China Greatwall Securities Co.Ltd(002939)
(address: floors 10-19, South Tower, energy building, No. 2026, Jintian Road, Futian street, Futian District, Shenzhen, Guangdong Province) for professional investors in 2022
Prospectus for public issuance of corporate bonds (phase II)
Registered amount: 10 billion yuan
Amount of bonds issued: 1 billion yuan
Guarantee: no guarantee
Credit rating results: the issuer’s main credit rating is AAA, and the current bond’s credit rating is AAA. Issuer: China Greatwall Securities Co.Ltd(002939)
Lead underwriter: Guosen Securities Co.Ltd(002736)
Trustee: Guosen Securities Co.Ltd(002736)
Credit rating agency: United credit rating Co., Ltd
Signed on:
statement
The company will perform the obligation of information disclosure in a timely and fair manner. The company and all its directors, supervisors, senior managers or personnel performing the same duties guarantee that the information disclosure in the prospectus is true, accurate and complete, and there are no false records, misleading statements or major omissions.
The lead underwriter has checked the prospectus and its abstract, confirmed that there are no false records, misleading statements and major omissions, and assumed corresponding legal liabilities for its authenticity, accuracy and completeness.
The company promises not to directly or indirectly subscribe for the bonds issued by itself during the issuance of current bonds. The interest rate or price of bond issuance shall be determined by inquiry, agreement pricing, etc. the company will not manipulate the issuance pricing, operate in a dark box, seek illegitimate interests or transfer interests to other relevant stakeholders by means of holding on behalf of others, trust, etc., provide financial assistance to investors participating in the subscription directly or through other stakeholders, and implement other actions that violate fair competition Acts of undermining market order.
If the company has directors, supervisors, senior managers, shareholders with a shareholding ratio of more than 5% and other related parties to participate in the subscription of the bonds, the company will disclose the relevant subscription in the announcement of issuance results. The registration or examination of bond issuance by CSRC and Shenzhen Stock Exchange does not represent any evaluation of the investment value of bonds, nor does it indicate any judgment on the investment risk of bonds. Investors who wish to subscribe for the bonds shall carefully read the full text of this prospectus and relevant information disclosure documents, independently analyze the authenticity, accuracy and completeness of information disclosure, independently judge the investment value and bear any investment risks related thereto.
Investors who subscribe for or hold the bonds are deemed to have agreed to the rights and obligations in the prospectus, including the bond trustee agreement, the rules of the bondholders’ meeting and other relevant agreements on the rights and obligations of the issuer, bondholders, bond trustee and other subjects in the bond prospectus.
The company promises to perform its obligations and accept the supervision of investors in accordance with laws and regulations and the provisions of this prospectus.
Tips on major issues
Investors are requested to pay attention to the following major issues and carefully read the relevant chapters of “risk tips and instructions” in this prospectus.
1、 Basic financial information of the issuer
China Greatwall Securities Co.Ltd(002939) (hereinafter referred to as the “issuer” and the “company”) obtained the registration of issuing corporate bonds with a face value of no more than 10 billion yuan to professional investors with the consent of the China Securities Regulatory Commission (CSRC) in document zjxk [2021] No. 1276 on April 14, 2021. By the end of September 2021, the total shareholders’ equity of the company was 19.658 billion yuan, of which the total shareholders’ equity attributable to the parent company was 19.164 billion yuan, and the consolidated asset liability ratio was 70.26% (the total assets and liabilities were net of the funds for securities trading and underwriting), The asset liability ratio of the parent company is 70.74% (the total assets and liabilities are deducted from the funds for buying and selling securities and underwriting securities); Before the issuance of the bonds, the issuer’s average annual distributable profit in the last three fiscal years was 1.027 billion yuan (the average of the net profits of 586 million yuan, 992 million yuan and 1.502 billion yuan attributable to the owners of the parent company in 2018, 2019 and 2020), which is expected to be no less than 1.5 times the one-year interest of the bonds. The issuer’s financial indicators before the current issue comply with relevant regulations.
The issuer will issue the bonds in installments. ” China Greatwall Securities Co.Ltd(002939) 2022 public issuance of corporate bonds to professional investors (phase II)” (hereinafter referred to as “the bonds”) is the sixth issue under the bonds, and the issuance scale of the bonds is no more than RMB 1 billion (including RMB 1 billion). 2、 Rating
The subject rating of the bonds is AAA and the debt rating is AAA. Within the validity period of the credit rating report (one year from the date of issuance of the credit rating report), the company will continue to pay attention to the issuer’s operation and management status, external business environment and relevant information of the bonds. The concerns in this bond rating report are as follows:
1. Business is vulnerable to macroeconomic, policy changes and market fluctuations. The company’s securities industry is vulnerable to Chinese market fluctuations, policies and other factors, and the company’s future income is uncertain.
2. The company’s debt structure is short-term, so we need to pay attention to its liquidity management. In recent years, although the proportion of the company’s short-term debt has fluctuated and declined as a whole, the proportion is still high. There is a certain degree of centralized repayment pressure in the future, so we need to pay attention to its liquidity management.
According to the relevant requirements of the regulatory authorities and the joint credit for tracking rating, the joint credit will conduct a regular tracking rating within the duration of the current debt, within two months after the announcement of the annual China Greatwall Securities Co.Ltd(002939) report and no later than six months from the end of each fiscal year, and conduct an irregular tracking rating according to relevant conditions during the duration of the current debt.
In the event of significant changes in the issuer or the discovery or occurrence of events that may have a great impact on the issuer or the credit rating of the current debt, the joint credit will start the irregular tracking and rating procedure of the current bond, and the issuer shall timely notify the joint credit and provide relevant materials and corresponding materials. The irregular follow-up rating report and rating results of united credit will be disclosed in accordance with relevant regulations.
3、 The term of this bond is 5 years.
4、 The current bonds are unsecured bonds. Although at the time of issuance, the company has arranged debt repayment guarantee measures according to the actual situation to control and ensure the timely repayment of principal and interest of the bonds, during the duration of the bonds, the currently proposed debt repayment guarantee measures may be incomplete or unable to be performed due to uncontrollable changes in the market, policies, laws and regulations and other factors, This will have an adverse impact on the interests of the bondholders of the current period.
5、 In the past three years and the first period, the net cash flow from the issuer’s operating activities was -4.184 billion yuan, – 2.690 billion yuan, – 4.766 billion yuan and 273 million yuan respectively.
In 2018, the cash flow from the company’s operating activities was a net outflow, mainly due to the significant increase in the net increase in the purchase of financial assets measured at fair value and whose changes are included in the current profit and loss. In 2019 and 2020, the cash flow generated by the company’s operating activities was a net outflow, mainly due to the increase in the net increase of financing funds. In the last three years and the first period, the net cash flow from the issuer’s operating activities after deducting the financed funds was -5.560 billion yuan, 1.450 billion yuan, 2.228 billion yuan and 5.907 billion yuan respectively. In recent three years, the continuous net outflow of cash flow generated by the company’s operating activities is mainly due to the increase of corresponding outflow funds due to the fluctuation of the company’s agency trading of securities and the growth of margin trading business with the change of market conditions in recent years, which will not have an adverse impact on the company’s operating conditions and solvency.
6、 The bonds are issued to professional investors who open A-share securities accounts in Shenzhen Branch of China Securities Depository and Clearing Co., Ltd. and will not be placed preferentially to the shareholders of the company.
7、 After the issuance of the bonds, it is planned to be listed and traded in Shenzhen Stock Exchange. As the approval of the specific transaction and circulation of the current bonds needs to be carried out after the issuance of the current bonds, the company can not guarantee that the current bonds can be listed and traded as expected, nor can it guarantee that the current bonds can be actively traded in the secondary market, and the company’s bonds may not be actively traded in the secondary market or even cannot be traded continuously, Investors may face bond liquidity risk.
8、 In accordance with the provisions of the company law, the securities law, the administrative measures and other laws and regulations, as well as the provisions of this prospectus, in order to safeguard the legal rights enjoyed by bondholders and the rights agreed in this prospectus, the company has formulated the rules of bondholders’ meeting to enable bondholders to acquire the company’s bonds by subscription, trading or other legal means, It is deemed to agree to the bondholders’ meeting rules formulated by the company. The effective resolutions deliberated and adopted by the bondholders’ meeting in accordance with the procedures agreed in the bondholders’ meeting rules shall have the same binding force on all holders of the current bonds. The results of the bond trustee acting in accordance with the effective resolutions of the bondholders’ meeting shall be borne by all bondholders. Where there are other provisions in laws and regulations or otherwise agreed in the rules of bondholders’ meeting, such provisions or agreements shall prevail. In case of any inconsistency or conflict between the relevant provisions of the bondholders’ meeting rules and the relevant provisions of the prospectus, the provisions of the prospectus shall prevail; In case of any inconsistency or conflict with the bond trustee agreement or other agreements, unless the relevant contents have been clearly agreed and disclosed in the prospectus, the provisions of the bondholders’ meeting rules shall prevail.
9、 In order to specify the rights, obligations and liabilities for breach of contract among the issuer, the bondholders and the bond trustee, the company appointed Guosen Securities Co.Ltd(002736) as the bond trustee of the company’s bonds, and entered into the bond trustee agreement. Investors through subscription The acquisition of current bonds through trading or other legal means shall be deemed to have agreed to the bond trustee agreement formulated by the company.
10、 Investors who subscribe for or hold the corporate bonds shall be deemed to have agreed to the bond trustee agreement, the rules of bondholders’ meeting and other relevant agreements on the rights and obligations of the issuer, bondholders, bond trustee and other subjects in the bond prospectus. The resolutions made by the bondholders’ meeting in accordance with the provisions of the administrative measures and the procedural requirements of the meeting rules shall be binding on all bondholders.
11、 According to the measures for the administration of corporate bond issuance and trading, the measures for the administration of the appropriateness of securities and futures investors, the measures for the administration of the appropriateness of investors in the bond market of Shenzhen Stock Exchange and relevant laws and regulations, the bonds are only issued to professional investors, and ordinary investors are not allowed to participate in the issuance and subscription. After the bonds are listed, they will be subject to investor suitability management. Only professional investors can participate in the transaction, and the transaction behavior subscribed or purchased by ordinary investors is invalid.
12、 After the issuance of current bonds, the company will submit an application for listing and trading to Shenzhen Stock Exchange as soon as possible. The conditions for listing in the Shenzhen Stock Exchange (hereinafter referred to as the “comprehensive trading platform”) and the “comprehensive trading platform of bonds” in the Shenzhen Stock Exchange at the same time are met. However, before the listing of the bonds, the company’s financial situation, operating performance, cash flow and credit rating may change significantly. The company cannot guarantee that the listing application for bilateral listing of the bonds can be approved by Shenzhen Stock Exchange. If the bonds cannot be listed bilaterally at that time, the investors have the right to choose to sell the bonds back to the company. The investment risk and liquidity risk caused by changes in the company’s operation and income shall be borne by the bond investors themselves. The current bonds cannot be listed on other trading places except Shenzhen Stock Exchange.
13、 The issuer’s main credit rating and the current bond credit rating are AAA, which meet the basic conditions for pledge repo transactions. The specific conversion rate and other matters will be implemented in accordance with the relevant provisions of the registration authority. 14、 Corporate bonds are interest rate sensitive investments. Affected by the state’s macroeconomic operation, monetary policy, changes in the international environment and other factors, the market interest rate is likely to fluctuate. Bonds are interest rate sensitive investment varieties, and the change of market interest rate will directly affect the investment value of bonds. As the current bond is a fixed interest rate variety and has a long term, it may span more than one interest rate fluctuation cycle, and the investment value of the bond may change with the fluctuation of market interest rate during its duration, so that the bond value held by the current bond investors has a certain uncertainty.
15、 The operating performance of the company has a strong correlation with the performance of the securities market. The securities market is affected by many factors such as the macroeconomic environment, the degree of market development and investor behavior, showing a certain periodicity and volatility, which may lead to significant fluctuations in the operating performance of the securities company in the short term.
16、 Liquidity risk refers to the risk that although the company has solvency, it is unable to obtain sufficient funds in time or obtain sufficient funds in time at reasonable cost to cope with asset growth or pay due debts. Net capital management risk refers to the risk control index management with net capital and liquidity as the core implemented by the CSRC on securities companies. If the company’s financial situation fails to meet the regulatory requirements of risk indicators such as net capital, it will have an adverse impact on the company’s business development and operating performance.
17、 The securities industry is strictly regulated, and its business operation is strictly regulated by regulatory policies and other laws, regulations and policies. At present, China’s capital market and securities industry are in an important stage of development, and an all-round and multi-level securities industry supervision and management system has been gradually established.
With the steady development of China’s market economy and the continuous promotion of reform and opening up, the legal environment of the securities industry will continue to improve and the regulatory system will continue to change. The gradual improvement of regulatory policies, laws and regulations will be conducive to the sustainable, stable and healthy development of the company in the long run, but it will also have an impact on the business environment and competition pattern of the company, and bring uncertainty to the business development, operating performance and financial status of the company. If the company fails to adapt to the changes of laws, regulations and regulatory policies as soon as possible, it may increase the company’s operating costs, reduce its profitability and restrict its business expansion. In addition, if the relevant tax system, business license system, foreign exchange system, interest rate policy and charging standard change, it may have an impact on the development of macro-economy, securities market and securities industry, and then on the development of various businesses of the company, bringing certain uncertainty to the business performance of the company.
18、 The issuer China Greatwall Securities Co.Ltd(002939) is a listed company in Shenzhen Stock Exchange. The company name is China Greatwall Securities Co.Ltd(002939) and the company code is 002939 SZ。 As of this prospectus
