After the placement of Citic Securities Company Limited(600030) a + H shares, the placement of Orient Securities Company Limited(600958) shares is also fast.
On March 7, Orient Securities Company Limited(600958) announced that the company’s application for A-share allotment had been approved, and the company would make another announcement after receiving the official document approved by the CSRC. Previously, the company’s application for H-share allotment was approved by the CSRC in February 2022.
raised funds are mainly invested in four aspects
According to the plan issued by Orient Securities Company Limited(600958) in March last year, the total amount of funds raised in this allotment is expected to be no more than 16.8 billion yuan, and the proportion of allotment is no more than 3 shares for every 10 shares. After deducting the issuance expenses, it is planned to be used to increase the company’s capital, supplement working capital, optimize the asset liability structure, serve the real economy, and comprehensively improve the company’s market competitiveness and anti risk ability. The specific fund-raising investment is as follows:
Orient Securities Company Limited(600958) also introduced in detail the specific reasons for using the fund-raising in the above four directions.
Investment banking and financing services, including investment banking, investment banking and underwriting services, are not limited to increasing the total investment of more than RMB 6 billion in the whole investment chain, but not limited to investment banking and financing services.
Second, no more than 6 billion yuan is proposed to increase capital investment in wealth management and securities finance. Including but not limited to wealth management, margin trading, financial technology, etc., to further promote the transformation of the company’s wealth management business.
Third, no more than 3.8 billion yuan. It is planned to further promote the development of self operated investment business by increasing the capital investment in sales and trading business.
Fourth, no more than 1 billion yuan is proposed to be used for other working capital arrangements. The company will pay close attention to the changes of regulatory policies and market situation, reasonably allocate the raised funds of this issuance in combination with the company’s strategic planning and actual development, timely supplement the company’s demand for working capital in the process of business development, and ensure the orderly development of various businesses.
Orient Securities Company Limited(600958) pointed out that by replenishing capital through this allotment, the company will further improve the business scale of sales transactions and capital intermediaries, actively explore innovative directions such as foreign exchange and derivatives, and enrich hedging means and trading strategies; At the same time, in terms of wealth management, asset management and investment banking, the company will continue to expand the depth and breadth of business, accelerate the transformation around the customer base, products, investment advisers and other fields, and build a large investment banking ecosystem of the whole industrial chain. By making a forward-looking layout and scientifically and effectively allocating the use of funds, it will help the company optimize its business structure and profit model and effectively improve the level of return on assets.
In addition, in the stock allotment plan, Orient Securities Company Limited(600958) also pointed out that Shenneng (Group) Co., Ltd., the largest shareholder of the company, would promise to fully subscribe for the placeable shares in the stock allotment plan in cash before the general meeting of shareholders.
In the reply announcement to the feedback of the CSRC in January this year, Orient Securities Company Limited(600958) supplementary disclosed the proportion of Allotment: 10 A shares and 2.8 H shares, and the total number of allotment shares was 1.958 billion, including 1.671 billion A-Shares and 287 million H shares.
disclosed that seven penalties have been rectified
Due to the mediocre performance of the securities sector last year, after Citic Securities Company Limited(600030) issued the announcement of the largest a + H share allotment in the history of A-Shares at the end of February 2021, Orient Securities Company Limited(600958) this allotment plan has also attracted extensive attention in the market. Supervision also inquired about some focus issues that are easy to trigger public opinion.
In January this year, Orient Securities Company Limited(600958) issued a reply announcement to the feedback of the CSRC. It can be seen that the CSRC mainly focused on whether the previous punishment affected the issuance of allotments and other issues.
In response to the feedback, Orient Securities Company Limited(600958) disclosed seven penalties in total. One of the more striking is that Dongfang Citigroup, the predecessor of Dongfang investment bank, a subsidiary of Orient Securities Company Limited(600958) holding, was subject to administrative punishment for serving as the financial adviser of Guangdong media.
According to the decision on administrative punishment, the CSRC ordered Dongfang Citigroup to correct the problem of false records in the financial advisory report issued by Dongfang Citigroup for Guangdong Guangzhou Daily Media Co.Ltd(002181) major asset restructuring, confiscated its business income of 5.95 million yuan and imposed a fine of 17.85 million yuan. Oriental Citigroup has paid the business income and fine of the above-mentioned forfeiture in November 2018.
Orient Securities Company Limited(600958) pointed out that since receiving the decision on administrative punishment, China Eastern Investment Bank has timely paid the income from fines and fines, actively rectified and standardized, and taken effective measures to avoid the recurrence of similar problems. In combination with the guidelines on internal control of investment banking business of securities companies and other relevant provisions, China Eastern Investment Bank has comprehensively revised and improved the management system and process of investment banking business, continuously strengthened internal audit and strengthened the control of financial consulting business, which has effectively avoided the recurrence of similar problems.
However, there are also very small penalties that have been asked: for example, in January 2018, due to the illegal setting of door plaque, according to Article 49 of the regulations of Shaanxi Province on the administration of urban public space, Orient Securities Company Limited(600958) Xi’an Taoyuan South Road Securities Business Department received a ticket from the comprehensive Administrative Law Enforcement Bureau of urban management of Lianhu District, Xi’an, and was ordered to correct and fined 3000 yuan. In March 2020, due to failure to fulfill the obligation of banning smoking, according to Article 18 of the regulations of Shanghai Municipality on smoking control in public places (2016 Amendment), Orient Securities Company Limited(600958) Shanghai Minhang District Heqing Road Securities Business Department was fined 2100 yuan by Minhang District Health Commission.
Orient Securities Company Limited(600958) ‘s sponsor and lawyer issued opinions after verification: for the administrative punishment of the issuer during the reporting period, the relevant subsidiaries of the issuer and the securities business department have paid the fine in time and seriously implemented the rectification measures. The above administrative punishment is not a major illegal act that constitutes an obstacle to the issuance of shares, There is no violation of Article 9 of the measures for the administration of securities issuance by listed companies.
The approval of the allotment of Orient Securities Company Limited(600958) a + H shares also shows that the CSRC has recognized the statement of the sponsor and lawyers that the above administrative punishment will no longer affect the current operation of the company.
last year’s net profit increased by 97%, exceeding market expectations
It is worth mentioning that before announcing the approval of A-share allotment, Orient Securities Company Limited(600958) has released a performance express, which is interpreted by the market as “exceeding expectations”.
According to the performance express, in 2021 Orient Securities Company Limited(600958) achieved a revenue of 24.37 billion yuan, a year-on-year increase of 5.36%, and a net profit attributable to the parent company of 5.37 billion yuan, a year-on-year increase of 97.3%.
Huajin Securities pointed out that there are three reasons for the substantial growth of Orient Securities Company Limited(600958) performance: first, the active capital market and the growth of major businesses. In the first three quarters of last year, the company’s brokerage, investment banking and asset management revenue increased by 69.3%, 53.8% and 28.6% respectively year-on-year. Second, the investment income of huitianfu increased. As of February 11, huitianfu’s non monetary fund management scale was 614.47 billion yuan and the stock + hybrid fund management scale was 329.48 billion yuan, ranking fifth in the industry. Third, the provision for credit impairment decreased. The company made provision for credit impairment of 260 million yuan in the first three quarters of last year, a year-on-year decrease of 75.6%, mainly due to the year-on-year decrease in the provision for impairment loss of stock pledge business.
Huajin securities therefore raised the company’s investment banking, asset management and other business income and lowered the company’s credit impairment provision. Based on this, Huajin securities raised its profit forecast from 2022 to 2023 to 5.834 billion yuan and 6.262 billion yuan, with an increase of 19.5% and 15.5%. It also pointed out that Orient Securities Company Limited(600958) current valuation has been at a low level in the past five years and maintained the “Buy-A” rating.
