Industrial convertible bonds, a 50 billion yuan big Mac, were officially listed and traded today.
This is also the largest record convertible bond variety after Shanghai Pudong Development convertible bond of 50 billion yuan. It is precisely because of its large scale that Societe Generale convertible bonds have become close to “one household, one signature” convertible bonds. Therefore, investors in the convertible bond market call it the first red envelope in the new year.
Societe Generale convertible bonds just got the approval last month and officially went public this month, which greatly exceeded the market expectation. It is noteworthy that the recent market trend is also more favorable for the listing of Societe Generale convertible bonds. Recently, the valuation of the convertible bond market has been rising. At the same time, the expectation of steady growth is driving listed banks out of a wave of rising market.
According to the forecast reports of several institutions, the cautious expectation is around 103 yuan, while the optimistic expectation is that it may rise to 110 yuan, and the profit of one-hand (10) Societe Generale convertible bonds can reach 100 yuan.
hit the new family’s new year red envelope
On January 11, Industrial Bank Co.Ltd(601166) issued a public announcement on the listing of A-share convertible corporate bonds, which shows that the bank’s convertible corporate bonds “industrial convertible bonds” will be listed and traded on the Shanghai Stock Exchange from January 14.
With a scale of 50 billion yuan and a rating of AAA, Societe Generale is another super bank convertible bond in the market. The issuance scale of 50 billion yuan also makes it the largest single issuance of convertible bonds in the convertible bond market in 2021, and it is also one of the largest convertible bonds in the current market.
The issuance of Societe Generale’s convertible bonds was very efficient. After obtaining the issuance approval from the CSRC on December 15, 2021, the issuance of convertible bonds was launched only one week later. The issuance is divided into three parts, including priority placement by old shareholders, online issuance and offline issuance.
The issuance results show that the placement of old shareholders accounts for 45.43%, becoming the biggest winner; Online new investors accounted for 21.28%; Offline accounts for 33.29%. The final winning rate was 0.09857132%, close to the level of “one household one signature”. Among them, there were 10.91 million new investors online.
Statistics show that with the surge in the number of new households involved, the winning rate of new convertible bonds has fallen to the probability level of “one in 25”.
“The 50 billion yuan big Mac filled every organization with expectations. We actively participated in the subscription, but the winning rate was better than previously expected.” A private placement source said.
Today is the first day of listing of Societe Generale convertible bonds. Its market performance will test the quality of this new year’s red envelope.
two good escorts
Industrial Bank Co.Ltd(601166) is the first listed bank to release the 2021 annual performance express.
Industrial Bank Co.Ltd(601166) said that last year, the company actively responded to the changes in the situation and the challenges of the epidemic, earnestly implemented the national macro-control policies and financial supervision requirements, strengthened the company’s “1234” development strategy, promoted high-quality development and transformation, continued to adjust and optimize the business structure, and realized the coordinated and healthy development of scale, efficiency and quality.
The performance express shows that in 2021, the company achieved a net profit attributable to the shareholders of the parent company of 82.680 billion yuan, a year-on-year increase of 24.10%, and its profitability remained at a good level. By the end of 2021, the total assets of the company were 8601.324 billion yuan, an increase of 8.96% over the end of the previous year, including 4428.183 billion yuan of loans in domestic and foreign currencies, an increase of 11.66% over the end of the previous year. The asset quality continued to improve, and the company’s non-performing loan balance was 48.714 billion yuan, a decrease of 942 million yuan compared with the end of the previous year; The non-performing loan ratio was 1.10%, down 0.15 percentage points from the end of the previous year; The provision coverage rate was 268.73%, an increase of 49.90 percentage points over the end of the previous year.
This week, the performance express of listed banks was intensively released, and the performance growth of Industrial Bank Co.Ltd(601166) only lagged behind Bank Of Jiangsu Co.Ltd(600919) and Ping An Bank Co.Ltd(000001) .
Zheshang Securities Co.Ltd(601878) Liang Fengjie, chief analyst of banking industry, said that “steady growth” is the most definite main line in 2022. On this basis, he is optimistic about the absolute income of the banking sector in 2022, and there may be relative income in stages. Industrial Bank Co.Ltd(601166) will be a competitive bank in this round of market. In terms of development model, Societe Generale’s “commercial bank + investment bank” strategy is expected to become a leader in public comprehensive finance from model to comprehensive promotion; In terms of assets, Societe Generale has made a forward-looking layout of green finance and grasped the “urban investment real estate” in the next decade.
According to the report released by Tianfeng Securities Co.Ltd(601162) , although the year-on-year growth rate of the company’s total assets and total liabilities in the fourth quarter of last year decreased compared with the first three quarters, this is only a phased phenomenon. In the long run, good asset quality and abundant capital have laid a solid foundation for the company’s strategic transformation and steady development.
Another good news is that the convertible bond market is rising. At present, there is no subject matter below the face value in the market. The latest data show that the lowest market price is urban land convertible bonds, with a price of 101.91 yuan each.
“From this point of view, the probability of breaking new bonds is very low. The winning account is nothing more than making a lot of money.” A new investor in convertible bonds is full of expectations for the market on the 14th.
how to price industrial convertible bonds?
According to the calculation of the positive stock price, as of the closing on the 13th, the value of Societe Generale’s convertible bonds to shares was 83.2615 yuan, the value of pure debt was 94.12 yuan, the corresponding conversion premium rate was 20%, and the pure debt premium rate was 6.24%.
“In fact, there are not many industrial convertible bonds that can be benchmarked. The partial debt attributes of Shanghai Pudong Development convertible bonds and CITIC convertible bonds in joint-stock banks are strong. The only comparable one is Everbright convertible bonds.” An institutional source told reporters.
At the same time, some institutions in the market believe that they can also refer to the historical convertible bonds that have been successfully converted into shares, such as Pingyin convertible bonds.
How big can this red envelope be? Several institutions have given pricing expectations.
Guosheng Securities said in the report that with reference to the situation of comparable convertible bonds, it is expected that the conversion premium rate of Societe Generale convertible bonds on the first day of listing will be 28% to 32%, corresponding to the price center of 107 yuan to 111 yuan, belonging to the middle price balanced convertible bonds. Everbright Securities Company Limited(601788) using the pure debt premium rate to estimate the listing price of Societe Generale convertible bonds, it is expected to be in the range of 13% – 18%, and the corresponding listing price is 105.8 yuan to 110.5 yuan.
As early as last month, when Societe Generale convertible bonds were issued, a number of securities companies gave valuation suggestions. Tianfeng Securities Co.Ltd(601162) according to the report, the scale of Societe Generale convertible bonds is large, the debt bottom protection is high, the parity is lower than the face value, the market may give a higher premium, and the listing price is expected to be about 113 yuan. Guoyuan Securities Company Limited(000728) it is estimated that the price on the first day of listing is 100.17-106.15 yuan and 103.16 yuan. Haitong Securities Company Limited(600837) believes that the listing price of Societe Generale convertible bonds corresponding to the positive stock price and debt bottom may be about 109-112 yuan.
