AMC Is Listed By Securities Companies, And Cinda Securities Targets "Alternative Investment Banks"

The third AMC is a listed securities company. Recently, Cinda securities disclosed the draft of the prospectus on the official website of the CSRC. The IPO of the company intends to issue no more than 972.9 million shares, accounting for no more than 25% of the total share capital of the company after the IPO. According to Cinda securities, the funds raised in this listing will be used in seven major directions, including brokerage business, capital intermediary business, proprietary business, asset management business, investment banking business, compliance and it construction, and the development of subsidiaries.

At the same time, the prospectus also disclosed the latest performance data of Cinda securities.

According to the data, from January to June of 2020, the company will achieve an operating revenue of 1.571 billion yuan and a net profit of 401 million yuan. From the perspective of financial data alone, the net profit of Cinda securities in the first half of 2020 has exceeded twice that of its full year net profit in 2019.

As one of the four largest asset management companies in China, Cinda securities also revealed its strategic goal of building an alternative investment bank in its prospectus.

IPO "zero breakthrough"

A close look at the financial data of Cinda securities shows that the company has achieved an operating revenue of 2.223 billion yuan in 2019. By simply calculating the data of the first half of 2019, we can find that the revenue of Xinda securities in the first half of 2020 is 1.571 billion yuan, with a year-on-year growth rate of 41%. This data is still normal under the background of the overall improvement of the capital market and the bumper harvest of the securities industry in 2020.

However, focusing on the net profit data, Cinda securities achieved a total net profit of 186 million yuan in 2019. After rough calculation, it can be found that the company's net profit in the first half of 2020 increased by 330% year-on-year.

"In terms of revenue, the cost control of Cinda securities was much better last year." Some people close to Cinda Securities said.

Although according to the prospectus, the operating expenses of Cinda securities in the first half of 2020 will still be 1.135 billion yuan. However, this person pointed out to the reporter of 21st century economic report that Sinda securities has been trying to reduce the cost and increase efficiency since it was planned to be listed, and the growth rate of cost is far less than that of performance. (in 2020) the rent will be saved a lot. The company will lease some unused office space and reduce the area of business department. "

From the information disclosed in the prospectus, Cinda securities is also slightly withdrawing the business department. As of June 30, 2020, Cinda securities has a total of 95 securities business departments, of which 4 are under cancellation. By the end of 2020 when the prospectus is signed, the number of business departments of the company will be reduced to 88.

However, the company's revenue, Cinda securities business has a certain differentiation.

In the first half of 2020, the company achieved a total of 724 million yuan of securities brokerage business income and 107 million yuan of overseas business income, both at the same level as in 2019. Compared with the same period, the revenue of futures business and asset management business decreased by 20% and 30% respectively.

However, under the influence of the favorable secondary market in 2020 and the IPO opportunities brought about by the registration system, Cinda securities proprietary business and investment banking business have achieved good results, and the revenue in the first half of 2020 exceeded the data of the whole year in 2019.

According to wind statistics, from January to June 2020, the investment banking department of Cinda securities completed two IPO projects of auteway and Shunyou, with a total underwriting scale of 1.502 billion yuan, and the rest of the refinancing equity projects have no more gains. In addition, the current total underwriting scale of corporate bonds is 57.112 billion yuan, and ABS accounts for 30 billion yuan.

"Equity business has always been the weakness of Cinda securities. The two IPO projects in 2020 have been breakthrough achievements, and the previous IPO business was zero." There are securities dealers in Beijing said.

According to the statistics of the Securities Industry Association, in the first half of 2020, Cinda securities investment banking business income ranked 25th in the industry, up 24 places compared with that in 2019.

But people close to Cinda securities investment banking business said that the relatively excellent performance of the company's investment banking equity business may not be able to continue. "The two IPO projects in 2020 have been reserved by the investment banking department for a long time, which may not be available this year."

In fact, Cinda securities has only completed two IPO projects since the beginning of 2020. According to wind data, Cinda securities earned 100 million yuan in underwriting fees in the two projects mentioned above. In the first half of 2020, the total investment banking revenue of the company was 261 million yuan, and the investment banking business of Cinda securities, which lost the support of equity project, could only be regarded as mediocre.

Layout of alternative investment banking business

In order to maintain the momentum of investment banking business after the "bumper year" in 2020, Cinda securities is also starting to adjust its development direction.

As early as in 2019, after the change of chairman and general manager, Cinda securities has implemented a set of all-round reforms within the company. After the reform, Xinda securities investment banking business was formally divided into four investment banks, four sub departments.

According to the introduction of the personnel close to the investment banking business of Cinda securities, based on the advantages of Cinda securities in bond and ABS business, the investment banking department 4, which is mainly responsible for the bond business, has been led by Zhu Ruimin, the new general manager of the company before, and then Zhang Xunyuan, an "old general" from the former Guangzhou securities company.

According to public information, Zhang Xunyuan joined Guangzhou securities in 2011 and has been engaged in bond financing related work in the company. Before joining Cinda securities, Zhang Xunyuan was assistant to the president of Guangzhou securities and general manager of bond financing business department.

While rooted in bond financing related business, Cinda securities also hopes to create an "alternative investment bank".

In the prospectus, Cinda Securities said that at present, the company's strategic goal is to build a modern investment bank with industry influence and differentiated brand characteristics with the main development direction of alternative investment behavior, capital intermediary and strategic customers as the starting point.

Cinda securities further explained that the so-called alternative investment bank mainly refers to vigorously expanding the business of alternative investment banking such as merger and acquisition, mezzanine investment, liquidity support, phased shareholding, etc., and comprehensively uses the tool combination of financial consultant, bridge financing, asset restructuring and market value management, and shapes the company's non-performing assets through multi-channel, multi-level and multi-dimensional comprehensive financial services The characteristics of differentiation in the field of operation and special opportunity investment.

"Cinda's alternative investment banking business should refer to investment banking business other than IPO and bond issuance." Some non bank analysts of small and medium-sized securities companies said that as a subsidiary of China Cinda securities company, one of the four largest asset management companies (AMC), AMC business involves enterprise debt restructuring and asset replacement, which are potential projects of Cinda securities in the future.

The people close to Cinda securities also told the 21st century economic reporter that the company's targets are Blackstone Group, oak group, KKR and other foreign alternative investment banks.

It is worth noting that in this round of reform, Cinda securities also abolished the institutional business department and adjusted the corresponding functions to the new strategic customer department.

"In the past, China Cinda introduced customer resources, Cinda securities was responsible for the contracting of ABS, primary market acquisition and other projects, and the strategic customer department mainly carried out the development of strategic customers and group collaboration. Some customers can not be served by the strength of one department alone. They need to mobilize the power of the whole company, including the senior management of the company. " According to the internal staff of Cinda securities, we hope to retain customer resources in the future and provide them with a full set of investment and financing, custody and trading services.

Cinda securities also said in the prospectus intermediary that the strategic customer department is mainly responsible for unifying the strategic customers recommended by various business lines and actively developing strategic customers shared by all business lines, developing and maintaining various channel resources, and carrying out continuous customer maintenance and marketing work. At the same time, it is responsible for cooperating with relevant departments to explore, guide and meet the financial needs of strategic customers, such as trading, investment, financing, custody, etc., and carry out research, customization and promotion of innovative products and services, so as to realize the continuous deepening of customer value.

"Debt restructuring and asset replacement are better connected from the group. To be an alternative investment bank in the future, we should rely on the cooperation between the investment bank and the strategic customer department." Those close to Cinda Securities said.

In the IPO plan, Cinda securities also plans to use part of its funds to support investment banking business, saying that it will expand the capital strength of underwriting business, attract talents, build a team of investment bank personnel, improve the comprehensive service ability of investment banking business, and comprehensively enhance the business strength of investment banking.

In addition, Cinda securities also plans to raise funds through IPO, appropriately increase the scale of securities investment business, enrich the types of self operated business, expand the capital allocation scale of the company's capital intermediary business, and increase investment in asset management business.

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