Stock abbreviation: Chinalin Securities Co.Ltd(002945) Stock Code: 002945 Chinalin Securities Co.Ltd(002945)
Chinalin Securities Co., Ltd.
(registered address: 5-5, unit 1, building 3, international headquarters city, Liuwu New District, Lhasa)
Prospectus for public issuance of corporate bonds (phase I) to professional investors in 2022
Amount of bonds issued: no more than RMB 1 billion (inclusive)
Guarantee: the bonds are unsecured
Credit rating results: the issuer's main rating is AA +, and the current bond rating is
AA+
Issuer: Chinalin Securities Co.Ltd(002945)
Lead underwriter / trustee: Citic Securities Company Limited(600030)
Credit rating agency: zhongchengxin international credit rating Co., Ltd
Lead underwriter / bond trustee
Signed on:
Statement
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 bonds shall be deemed to agree to the rights and obligations in the prospectus, including 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 issuer promises to perform its obligations and accept the supervision of investors in accordance with laws and regulations and the provisions of this prospectus.
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、 Issuance and listing of current bonds
On February 3, 2021, China Securities Regulatory Commission issued the reply on Approving the registration of Chinalin Securities Co.Ltd(002945) public issuance of corporate bonds to professional investors (zjxk [2021] No. 391) to approve the company's registration application for public issuance of corporate bonds with a total face value of no more than 4 billion yuan to professional investors. The corporate bonds are issued in installments. This issue is the first issue under the registration reply of CSRC license [2021] No. 391, and the issuance scale is no more than 1 billion yuan (including 1 billion yuan).
The current bond is rated AA +; Before the listing of the bonds, the total shareholders' equity in the consolidated statements of the company at the end of the latest period (September 30, 2021) was 6.264 billion yuan; Before the listing of the bonds, the net profits attributable to the shareholders of the parent company in the consolidated statements of 2018, 2019 and 2020 were RMB 345 million, RMB 442 million and RMB 812 million respectively, The average annual distributable profit realized in the last three fiscal years is RMB 533 million (the average net profit attributable to the shareholders of the parent company in the consolidated statements of 2018, 2019 and 2020), which is expected to be no less than 1.5 times the one-year interest of the current bonds. Please refer to the issuance announcement for the issuance and listing arrangements of the bonds.
2、 Trading circulation after listing
After the issuance of this issue, the company will submit an application for the listing and trading of this issue of bonds to Shenzhen Stock Exchange as soon as possible. The bonds meet the listing conditions for simultaneous trading in the centralized bidding system of Shenzhen Stock Exchange and the comprehensive agreement trading platform (hereinafter referred to as "bilateral listing"). However, before the listing of the bonds, the company's financial situation, operating performance, cash flow and credit rating may change significantly. The company cannot guarantee that the listing application for bilateral listing of the bonds can be approved by Shenzhen Stock Exchange. If the bonds cannot be listed bilaterally at that time, the investors have the right to choose to sell the bonds back to the company. The investment risk and liquidity risk caused by changes in the company's operation and income shall be borne by the bond investors themselves. The current bonds cannot be listed on other trading places except Shenzhen Stock Exchange.
3、 The current bonds do not meet the conditions of standard pledge repo
The main credit rating of the issuer is AA +, and the credit rating of the current bonds is AA +. According to the business guidelines for the qualification access standard of pledged repo and the value of discount coefficient of standard bonds (2017 Revision) issued by China Securities Depository and Clearing Co., Ltd. on April 7, 2017, the current bonds do not meet the basic conditions for pledged repo transactions.
4、 The bonds are only issued to institutional investors among professional investors
According to the securities law and other relevant provisions, the bonds are only issued to institutional investors among professional investors, and ordinary investors and individual investors among professional investors shall not participate in the issuance and subscription. After the bonds are listed, they will be subject to investor suitability management. Only institutional investors among professional investors will participate in the transaction, and the subscription or purchase of ordinary investors and individual investors among professional investors will be invalid.
5、 The bonds are unsecured
During the duration of the bonds, due to the influence of uncontrollable factors such as national policies and regulations, industry and market, if the issuer fails to obtain sufficient funds from the expected repayment sources on schedule, the scheduled repayment of the principal and interest of the bonds may be affected.
If the issuer fails to pay the principal and interest on time and in full, the bondholder cannot obtain repayment from a third party other than the issuer.
6、 Impact of interest rate fluctuation on current bonds
Affected by the overall operation of the national economy, national macro-economy, financial and monetary policies and changes in the international environment, the market interest rate is likely to fluctuate. As the current bond is a fixed interest rate bond with a long term, the investment value of the bond may change with the fluctuation of market interest rate during its duration, which makes the bond value held by the current bond investors uncertain.
7、 Risks of the company's main business affected by macroeconomic and market fluctuations
In the last three years and the first period, the issuer's net profits attributable to the shareholders of the parent company were 344672500 yuan, 441666600 yuan, 812496300 yuan and 480905300 yuan respectively. From January to September 2021, the issuer's net profit attributable to the shareholders of the parent company decreased significantly year-on-year, mainly due to the decline of the company's investment income from January to September 2021. Most of the issuer's income comes from the securities market. Factors such as market fluctuations and the instability of market trading volume may directly affect the issuer's business. At the same time, macroeconomic and monetary policies, laws and regulations affecting the financial and securities industries, inflation, exchange rate fluctuations, short-term and long-term available capital sources in the market, capital cost, interest rate level and fluctuation may affect the company's business. The deterioration of the overall economic environment or other risks generally related to the securities industry may reduce securities trading and financial activities, affect the value of relevant financial assets, and then have a significant adverse impact on the company's operating performance and financial condition. The company may also be exposed to credit risk related to the issuer of financial assets due to its holding of financial assets. The company's underwriting, investment, margin trading or other securities operations may cause the company to hold a large number of specific types of assets, and such capital investment makes the company face concentration risk.
Facing the fierce competition in China's securities industry, the company's business may be materially and adversely affected due to the failure to compete effectively. With the deepening of industry innovation, in order to improve its competitive position in the industry, the company has been committed to providing customers with new products and services. However, innovative business will also lead to increased risk. Business innovation promotes the company to deal with a wider customer base or counterparties, and promotes the company to enter new market areas and provide new products, which makes the company face new risks. The company may be subject to more regulatory review or bear greater market risk, credit risk and operational risk.
8、 Risk of changes in the fair value of the company's assets
As of September 30, 2021, the total balance of trading financial assets and other debt investment in the consolidated financial statements of the company was 9086.4663 million yuan, accounting for 37.31% of the total assets. The investment scale of trading financial assets and other debt investments has a great impact on the company's profits and losses or net assets. If the fair value of the above assets changes significantly in the future, it will have a great impact on the company's total assets and profitability. In addition, as of September 30, 2020, the fair value of bill investment in other debt investments of the company was 10887.9982 million yuan, accounting for 35.86% of the total assets, which was mainly due to the company's increasing the scale of bill business according to the decline of interest rate in the bill market since 2020. As of September 30, 2021, the fair value of bill investment in other debt investments of the company was 773352100 yuan, accounting for 3.18% of the total assets, which has decreased to a low level, mainly due to the reduction of bill business scale of the company. In February 2019, the company received the notice on Chinalin Securities Co.Ltd(002945) access to China's bill trading system from Shanghai Stock Exchange (sjxh [2019] No. 53), and the development of the company's bill business has been reported to Tibet securities regulatory bureau. The company is qualified to directly carry out bill business, but if the fair value of the company's bills changes significantly in the future, It will have an impact on the total assets and net assets of the company.
9、 Risk of large scale interest bearing debt
As of September 30, 2021, the issuer's interest bearing liabilities amounted to 7210.9002 million yuan. It mainly includes the sale and repurchase of financial assets, short-term financing payables and borrowing funds. During the reporting period, the issuer's interest bearing debt showed a rapid upward trend. With the expansion of the issuer's business scale, its debt scale also increases, and the scale of interest bearing debt increases accordingly. The issuer is facing the risk of expanding the scale of interest bearing debt.
10、 Risk of declining solvency
On December 31, 2018, December 31, 2019, December 31, 2020 and September 30, 2021, the asset liability ratios of the issuer according to the consolidated criteria were 49.99%, 50.19%, 65.99% and 60.63% respectively, and the asset liability ratios of the parent company were 49.49%, 57.12%, 66.21% and 61.54%. In the last three years and one period, the issuer's EBITDA interest multiples were 3.35 times, 5.67 times, 4.22 times and 2.62 times respectively. During the reporting period, the issuer's asset liability ratio increased rapidly. With the development of the issuer's business in the future, the debt scale is likely to continue to increase, which will have an adverse impact on the repayment of the current bonds.
11、 Risk of large scale of restricted assets
As of September 30, 2021, the issuer's restricted assets totaled 5887.9573 million yuan, accounting for 94.00% of the owner's equity attributable to the parent company at the end of September 2021, mainly bonds or notes pledged or transferred for the issuer's sale repurchase business and bond lending business, The insufficient liquidity brought by a large amount of mortgage and pledge assets will cause certain financial risks to the issuer.
12、 Risk of fluctuation of net cash flow from operating activities
From January to September in 2018, 2019, 2020 and 2021, the issuer's net cash flow from operating activities was 63.4928 million yuan, 190.11109 million yuan, 10773.7844 million yuan and -2771.5704 million yuan respectively. In 2019, the net cash flow generated by the company's operating activities was 190.11109 million yuan, an increase of 1837.6181 million yuan compared with 2018, mainly due to the year-on-year increase in net cash received from agency trading of securities and the year-on-year decrease in net increase in borrowing funds and net decrease in lending funds. In 2020, the net cash flow generated by the company's operating activities was 10773.7844 million yuan, an increase of 8872.6735 million yuan compared with 2019, mainly because the company increased the investment scale of fixed income products, increased the scale of repurchase financing, and reduced the increment of financial assets held by the company for trading purposes. From January to September 2021, the net cash flow from the company's operating activities was -2771.5704 million yuan, a decrease of 3365.1116 million yuan compared with the same period last year, mainly because the company took the initiative to reduce the investment scale of fixed income products and the business scale of repurchase financing compared with the same period last year.
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