(address: room 10000, building 8, No. 319, Dongxin Street, Xincheng District, Xi’an City, Shaanxi Province)
(stock abbreviation: Western Securities Co.Ltd(002673) ; Stock Code: 002673)
Prospectus for public issuance of corporate bonds (phase I) to professional investors in 2022
The issuance amount of current bonds shall not exceed (including) 2.5 billion yuan
No guarantee
Subject rating of credit rating result: AAA; Rating outlook: stable
Debt rating: AAA
Issuer Western Securities Co.Ltd(002673)
Lead underwriter / Bookrunner / bond trustee Orient Securities Company Limited(600958) underwriting sponsor Co., Ltd
Credit rating agency united credit rating Co., Ltd
Lead underwriter / Bookrunner / bond trustee
(address: floor 24, No. 318, south Zhongshan Road, Huangpu District, Shanghai)
Signed on:
Statement
This prospectus and its abstract are in accordance with the company law of the people’s Republic of China, the securities law of the people’s Republic of China (revised in 2019), the measures for the administration of corporate bond issuance and trading, and the reference form of prospectus No. 1 of the business guide for the review of corporate bond issuance and listing of Shenzhen Stock Exchange The Listing Rules of corporate bonds of Shenzhen Stock Exchange (revised in 2018) and other current laws and regulations are prepared in combination with the actual situation of the issuer.
According to the provisions of the securities law of the people’s Republic of China (revised in 2019), after the bonds are issued according to law, the issuer shall be responsible for the changes in the operation and income of the issuer, and the investors shall be responsible for the investment risks caused by the changes.
The issuer will perform the obligation of information disclosure in a timely and fair manner. The issuer 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 verified 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 issuer 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 issuer 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 will not implement other actions that violate fair competition Acts of undermining market order.
If the issuer 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 issuer 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 current corporate bonds shall be deemed to agree to 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 above documents and the report of bond trustee affairs are available at the bond trustee, and the bondholders have I
Right of access at any time.
The issuer promises to perform its obligations and accept the supervision of investors in accordance with laws and regulations and the provisions of this prospectus.
Except for the company and the lead underwriter, the company has not entrusted or authorized any other unit or individual to provide information not listed in this prospectus and / or make any explanation to this prospectus. If investors have any questions about this prospectus, they should consult their own securities brokers, lawyers, professional accountants or other professional consultants. When evaluating and purchasing the bonds, investors shall carefully consider the risk factors described in section I of this prospectus.
II
Tips on major events
Investors are invited to pay attention to the following major issues and carefully read the relevant chapters such as “risk factors” in this prospectus. 1、 The issuer’s current bond issue was approved and registered by China Securities Regulatory Commission on December 9, 2021 (zjxk [2021] No. 3878). The scale of this bond issue shall not exceed RMB 15 billion (inclusive), and the scale of this bond issue shall not exceed RMB 2.5 billion (inclusive). The bonds are issued in installments and will be completed within 24 months from the date when the CSRC agrees to register.
The main rating of the issuer of the bonds is AAA, and the credit rating of the corporate bonds issued to the public is AAA. Prior to the issuance of the bonds, the issuer’s net assets at the end of the latest period were 26.772 billion yuan, with a consolidated asset liability ratio of 53.93% and a parent company asset liability ratio of 53.04%. Before the issuance of the bonds, the issuer’s average annual distributable profit in the last three fiscal years was 643 million yuan (the average net profit attributable to the owner of the parent company in the audited consolidated statements for 2018-2020), 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 issuance of the current bonds comply with relevant regulations.
2、 Affected by the overall operation of the national economy, national macroeconomic operation, monetary policy, financial policy and changes in the international environment, the market interest rate is likely to fluctuate. As the current bond is a fixed interest rate bond, the fluctuation of market interest rate may make the actual investment income of the current bond uncertain.
3、 United credit rating Co., Ltd. rated the main body of the bonds as AAA, and the credit rating of the corporate bonds issued to the public was AAA.
During the duration of this (issue) bond, Lianhe credit will conduct a regular follow-up rating within two months after the announcement of the annual Western Securities Co.Ltd(002673) report and no later than six months from the end of each fiscal year, and conduct an irregular follow-up rating according to relevant conditions during the duration of this (issue) bond.
Western Securities Co.Ltd(002673) relevant financial reports and other relevant materials shall be provided according to the requirements of the list of joint credit tracking and rating materials. If Western Securities Co.Ltd(002673) or the current (current) debt changes significantly, or major events that may have a great impact on Western Securities Co.Ltd(002673) or the credit rating of the current (current) debt occur, Western Securities Co.Ltd(002673) shall timely notify the joint credit and provide relevant materials. United credit will pay close attention to Western Securities Co.Ltd(002673) ‘s operation and management status, external business environment and information related to the current (current) debt. If it is found that Western Securities Co.Ltd(002673) has changed significantly, or that there are or appear events that may have a great impact on Western Securities Co.Ltd(002673) or the credit rating of the current (current) debt, united credit will conduct necessary investigation and timely analyze the event, Confirm or adjust the credit rating results according to the facts.
If Western Securities Co.Ltd(002673) fails to provide tracking rating data in time, resulting in the inability of joint credit to judge Western Securities Co.Ltd(002673) or the change of the current (current) debt credit rating, joint credit may terminate the rating.
III
The tracking rating report of this (issue) bond by united credit will be posted on the company’s website (www.lhratings. Com.) And the website of the exchange, and the time of announcement on the website of the exchange shall not be later than that on the company’s website (www.lhratings. Com) The time of public disclosure in other trading places, media or other occasions; Meanwhile, the tracking rating report will be submitted to Western Securities Co.Ltd(002673) and regulatory authorities.
4、 The current bonds are unsecured bonds, and no mortgage, pledge and other credit enhancement measures have been taken. During the issuance of the bonds, the company has arranged debt repayment guarantee measures according to the actual situation to control and reduce the principal and interest repayment risk of the bonds. However, during the duration of the bonds, the currently proposed debt repayment guarantee measures may not be implemented or fully implemented due to uncontrollable changes in the market, policies, laws and regulations, which may affect the interests of bondholders. 5、 China’s capital market is subject to certain volatility due to the impact of macroeconomic development, economic and industrial policies, China’s foreign economic environment and investment psychology. The depression of the overall economy and capital market and the change of industrial policies may lead to the decline of customer trading volume, the reduction of market investment and financing activities, the decline of securities investment income, the shrinkage of the scale of asset management business and other adverse circumstances, which will affect the income of securities brokerage business, capital intermediary business, investment banking business and asset management business of securities companies Various business incomes such as self operated business income bring uncertainty, which affects the profitability of the company.
Six, since January 2020, New Coronavirus pneumonia has erupted in China. At present, China’s epidemic prevention and control is effective, and production and life are becoming normal. However, the situation of epidemic prevention and control in foreign countries is still grim. If it is not controlled continuously, it may have a significant impact on the world economy and capital markets. Under the pattern of global economic integration, the changes of global economy and capital market will also have many uncertain effects on China’s economy and A-share market. If the epidemic continues unchecked, it will have a more serious adverse impact on the world and China’s economy and A-share market, and may have a greater adverse impact on the operation of the issuer.
7、 The risk that the issuer’s net cash flow from operating activities is negative. From January to September in 2018, 2019, 2020 and 2021, the net cash flows from operating activities in the company’s consolidated statements were RMB 3.172 billion, RMB 2.998 billion, – 1.139 billion and -12.96 billion respectively. During the reporting period, the net cash flow from operating activities in the company’s consolidated statements decreased significantly, and the net cash flow from operating activities in 2020 and January September 2021 showed a negative value.
During the duration of the bonds, the company’s net profit may fluctuate greatly under the influence of factors such as the securities market, and the company’s operating cash flow may show a net outflow trend, resulting in certain risks in the repayment of the bonds.
8、 Risk of restricted assets. By the end of June 2021, the book value of the issuer’s restricted assets totaled 17783644700 yuan, accounting for 26.60% of the total assets at the end of the period and 67.18% of the net assets. The above assets with limited ownership are mainly trading financial assets and other creditor’s rights investments sold and repurchased pledges. If the issuer’s own operation or external financing and credit environment changes significantly in the future, it may affect the ownership of the issuer’s restricted assets.
9、 Risk of interest bearing liabilities. By the end of the reporting period, the issuer’s interest bearing debt was RMB 27.532 billion, accounting for 59.62% of the total liabilities, of which the interest bearing debt due within one year was RMB 23.528 billion, accounting for 85.46% of the total interest bearing debt. The issuer has good financing ability, and the scale and level of liabilities also have industry attributes. However, due to the large scale of interest bearing and short-term liabilities, the issuer has a certain repayment risk.
10、 Risk of asset impairment. From January to September 2018, 2019, 2020 and 2021, the asset impairment losses (including credit impairment losses) accrued by the company were 490 million yuan, 653 million yuan, 260 million yuan and – 18 million yuan respectively, which were large, mainly due to the large amount of impairment losses accrued by the company’s stock pledge repurchase and other businesses, but the asset impairment losses accrued showed a downward trend.
During the reporting period, due to the tightening of regulatory policies, financial deleveraging, changes in domestic and foreign macro policies and other factors, the activity of the stock market decreased significantly, the risk of stock pledge closing positions was continuously exposed, and it was more difficult to prevent and deal with various risk events. The company’s credit trading business actively slowed down the pace of business expansion, comprehensively sorted out the internal control management system, actively implemented the regulatory requirements such as business rectification, adjusted the risk control indicators in combination with the market environment, and continued to strengthen the risk prevention and control of stock pledge business.
In the future, if the prosperity of the securities market declines due to major adverse changes in the macroeconomic situation, large fluctuations in the financial market and other factors, or major risk events occur to the customers of the company’s stock pledge repurchase and other businesses, the company may have a certain risk of withdrawing asset impairment reserves in the future, which may affect the company’s operating performance. 11、 Risk of changes in the fair value of the company’s assets. At the end of September 2021, the balance of trading financial assets with consolidated criteria accounted for 53.39% of the total assets, accounting for a large proportion. If the fair value of trading financial assets changes significantly, the company’s current profit and loss and net asset scale will face significant fluctuation risks, which may affect the company’s solvency.
12、 Risks of pending litigation and arbitration matters. As of June 30, 2021, the company had litigation and arbitration matters as the defendant, which may have an adverse impact on the company’s financial situation. For details, see “IX. external guarantee, pending litigation, arbitration and other major contingencies or commitments” in “section V financial accounting information” of this prospectus. The above litigation cases of the company are mainly caused by the company’s engagement in investment banking business. Because the customers of the company as the lead underwriter and trustee constitute a material breach of corporate bonds, the company, as the lead underwriter and trustee, is sued and jointly and severally liable for compensation, although the company actively responds to litigation and arbitration cases, The cases involved in the lawsuit still lose the lawsuit and bear joint and several liability, which will affect the company’s financial situation or affect the company in extreme cases
