ABC A+H Strives For The 7 Moon Phase, Three Major Suspense To Be Solved

"ABC seeks to land A shares and H-shares in July this year, and the Agricultural Bank and the entire underwriting team have reached a consensus on this point. The proportion of A shares and H-share allocation is currently tentatively scheduled for half, and the callback mechanism will be adopted."

In May 25th, a layman who participated in the Agricultural Bank's H-share underwriting disclosed to our reporter.

In the view of this person, whether or not we wish to carry out A%2BH share IPO in July, one of the key issues is the approval process of the SFC.

"The examination and approval time of the Hongkong stock exchange is more flexible, and H-shares can cooperate with the IPO process of the A shares."

As the closing battle of the four major state-owned banks, the IPO of ABC has attracted much attention both at home and abroad.

In addition to the speculation in the market, the pricing of IPO and the distribution of the interests of its large underwriting group are the focus of the IPO.

Early June or taking A shares approval

"ABC has submitted IPO application materials to the SFC for a period of time. According to the normal progress, it is indeed the time of the first trial meeting and the trial meeting of the Agricultural Bank of China. Due to confidentiality provisions, the investment bank can not disclose any more specific timeline."

ABC A share underwriter insiders told our reporter.

However, the person pointed out that: according to the relevant provisions of the SFC, the listed companies are required to disclose their prospectus draft in advance five days before the issuance of the panel, and ABC is no exception.

As of this reporter's press release, the official website of the SFC did not disclose the advance disclosure of the prospectus.

The outsiders predict: "if all goes well, ABC is most likely to get the IPO approval of A shares in early June, and for the current known progress, the rest of May is too urgent."

The procedures for A IPO of Agricultural Bank of China include the approval of the trial committee and the trial committee, before obtaining the approved approval issued by the SFC.

"Normally, a listed company will issue a trial meeting within 1-2 weeks after the first hearing. The ABC belongs to a special project. Regulators should shorten the interval as much as possible."

The insiders said.

An outsider China executive told us: "in view of the special background of ABC, investors are not worried about whether their IPO applications can be approved, or even underwriting groups need not worry about underwriting matters."

"To measure the success of Agricultural Bank IPO, we should regard the final pricing of A shares and H shares as one of the four major state-owned banks, and I have no doubt that the shares will sell smoothly."

The executive said bluntly.

Pricing Reference Industry Bank or inventory variables

At present, market participants generally expect that the total financing of ABC will be around 30 billion US dollars.

According to a number of people from the Agricultural Bank's underwriting syndicate, there is no final conclusion on the geometric nature of the price per share.

On the afternoon of May 25th, Liu Guangyao, managing director of Galaxy Securities Investment Bank, told the newspaper by telephone: "pricing will be the result of market inquiry, not the Agricultural Bank and our underwriter can decide."

On the same day, Xie Jijun, managing director of China Merchants Securities (600999) investment banking division, also told our reporter: "the four major state-owned banks have their own characteristics, and the stock price will definitely refer to each other."

Xie Jijun acknowledged that the bank's net value in Shanghai and Shenzhen two cities should be cautious in the second half of the year.

But he also pointed out: "this single Agricultural Bank IPO has a large scale of financing, and it will inevitably involve more investors and more broadly involved in the subscription of new shares, and there will be optimistic opportunities on pricing."

According to the insiders, "at present, the views of the parties concerned are based on ICBC's share price."

"In the Hongkong roadshow, the company carried out initial communication with investors on the basis of 2 times PB."

The outsider said, "it needs to be emphasized that price is not a single investment bank or company can decide independently, only the market can have the final say."

Public information shows that ABC's new credit in the first quarter of 2009 and 2010 was 1 trillion and 30 billion yuan and 301 billion 400 million yuan respectively.

At the end of 2009, its capital adequacy ratio was 10.07%, lower than that of the CBRC 11.5%.

Industry analysis, while its capital pressure is huge, it is accompanied by investors' doubts about their profits and risks.

Because of the main financial business of ICBC, the profitability index (ROE) of ABC is lower than that of ICBC.

The IPO's listing in Hong Kong stock market is in full swing in 2006, and the big challenge for AgBank's listing in the second half is the low overall valuation of the banking sector.

Wu Yonggang, a bank analyst at Guotai Junan, reckon that the dynamic market value (PB) of the A share banking sector is 1.8 times, and the lowest level of bank sector valuation in 2006 has dropped to 1.5 times PB in 2008.

"If the temporary policy factors are eliminated, the PB level of the Chinese banks will normally be within 2.3-2.5 times in the future."

He said.

Underwriting rates have not yet been finalized.

ABC's luxury underwriting group includes four major A share underwriters, such as CICC, CITIC Securities (600030), Galaxy Securities, Guotai Junan Securities, and seven H-share underwriters such as Goldman Sachs and Morgan Stanley.

Among them, CICC has become the only "a + H" double underwriter list.

UBS and China Merchants Securities (600999) respectively served as financial advisers of ABC H-share and A shares.

"Before, the listing of Chinese banks and even other overseas listing of central enterprises has not seen so many investment banks participating in the same single IPO."

The above executives said.

How the internal workload is allocated and how the work direction is coordinated is enough for the underwriters to have a headache.

At present, how many underwriting fees and consultancy fees can be allocated to more than ten domestic and foreign investment banks for the sole purpose of IPO is still unknown.

The underwriting group of A and H shares confirmed to our reporter: "the underwriting rates of the two places have not yet been determined, and the service charges of the financial advisers have not yet been specified."

Previously, the Hong Kong stock underwriting rates of ICBC, China Construction Bank, Bank of China and other Chinese banks were all around 2.5%, and the A share underwriting rates were quite different.

"How much service fee each investment bank ultimately receives is mainly determined by the ABC, and its business ability and work experience have been considered in draft selection."

The above executives believe that.

But the luxury underwriting group has added another secret to the IPO of the Agricultural Bank.

Inspector general of a fund company in Beijing pointed out to our reporter: "according to the provisions of the fund law, the fund property shall not be used to sell securities issued by a company that has a controlling relationship with its fund manager or fund custodian or with other major interests related to its fund manager or fund custodian or securities underwritten during the underwriting period.

The paction items directly related to the controlling shareholder of the fund company must be circumvented.

Therefore, taking the CITIC Securities (600030) wholly-owned Huaxia Fund as an example, it can not participate in the new A.