the regulations. At the end of November last year, the CSRC issued the guidelines for the application of regulatory rules – institution No. 1 (revised in November 2021). According to the regulations, “if an issuer intends to make a public offering and be listed on the Beijing stock exchange, before and after the recommendation institution provides the recommendation service to the issuer, the recommendation institution or the securities company holding the recommendation institution, as well as the relevant subsidiaries of the above-mentioned institution, can invest in the issuer”.
As for the compliance of the gambling terms, a relevant person told reporters that the design of the terms did not violate the regulatory provisions.
Senior investment bankers also told reporters that gambling is a common phenomenon. Most of the investment and innovation institutions can follow the recommendation board in the process. However, these Sci-tech Innovation Board enterprises were not listed at that time, so there was no need to make an announcement, so we naturally didn’t know. The reason why the new third board case appears here is that the enterprises listed on the new third board need to announce relevant matters, and the fixed increase is a major matter.
According to the answers to some questions on initial business issued by the CSRC, if an investment institution has agreed on a gambling agreement and other similar arrangements when investing in an issuer, in principle, it requires the issuer to clean up before declaration, but if it meets the following requirements at the same time, it may not be cleaned up: first, the issuer does not act as a party to the gambling agreement; Second, there is no agreement in the gambling agreement that may lead to the change of the company’s control; Third, the gambling agreement is not linked to the market value; Fourth, the gambling agreement does not have any situation that seriously affects the issuer’s ability to continue operation or other situations that seriously affect the rights and interests of investors.
“Some gambling clauses require cancellation before declaration, but they can’t be generalized.” Senior investment bankers said.
recommendation and investment increase the income of securities companies
Investment plus recommendation, on the one hand, securities companies can obtain investment income, on the other hand, there is income from underwriting recommendation. According to the practice of Kechuang board, the investment income of securities companies is quite rich.
According to Zhu Haibin team of Anxin securities, the cumulative income of securities companies’ direct investment in the science and Innovation Board reached 149%. As of January this year, there had been 386 follow-up investment on the securities business science and innovation board, with a total allocated investment of RMB 18.442 billion, realizing a follow-up investment floating profit of RMB 27.487 billion, an average single floating profit of RMB 71.2 million, and the overall follow-up investment income reached 149%. The underwriting and recommendation fees totaled 26.583 billion yuan, with an average value of 70.5 million yuan.
The concentration of the top 10 securities companies in the follow-up investment market is as high as 60%, of which the total number of follow-up investment of the top 10 securities companies accounts for 63.7%. The highest are CITIC, Huatai, China Securities Co.Ltd(601066) ; The top 10 of follow-up investment income accounted for 74.0% in total, and the highest were CITIC, Haitong and CICC wealth, amounting to 3.79 billion yuan, 3.29 billion yuan and 3.21 billion yuan respectively.
Beijing stock exchange can also adopt the mode of “sponsor first and then direct investment”. Zhu Haibin said that this move can enhance the profitability of securities companies, untie their shareholding restrictions, and enhance their enthusiasm to participate in the fixed growth, market making and direct investment of the new third board. The direct investment of the Beijing stock exchange is expected to become a new growth point of securities companies’ investment banking, proprietary trading, direct investment and other businesses in the future. At the same time, securities companies can also “move forward” the direct investment, focusing on pre listing investment opportunities and reducing investment costs.
