Bank Of China International Customs Clearance Commission: Former Investment Bankers Take Advantage Of The Breakthrough

Another brokerage stock came to the front of the IPO examination room.

In twenty-first Century, economic news reporters learned from the securities and Futures Commission that 6 companies including BOC International will formally meet in November 28th.

A number of investment bank analysts said that as a licensed broker, the Bank of China International IPO would have better communication with regulators on the eve of the bank, so its smooth passing would still be a big probability event, which means that the Bank of China is expected to follow another new brokerage firm such as Warren, Hongta and other brokerages.

Reporters found that although the Bank of China generally recognized as the Bank of China's institutions, and the Bank of China shared brand and CI logo, but in the Bank of China's prospectus declaration, it is described as "no controlling shareholders and actual controller" situation, and its IPO independence has undoubtedly become one of the concerns of the market.

Some analysts believe that as a former "investment bank aristocrat", BOC is also required to initiate transformation in other business areas. Therefore, it is not ruled out that after its listing, it will further realize its subsequent development through mergers and integration.

IPO will be there soon.

From the industry perspective, the performance of BOC has been relatively stable in recent years.

Prospectus data show that from 2016 to the first half of 2019, BOC's operating income was 2 billion 830 million yuan, 3 billion 68 million yuan, 2 billion 755 million yuan and 1 billion 507 million yuan respectively, while the net profit for the same period was 1 billion 66 million yuan, 1 billion 69 million yuan, 706 million yuan and 504 million yuan respectively.

In terms of ownership structure, shareholders holding more than 5% shares are BOC International Holdings, PetroChina capital, Shanghai financial development investment fund, Yunnan investment holding company and Jiangxi copper industry. Among them, the shareholding ratio of Bank of China International Holdings is 37.14%, while Bank of China International Holdings Limited is a wholly owned subsidiary of Bank of China.

According to the prospectus of the prospectus, BOC International has no actual control status. According to the company law, the controlling shareholder of a company is a shareholder holding more than 50% of the share capital, or less than 50% of the shareholders who still have a significant impact on the shares held by them.

"Bank of China International has been regarded as the Bank of China's institutions, Bank of China, Bank of China itself has some internal personnel appointments in the history of the transfer." A bank close to BOC International said, "but in nominal terms, Bank of China can also satisfy the identification of no controlling shareholders and actual controllers, because the proportion of Bank of China Holdings is less than 40%, and if it can be proved that the company's governance process is not entirely determined by BOC holdings, it can also be identified as a non controlling shareholder and a controlling shareholder."

But in terms of specific business ties, Bank of China is still unable to pick up relations with the Bank of China. For example, in the Bank of China's assets management business income, the fees and commission income from Bank of China accounted for 70% to 80%.

In this regard, the SFC also requested the Bank of China to explain the related transactions with the Bank of China in this area, indicating the reasonableness of the transaction, the fairness of the pricing and whether the main business of the company depends on the Bank of China, whether it affects the independence of the company's business and so on.

In addition, the situation of Bank of China Leasing and related party property and the use of Bank of China related trademarks have also been asked by the SFC to disclose whether the related transactions have an impact on the independence and integrity of Bank of China.

"The brand of BOC has been shared to some extent by the Bank of China. In this process, the market is bound to question the independence." A bank insider close to BOC said frankly.

But in its view, the meeting of BOC International is still a big probability event.

"These licensed banks and brokerages often have sufficient communication and demonstration with the regulatory authorities before they declare IPO, so it is often not a big problem to declare normally," he said. The investment bankers said, "the success of BOC is still a big probability event."

Directions for expansion

In the eyes of many people in the industry, with the normalization of IPO trial and the listing of potential large-scale projects, the market space of BOC as an old investment bank has been affected to a certain extent.

"BOC is famous for its large projects like central enterprises and banks, but many big projects have been listed, and the advantage of BOC has quickly become pointless."

BOC has been involved in big projects or star projects. For example, in recent years, BOC has participated as a joint underwriter in star companies such as 688009.SH, 600919.SH and MINDRAY medical care (300760.SZ) in Jiangsu.

Since the establishment of the Bank of China, more than 5 billion yuan projects have been involved, of which more than 11 are over 5 projects, including 601390.SH, 601166.SH, 601669.SH, 601106.SH and China.

But judging from the absolute number of projects, the Bank of China gradually lagged behind CICC, CITIC and construction investment companies, which are stronger than investment banks.

Take the IPO project as an example, the Bank of China's investment banking projects in recent years are indeed decreasing. According to Wind statistics, in the past 5 years (November 26, 2014 to November 25, 2019), there were only 12 projects in the Bank of China, and only 8 of them were independently underwritten.

Correspondingly, today's Bank of China's revenue structure is more like a traditional broker. According to its 2018 annual report, its securities business accounts for 48.43% of its revenue, accounting for 31.46% of its revenue, and only 6.97% of its investment banking business.

"One of the possible breakthroughs of BOC is international business, such as introducing outstanding overseas institutional investors to the domestic market." "The progress of capital market introduction and going out is speeding up now, and on the basis of the Bank of China's Bank of China, the Bank of China may have greater resource endowments in international business," said an analyst at a non banking brokerage firm in Beijing, a medium-sized broker.

Some analysts believe that after the completion of the listing of BOC, it is possible to carry out industry integration through the listing platform, so as to make up for its shortcomings in other business areas.

"The Bank of China's" people set up "is actually an investment banking business in the early years. This is similar to CICC, but CICC has made some deficiencies in its complement through the acquisition of CIC securities and the integration into CICC fortune, but at present, it has not seen any corresponding measures in BOC. The brokers' non bank analysts pointed out that "of course, we do not rule out the new integration of the Bank of China after the listing, through supplementary capital capabilities and other actions."

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