On April 18, the large financial sector weakened collectively, led by banks and non bank sectors, and “Yinmao” China Merchants Bank Co.Ltd(600036) fell by more than 7%, falling to the hot search of microblog.
In addition, Orient Securities Company Limited(600958) today sealed the limit, which also attracted market attention. On April 17, Orient Securities Company Limited(600958) issued a share allotment announcement of 16.8 billion yuan, which is the second largest share allotment financing in the history of the securities industry, second only to Citic Securities Company Limited(600030) the 27.3 billion yuan share allotment completed in March this year.
for today’s stock price limit, Orient Securities Company Limited(600958) replied to the Chinese reporter of the securities firm: “this allotment is a powerful move for the company to deal with the competition pattern of the industry and improve its comprehensive competitiveness. It is of great significance for the company to enhance its capital strength, expand its business scale and improve its anti risk ability. On the premise of meeting the investment direction of the raised funds, the company will do a good job in the investment and use of funds and improve its roe level in combination with the development direction of the industry and the company.”
Some investment advisers said that the stock price of securities companies fell sharply on the second trading day after the issuance of the allotment announcement. First, the implementation of the allotment may lead to dilution of shareholders’ immediate return, which may lead to short-term pressure on the stock price before the equity registration date, but the short-term adjustment does not change the long-term trend.
brokerage sector fell collectively
For the 5%
It is worth mentioning that Orient Securities Company Limited(600958) opened low in the morning of the 18th, then weakened all the time, hovered on the edge of the limit, and closed the limit in the afternoon.
Orient Securities Company Limited(600958) led the decline today. In addition to market factors, it is also related to its allotment. On April 17, Orient Securities Company Limited(600958) disclosed the A-share allotment instruction and issuance announcement.
announcement shows that the issuance price of this allotment is 8.46 yuan / share Orient Securities Company Limited(600958) intends to place 2.8 shares per 10 shares to all shareholders based on the total share capital of the issuer’s A-Shares after the closing of the Shanghai Stock Exchange on April 20, 2022 (t day). The total number of shares that can be placed is about 1.671 billion, all of which are tradable shares with unlimited conditions
The announcement shows that according to the relevant regulations of Shanghai Stock Exchange, the trading of Orient Securities Company Limited(600958) a shares will be stopped during the payment period of the A-share allotment and the online clearing day, that is, from April 21 (T + 1) to April 28 (T + 6) in 2022. The trading of A-Shares of the company will resume from the opening of the market on April 29.
For today’s stock price limit, Orient Securities Company Limited(600958) replied to the Chinese reporter of the securities firm: “this allotment is a powerful move for the company to deal with the competition pattern of the industry and improve its comprehensive competitiveness. It is of great significance for the company to enhance its capital strength, expand its business scale and improve its anti risk ability. On the premise of meeting the investment direction of the raised funds, the company will do a good job in the investment and use of funds and improve its roe level in combination with the development direction of the industry and the company.”
The Chinese reporter of brokerage noted that Orient Securities Company Limited(600958) share price is currently at a low level due to the impact of the market and the epidemic. The price of this allotment is low, with a price to book ratio of 1 times Pb Zheshang Securities Co.Ltd(601878) in the research report released on April 15, it is pointed out that Orient Securities Company Limited(600958) has outstanding asset management advantages, is optimistic about the company’s performance and valuation improvement under the general trend of wealth management development, and is given a buy rating with a target price of 14.8 yuan
the second largest share allotment plan in the history of securities industry is about to be implemented
According to the announcement, Orient Securities Company Limited(600958) this allotment is a simultaneous issuance of a + H shares, and the total amount of funds raised by the allotment is expected to be no more than 16.8 billion yuan, of which the total amount of funds raised by the A-share allotment is no more than 14.333 billion yuan and the total amount of funds raised by the H-share allotment is no more than 2.467 billion yuan.
The Chinese reporter of the securities firm noted that Orient Securities Company Limited(600958) this 16.8 billion yuan allotment scale is the second largest allotment financing in the history of the securities industry. Second only to Citic Securities Company Limited(600030) the 27.3 billion yuan allotment completed in March this year. According to the announcement on the results of the allotment of shares on March 3 of Citic Securities Company Limited(600030) 3, the total amount of funds raised for the allotment of A-Shares was 22.4 billion yuan, and the total amount of funds raised for the allotment of H shares was 6.04 billion Hong Kong dollars (equivalent to about 4.93 billion yuan).
Orient Securities Company Limited(600958) allotment prospectus shows that the main purposes of the raised funds include: investment banking business (no more than 6 billion yuan), wealth management and securities finance business (no more than 6 billion yuan), sales and trading business (no more than 3.8 billion yuan) and supplementary working capital (no more than 1 billion yuan)
Orient Securities Company Limited(600958) said that by replenishing the capital through the 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 its business, accelerate the transformation around 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.
march 30, Orient Securities Company Limited(600958) disclosed the annual report of 2021, and many businesses performed well. The annual report shows that in 2021, Orient Securities Company Limited(600958) achieved an operating revenue of 24.370 billion yuan and a net profit attributable to the parent company of 5.371 billion yuan, with a year-on-year increase of 5.34% and 97.26% respectively; Roe (weighted average return on net assets) reached 9.02%, with a year-on-year increase of 4.17 percentage points. Both net profit and roe reached a new high since 2016
At the same time, the net profits of asset management (Dongfanghong asset management), huitianfu fund, futures and innovation investment of Dongzheng Securities Co., Ltd. reached the best level in history, the income from selling financial products on a commission basis increased by 36%, and the characteristics of big wealth management were further deepened.
there is also a brokerage waiting in line to allot shares
Data show that since 2021, a total of 7 securities companies have implemented share allotment or announced share allotment plans.
Among them, Citic Securities Company Limited(600030) , Soochow Securities Co.Ltd(601555) , Hongta Securities Co.Ltd(601236) , Huaan Securities Co.Ltd(600909) share allotment plan has been implemented, and Caitong Securities Co.Ltd(601108) share allotment has been successfully issued in the near future, with a subscription ratio of more than 97.9% Orient Securities Company Limited(600958) share allotment is under implementation, and China Industrial Securities Co.Ltd(601377) has issued a share allotment plan.
on April 11, Caitong Securities Co.Ltd(601108) issued the announcement on the issuance results of A-share allotment. The Caitong Securities Co.Ltd(601108) shareholders participated in the allotment at the price of 6.80 yuan per share at the proportion of 3 shares per 10 shares. The effective subscription amount of Caitong Securities Co.Ltd(601108) allotment was 1.055 billion shares and the subscription amount was 7.172 billion yuan
looking back on the past, it is quite common for securities companies to fall sharply after the announcement of allotment
On December 9, Soochow Securities Co.Ltd(601555) issued a share allotment announcement. It is estimated that the fund raised by the company’s proposed share allotment will not exceed 8.5 billion yuan, the share allotment ratio is 10 to 3, and the share allotment price is 7.19 yuan / share. The next day (December 10, 2021), Soochow Securities Co.Ltd(601555) fell by more than 5% to the closing, with the highest decline of 7% on that day.
As another example, on August 24, 2021, China Industrial Securities Co.Ltd(601377) announced the stock allotment plan, and the next day China Industrial Securities Co.Ltd(601377) fell to the limit in the morning trading.
Some investment advisers of securities companies said that the stock price of securities companies fell sharply on the second trading day after issuing the stock allotment plan or stock allotment announcement. Firstly, the implementation of stock allotment may lead to dilution of shareholders’ immediate return, and have a negative impact on the company’s roe in the short term. Some shareholders, especially some minority shareholders, are not enthusiastic about participation, which may lead to short-term pressure on the stock price before the equity registration date, and the equity concentration will rise.
The above-mentioned persons also mentioned that, however, the short-term adjustment of allotment securities companies still does not change the long-term optimistic trend of securities companies. After securities companies raise funds through allotment, the raised funds will be mainly used to develop investment banking, capital intermediary and other businesses, which will enhance the long-term competitiveness of securities companies.
