Key investment points:
On January 20, 2023, Cinda Securities announced the results of the IPO, and the company issued 324.3 million A-shares, accounting for 11.11% of the total capital stock of 2.9187 billion shares before the issue, and 10.00% of the total capital stock of 3.243 billion shares after the issue. The issuing price is 8.25 yuan/share. The issuer and the sponsor (joint lead underwriter) are CSCI Securities, and the joint lead underwriter is Zhongtai Securities.
Earnings per share of Cinda Securities after issuance is 0.36 yuan; The net asset per share before the issuance was 4.44 yuan, and the net asset per share after the issuance was 4.82 yuan. The issue price is 8.25 yuan/share, corresponding to the issue price earnings ratio of 22.97 times and the issue price to book ratio of 1.71 times.
After the issuance, China Cinda's shareholding in Cinda Securities will decrease from 87.42% to 78.67%. Among other shareholders, Zhongtai Venture Capital (holding 4.32% after the issuance) is a wholly-owned subsidiary of Zhongtai Securities, the co lead underwriter of Cinda Securities this IPO, and a new investor in March 2020.
Born in the stage of comprehensive governance of the securities industry
Cinda Securities is the first domestic AMC securities company established in September 2007. China Cinda, as the main sponsor, is a securities company established on the basis of inheriting the investment banking business of China Cinda and acquiring the securities assets of Liaoning Securities and Hantang Securities, in cooperation with CNOOC Trust and China Sinoma Group.
In 2021, Cinda Securities will achieve an operating revenue of 3.803 billion yuan and a net profit attributable to the parent company of 1.172 billion yuan; At the end of 2021, the net assets were 12.446 billion yuan, the total assets were 64.661 billion yuan, and the leverage ratio was 5.20 times; The weighted ROE was 9.89%. According to the operating segment, the revenue structure in 2021 will contribute 44% to brokerage business, 12% to investment banking, 9% to asset management, 6% to proprietary business, 5% to futures, 5% to overseas business, and 19% to other businesses (including trade wind investment, Cinda innovation, Cinda Australia and Asia and its subsidiaries).
Extraordinary shareholder qualification and rich featured business
China Cinda, the controlling shareholder of Cinda Securities, is the first financial asset management company in China. It has platform subsidiaries engaged in financial services, real estate and other businesses, including Nanyang Commercial Bank, Jingu Trust, Cinda Financial Leasing, Cinda Hong Kong, Cinda Investment, and China Resources Development, and holds tens of billions of yuan of debt to equity swaps in key enterprises in coal, chemical and other industries.
As an important platform for China Cinda's financial sector, Cinda Securities is expected to become a key link for China Cinda to coordinate the financial industry within the group and connect the domestic capital market. In 2007, Xinda Securities ushered in the highlight moment when it was born, and became the lead underwriter of CCB's A-share IPO. In the process of disposing non-performing assets, participating in enterprise mergers and acquisitions, and providing comprehensive financial services, China Cinda Group will derive a large number of financial advisory, asset securitization, debt restructuring and debt equity swap projects, which will become the business source of Cinda Securities' characteristic development.
Profit forecast
In the first half of 2022 and the first three quarters of 2022, Cinda Securities recorded a positive year-on-year growth in gross operating income and net profit, which is rare in the environment of sharp fluctuations in the capital market. Considering that the optimization of epidemic prevention and control continues to advance, the economy is expected to be repaired in 2023. Cinda Securities will continue to benefit from the business collaboration within the Group and the opening of financing channels after listing, and is expected to achieve rapid growth in revenue and profits.
We expect that the company will achieve total operating revenue of 3.669 billion yuan, 4.562 billion yuan and 4.830 billion yuan respectively from 2022 to 2024, with year-on-year growth of - 3.52%, 24.33% and 5.89% respectively; From 2022 to 2024, the net profit attributable to the parent company will be 1.084 billion yuan, 1.503 billion yuan and 1.546 billion yuan, with year-on-year growth of - 7.51%, 38.67% and 2.82% respectively; From 2022 to 2024, EPS will be 0.33 yuan, 0.46 yuan and 0.48 yuan per share (calculated according to the issued share capital) respectively, and PE corresponding to the issue price of 8.25 yuan will be 24.68X, 17.80X and 17.31X respectively.
Risk warning
The risk that the company's listing process does not meet expectations; Compliance and risk control risks during the company's business expansion; The risk that the service rate or commission rate of the company and the securities industry will decline more than expected; In the future, attention should be paid to the lifting of the ban and the reduction of shareholders' holdings.
The company's performance is strongly related to the capital market, and the impact of capital market fluctuations on its profitability; The risk of economic recovery not meeting expectations after the optimization of epidemic prevention and control; The process of domestic liquidity easing was not as expected; The risk of decline in A-share trading activity.
The risk of significant fluctuations in the RMB/US dollar exchange rate, significant changes in the US China interest margin and liquidity impact, and the risk of interest rate fluctuations beyond expectations.
