Agricultural Bank A Shares Raised Or Reduced To 50 Billion

Agricultural Bank of China IPO is scheduled to take part in the promotion agency on Wednesday, saying it can barely accept 1.6 times PB.

The SFC announced that it will examine the first application of Agricultural Bank on Wednesday (June 9th).

The Morning Post reporter learned from the stakeholders involved in the IPO of the Agricultural Bank of China that the "bottom line" of the Agricultural Bank IPO acceptable to the market at present is 1.6 times PB (market rate, price per share / net asset per share).

Market participants rough estimate, the Agricultural Bank raised about 110 billion yuan, of which, A shares are expected to raise more than 50 billion yuan.

Agencies or reluctantly accepted 1.6 times PB

The listing of ABC is a "national strategy", and there is little suspense in the third quarter listing.

The China Securities Regulatory Commission announced on Friday night that the SFC will convene the eighty-ninth working conference in 2010 next Wednesday (June 9th) to examine the first application of the Agricultural Bank of China Limited by Share Ltd (ABC).

H shares issue hearing is also expected to synchronize this week.

Although fund managers say they are not optimistic about the banking sector, they are also worried about the growth of the Agricultural Bank.

However, the public funds raised by the new fund of the Agricultural Bank of China will not be ignored in the face of the "national strategy". Fund managers have begun to tell the Morning Post reporter that if the price is reasonable, they will participate in the subscription.

A fund manager who participated in IPO of the agricultural bank told the Morning Post reporter that 1.6 times PB was the "bottom line" acceptable to ABC, although some organizations hoped that the PB issued by the Agricultural Bank was 1.3 times, but "this is not realistic". "Now the basic acceptable price is 1.6 times PB."

A share financing or more than 50 billion yuan

According to the financial report, ABC's net assets in 2009 were 342 billion 819 million yuan.

And its prospectus shows that if the two places are successfully released, the total share of ABC will increase from 270 billion shares to 317 billion 647 million shares.

Based on this calculation, ABC's net assets per share before the issue were 1.27 yuan / share.

According to market participants, if the Agricultural Bank of China started offering 1.8 times PB before the issue, its IPO price was 2.3 yuan / share.

The total share capital of the green shoe mechanism is not calculated. The Agricultural Bank of China has raised 47 billion 650 million shares of A and H shares, and the A share raising amount is about 51 billion yuan.

Assuming that A and H-share are the same price (that is, Hong Kong Agricultural Bank's HK $2.6 / share), ABC raised about 109 billion 600 million yuan this time.

After deducting the issuance cost (the general rate is 2.5%), after the issuance of A and H shares, the net assets of ABC increased to 449 billion 700 million yuan, and the net assets per share after the issuance were 1.416 yuan / share, and its PB was about 1.6 times.

An agricultural bank IPO official told the Morning Post reporter that ABC's distribution was very sensitive, and it signed a confidentiality agreement with the Agricultural Bank of China. It is not convenient for ABC to explain whether it is issued before PB or after the issuance of PB. Generally speaking, there are two ways.

Or missed the world's largest IPO

A fund company investment deputy general told the Morning Post reporter, for the issue of new shares, domestic investors usually also need to see PE (P / E ratio, or price per share / earnings per share).

According to the prospectus of Agricultural Bank of China, it is expected to achieve net profit of 82 billion 910 million yuan this year.

If the issue price of 2.3 yuan / share is calculated, the diluted earnings per share of ABC after this issue are about 0.26 yuan / share, the dynamic PE of the stock market is 8.85 times this year.

By the end of last Friday, A PB of ICBC (601398), Construction Bank (601939) and Bank of China (601988) were 2.13, 1.9 and 1.82 times respectively, and their dynamic PE in 2010 were 9.18 times, 8.68 times and 9.58 times respectively.

After the financing scale is "thin", ABC has lost the world's largest IPO crown.

Even with the 54 billion 800 million shares calculated after the super match, according to the calculation of 2.3 yuan / share, the IPO scale of Agricultural Bank of China will reach 126 billion yuan (about 18 billion 500 million US dollars), far less than the 21 billion 900 million largest IPO record ever recorded by ICBC.

Nevertheless, fund managers are worried that the IPO will bring heavy pressure on A shares.