Huacan Optoelectronics significantly declines LED brokerage fear

Wang Dongming, chairman of CITIC Securities, said that underwriting 50 million in Dongwu Securities

The regulatory new policy launched by Guo Shuqing since last year has engulfed the IPO market. Many intermediary agencies and practitioners have “gunshot” a large area. Regardless of the aggressive investment banks or the stable and stable old brokerage companies, the securities companies have been undercut by the China Securities Regulatory Commission due to underperformance of underwriting companies. The penalties, even the well-established CITIC Securities, have become a negative example of a rare two-time penalties. This time, the financial inspections made it possible for the investment banks that have weathered the IPO to lay off their staff and lighten up on the one hand, and to find new ways on the other. Officials of the Securities Regulatory Commission stated that Chinese companies are facing a turning point in a wave of mergers and acquisitions. Many brokerage firms also predict that mergers and acquisitions will be an important direction for future investment banking sector restructuring.

Penalty or concealment by the sponsor

With the increase in the number of listed small projects, CITIC Securities has been transforming itself in the past two years as an aircraft carrier-class broker in the securities industry, changing its traditional reliance on large projects. From the perspective of last year, CITIC has made significant contributions. According to the same flush data, in 2012, CITIC Securities operated a total of 156 lead underwriting projects (including initial issues, issuances, share allotments, convertible bonds, and bond issuances) with a market share of 10.42%, far ahead of Guotai Junan Guosen Securities (5.87%), with a total underwriting amount of 243.957 billion yuan, and a market share of 13.13%, far ahead of the second-ranked CICC (9.12%), the revenue of the lead underwriter, CITIC Securities' 2012 revenue 811 million yuan, second only to the 1.024 billion yuan of Guosen Securities.

At the same time, CITIC Securities has repeatedly hit the red line.

On January 10, the China Securities Regulatory Commission announced that due to the significant decline in profits after the listing of Soochow Securities and the violation of relevant regulations on information disclosure, the sponsor of the project, CITIC Securities and its sponsor representatives adopted regulatory measures.

Just one month after listing, Soochow Securities issued an announcement saying that after preliminary calculations, the net profit attributable to the parent company in 2011 decreased by 50%-60% compared with the same period of last year. The net profit of Soochow Securities in 2010 and the first half of 2011 were 581 million yuan and 227 million yuan respectively. The company's annual report shows that the annual net profit was only 232 million yuan, a sharp drop of 59.79% year-on-year, and net profit was only 5 million yuan in the second half of 2011.

"There was such a sharp decline in profits on the eve of the listing. CITIC Securities, which is the issuer's Dongwu Securities and sponsors, could not be unaware of the situation." A securities industry researcher in southern China analyzed that it is likely that the sponsor concealed the relevant information.

After investigating by the Securities Regulatory Commission, Soochow Securities published the prospectus on December 9, 2011. Prior to this, the performance has dropped significantly. The issuer and sponsor did not truthfully explain the situation in the post-meeting commitment letter, and the issuer did not A corresponding supplementary announcement will be made during the IPO process. In addition, the operating profit of Dongwu Securities in the public offering of the Main Board fell more than 50% from the previous year. Therefore, according to the relevant regulations, the China Securities Regulatory Commission adopted the supervisory measures for the issuer Dongwu Securities and the sponsor CITIC Securities to issue warning letters, and took nine months of inadmissibility against the administrative licenses of the sponsor representatives of Xianghui Securities Shao Xianghui and Zhou Jiwei. Document supervision measures.

The chairman of China CITIC Securities, Mr. Wang Dong (microblogging), stated on the 11th that the innovation and integration of Tsinghua Wudaokou Financial EMBA financier forum on the 11th said that the disposition made CITIC Securities “have to pay more investors to protect funds, this time warning the company about It is necessary to pay an investor protection fund of 50 million yuan.” Wang Dongming said that this warning will affect the rating of securities companies by the Securities Regulatory Commission at the end of the year and will bring reputation losses to the company.

CITIC Securities has three slips

This is the second time that CITIC Securities has been penalized for the second time because of sponsored new share performance. It had previously been issued a bill by the Securities Regulatory Commission because of Blum's performance in the East. In addition to Bank of Orient and Dongwu Securities, CITIC Securities served as a sponsor. The new shares Huacan Optoelectronics has also turned its performance in the third quarter of last year.

CITIC Securities sponsored the listing of the Blum Eastern debut and the sponsored Soochow Securities are exactly the same. The net profit of Blum East 2009-2011 were 503 million yuan, 930 million yuan and 951 million yuan respectively. However, the semi-annual report disclosed on the market for only two months revealed that the company’s net profit for the first half of 2012 was 205 million yuan, a sharp drop of 72.0 5% year-on-year. Blum Oriental stated that cotton prices began to decline sharply in the second quarter of 2011, which was the main reason for the company's decline in its first-half performance. Blum Oriental was listed on April last year and it was already in the second quarter. CITIC Securities could not have known the price trend of cotton at that time. It was obviously deliberately concealing this important information.

In addition, the first three quarters of Huacan photoelectric sponsored by CITIC Securities net profit was only 42.09 million yuan, a sharp drop of 49.10% year-on-year, and its third-quarter net profit was only 5 million yuan, a sharp drop of 76.73% year-on-year. As of the close of January 16, Huacan Solar received at RMB 12.16 per share, which has fallen by RMB 7.84 compared with its issue price of RMB 20/share.

Downgrade rating has a huge negative impact

It is worth noting that, since last year, the strong investment bank securities companies, whether it is the wolf culture of Guosen Securities, Ping An Securities, China Merchants Securities, or the strength of Hai Tong Securities, CITIC Securities, or rising star of the people's livelihood securities, have Baoxing Securities Commission Penalties, and more and more penalties for sponsors. On January 8, the vice chairman of the China Securities Regulatory Commission, Yao Gang, made it clear that the sponsors that received the warning letter would increase the payment of their insured funds, as well as their new business qualifications. According to the securities industry researcher mentioned above, rating directly affects the application of securities companies to increase business types, establish new business outlets, and pilot new products and new products.

In 2012, there was a precedent for Ping An Securities to fall from “AA level” to “A level”, and the Shengjing Shanhe incident also directly led to the departure of Xue Rongnian, the president of Ping An Securities. Afterwards, the investment banking department of the Ping An Insurance Company was seriously injured. Xue Rongnian used 11 years to lay down a large number of industries for Ping An in the industry and created an investment bank team with the highest productivity and efficiency in the industry. It is called the “Safe Mode” and corresponds to the “Guoxin Model” and the “CITIC Model”. Although CITIC Securities has not yet experienced a large-scale flow of core personnel in the investment banking sector, it cannot be taken lightly to learn from the past.

Why is CITIC Securities, known for its standardized operations, frequently seen as a negative model? According to the above-mentioned analysis, the specific reasons are not clear, but to a certain extent, the proliferation of non-compliance is underlined. At the same time, with the downturn in the primary market, sponsorship projects are becoming more and more difficult, and the cost of investment banks is also increasing. The days of Baodai are not easy.

At the end of last year, CITIC Securities has started layoffs, and the proportion of layoffs to the investment banking department will be between 5% and 10%. For employees who are resigned, CITIC Securities will pay N months (according to the number of years of work, one-month-one-month supplement) according to the number of years of service. And reissue "Loyalty Bonus" compensation. The list of layoffs is mainly based on performance assessments and the last one is eliminated.

The investment banking department of Essence Securities, which has been insisting on no layoffs, has also begun the first layoffs and pay cuts in history. This is also the first time since the establishment of 2006, the company has cut its salary and layoffs. According to people familiar with the matter, in 2012, Anxin's investment banking department was losing money. At the same time, the investment bank of Anxin Securities is phasing out the last 5% according to the year-end assessment, and the other 10% will be reduced.

Merger, reorganization or major business

At the same time as layoffs and pay cuts, many brokerage investment banking departments have set up another battlefield.

Xie Jijun, general manager of China Merchants Securities Investment Banking Division, said that China Merchants Securities actively adjusted its strategy and vigorously developed bond and M&A business. In addition, Nandu reporters also learned that Guangzhou Securities has made a bond market since last year. According to the introduction of Ni Xiaowu, general manager of the company’s innovation and financing headquarters, the new three board business will introduce relevant institutional changes such as market makers and lifelong sponsors. Restructuring, counseling, sponsoring, mergers and acquisitions, restructuring, refinancing, etc. will bring continuous income to brokers.

In the near future, two companies that have already folded their IPOs have become targets of mergers and acquisitions by listed companies. On January 12th, Chengfei Integrated Assets, which was proposed to be injected into the reorganization program, had been unsuccessful in its bid to seek IPO operations. In September 2009, it was dismantled by the GEM Approval Committee. In the assets reorganization plan that * ST Beisheng released in December last year, the Deloitte group that is also folded in the small and medium-sized board IPO will be injected into the company as a backdoor. In addition, the Ji'an Group, which has received guidance on the listing of Hualin Securities, has finally abandoned the IPO force and has instead gone public through the detour of Shanying Paper.

“There are more than 2,000 listed companies in China, and there are more than 800 in the queue, but there are still 10% to 20% of companies in the market actually face the opportunity of restructuring and integration.” Wang Ping, chairman of the China M&A union, said that the merger and acquisition trade unions This will be promoted.

Ouyang Zehua, director of the Regulatory Department of the China Securities Regulatory Commission, also stated that China is facing a turning point in a wave of mergers and acquisitions. Both social hot money and IPO queuing companies are seeking M & A opportunities. Enterprises that fail to meet IPO standards can also choose to be merged.

He said that a large number of social capital and industrial capital are looking for new investment projects, and mergers and acquisitions are the best choice for them. A group of companies that do not meet the IPO standards can also choose to be acquired, which is also the way to achieve asset securitization.