As the initial sponsor of LETV, Ping An Securities may be suspended by the regulatory authorities for three months.
After several years of continuous decline, the net income of investment banking fees of Ping An Securities Co., Ltd. (hereinafter referred to as Ping An Securities) only exceeded the level in 2016 in 2020. Now, the company's qualification as a sponsor may be suspended for three months. The investment banking business of Ping An Securities seems to be quite ill fated.
According to relevant reports, the regulatory authorities recently issued a prior notice on administrative supervision to Ping An Securities, the initial sponsor of LETV, and planned to order Ping An Securities to make corrections and suspend the qualification of the sponsor for three months.
According to reports, Ping An Securities responded that the company had received a prior notice. At the same time, he said that in the past decade, the company has continued to establish and improve its internal control mechanism, and the level of compliance risk control has continued to improve. Based on the principle of customer first, the company will actively communicate with the supervision on the basis of laws and regulations, so as to better serve the development of the real economy.
The researcher of investment Times noted that the investment banking income of Ping An Securities fluctuated greatly in recent years. Moreover, in 2021, the handling fee and commission income of securities underwriting business decreased by 20.6% year-on-year.
In 2021, Ping An Securities realized a net profit of 3.829 billion yuan, a year-on-year increase of 23.4%. However, the growth rate has slowed significantly compared with 41.43% in 2019 and 30.56% in 2020.
The investment times sent a communication letter to Ping An Securities on the above regulatory penalties, investment bank income and other issues. As of the time of publication, no reply has been received.
investment banking revenue fluctuates greatly
Although LETV has been delisted to the old third board for more than a year, the aftershock has not yet occurred.
It is reported that Shenzhen Securities Regulatory Bureau recently issued a prior notice on administrative supervision to LETV IPO sponsor Ping An Securities, which plans to order Ping An Securities to make corrections and suspend the qualification of the sponsor for three months, identify the relevant sponsor representative and the then head of the sponsor business as inappropriate personnel for 5-10 years, and take measures such as regulatory talks with other relevant personnel in compliance business.
On April 12, 2021, LETV announced that it had received the decision on administrative punishment sent by Beijing regulatory bureau of China Securities Regulatory Commission on the same day. The decision on administrative punishment shows that the illegal facts of LETV after investigation include: financial fraud of LETV from 2007 to 2016, false records in the application for initial public offering and listing submitted and disclosed by LETV and the annual report from 2010 to 2016; LETV fails to disclose related party transactions as required; LETV's non-public offering of shares in 2016 constituted fraudulent issuance, etc.
On August 10, 2010, as the sponsor and lead underwriter, Ping An Securities submitted the recommendation letter of LETV to Shenzhen Stock Exchange, recommending LETV to be listed on the gem.
In addition to Ping An Securities being the sponsor of LETV's gem listing, Zhongde securities also served as the sponsor and co lead underwriter of LETV's 2016 non-public offering of shares. According to the relevant announcement, the CSRC plans to order China Germany securities to make corrections, give a warning, confiscate the business income of 5.6604 million yuan and impose a fine of 113208 million yuan. Give a warning to the two signing recommendation representatives and impose a fine of 150000 yuan respectively.
The financial report of Ping An Securities shows that the company's investment banking business income has fluctuated greatly in recent years.
From 2016 to 2020, the net income from service charges of Ping An Securities investment banking business was 1.32 billion yuan, 846 million yuan, 848 million yuan, 1.12 billion yuan and 1.476 billion yuan respectively. It can be seen that after a lapse of four years, the income returned to and exceeded the level in 2016.
According to the annual report of Ping An Insurance (Group) Company Of China Ltd(601318) 2021, the handling fee and commission income of Ping An securities underwriting business in that year was 997 million yuan, a year-on-year decrease of 20.6%.
net profit growth slowed down
Ping An Securities achieved a net profit growth rate slightly higher than that of the industry last year. However, the growth rate further slowed down on the basis of the decline in 2020.
According to the annual report of Ping An Insurance (Group) Company Of China Ltd(601318) 2021, Ping An Securities realized a net profit of 3.829 billion yuan that year, an increase of 23.4% year-on-year; The operating revenue was 20.253 billion yuan, a year-on-year increase of 23%. According to the data of China Securities Association, the net profit of the securities industry increased by 12.03% year-on-year.
Although the performance increased, the company had a number of operating expenses that year, and the growth rate was also rapid.
Among them, the expenditure of business and management fees was 5.823 billion yuan, a year-on-year increase of 19.2%; The financial expenses were 2.871 billion yuan, a year-on-year increase of 37%; Other expenditures amounted to 6.956 billion yuan, a year-on-year increase of 24.2%.
Business and management expenses include taxes and surcharges, management expenses, accounts receivable and other asset impairment losses in the segment income statement. Other expenses include the interest expense of selling and repurchasing financial assets and borrowing funds in the segment income statement, other business costs, impairment loss of investment assets, non operating income and non operating expenses, etc.
In fact, the net profit growth of Ping An Securities in 2021 has been slower than that of the previous two years.
From 2017 to 2020, the net profits of Ping An Securities were 2.123 billion yuan, 1.68 billion yuan, 2.376 billion yuan and 3.102 billion yuan respectively, of which the year-on-year growth rates in 2019 and 2020 were 41.43% and 30.56% respectively.
United credit rating Co., Ltd. (hereinafter referred to as united credit) said in the ninth credit rating report of short-term financing bonds of Ping An Securities Co., Ltd. in 2021 that the credit impairment provision of Ping An Securities is large, so it is necessary to pay attention to the company's credit business and bond investment risk.
The rating report shows that in recent years, the scale of credit impairment losses accrued by Ping An Securities has increased year by year. In 2020, the provision for impairment totaled 779 million yuan, including 566 million yuan of impairment loss of other debt investments and 149 million yuan of impairment loss of financial assets bought for resale. Among other debt investments, the position of corporate bonds is large.
United credit also said in the rating report that the debt scale and leverage level of Ping An Securities have increased significantly, and the proportion of short-term debt is relatively high. Since 2020, the company's debt financing scale has increased significantly, and its own asset liability ratio has increased significantly. Among them, short-term debt accounts for a relatively high proportion, and there is a certain risk of centralized cashing. It is necessary to pay attention to the company's liquidity management.
According to the 2020 annual report of Ping An Securities, the cash received by the company from issuing bonds was 72.394 billion yuan, a year-on-year increase of 1.32 times. At the same time, the cash paid for debt repayment was 52.814 billion yuan, a year-on-year increase of 1.17 times.
partial financial data of Ping An Securities in 2021
Data source: Ping An Insurance (Group) Company Of China Ltd(601318) Annual Report
