htmlOn September 14, CICC's stock price fell by 9% in the afternoon, causing the entire securities sector to collapse. What exactly happened?
"Sharing stocks issuances will give you high-paying codes?", "Blatantly grab money", "Employees' sky-high wages, and they ask for money from retail investors", "This kind of money-making junk company"... Why did CICC cause criticism from investors?
htmlOn September 13, CICC released the 2022 annual share issuance public securities offering plan. According to the announcement, the types of shares issued in this share is A shares and H shares, with a face value of RMB 1.00 per share. The shares are allocated to the original shareholders. It is planned to allocate 3 shares for every 10 shares, and the total amount of funds raised for allotment is expected to be no more than RMB 27 billion. The net amount of funds raised after deducting relevant issuance expenses is intended to be used to supplement capital to support the development of various businesses and to supplement other working capital.
"Stock Allocation" = Stock price plummeted?
When the word "share allocation" is mentioned, the first thing investors think of is the sharp drop in stock prices. In fact, many securities companies have conducted "share allocations" this year. Let's see if the stock allocation will really shock the stock price and how big the impact will be?
First look at CITIC Securities . On the evening of January 13, CITIC Securities officially issued a share allotment announcement, with the share allotment price being 14.43 yuan and the share allotment scale reaching 28 billion yuan.
CITIC Securities' stock price trend after the issuance of shares
Source: Dianzhang Finance
Statement announcement announced the day after the issuance of CITIC Securities' stock price plummeted by 5%; then the stock price fluctuated for nearly a month and began to fall sharply, with the stock price being below 20 yuan for a long time.
Let’s look at Industrial Securities . On August 11, Industrial Securities (601377) issued a share issuance announcement showing that it plans to all shareholders based on the total share capital of Industrial Securities 6.697 billion shares after the closing of Shanghai Stock Exchange on August 16, 2022, and will be allocated to all shareholders at a ratio of 3 shares per 10 shares. The total amount of allotable shares is 2.009 billion shares, all of which are unrestricted circulating shares.
Stock price trend after the allocation of shares
Source: Dianzhang Finance
htmlOn August 12, the stock price of Industrial Securities fell by 3%, and then was in a narrow range of fluctuation in , and there was no downward trend like CITIC Securities for the time being.
Securities sector trend
Source: Dianzhang Finance
Let’s look at it again. The trend of the entire securities sector has shown a downward trend since the beginning of 2022. In other words, the cliff decline of CITIC Securities is actually inconsistent with the overall trend of the securities sector and is not caused by simply the stock allocation itself.
The author believes that the decline in the stock price caused by the share allocation is only a temporary panic selling of retail investors, and does not mean that the stock price will go down in the next period of time. So, there is no need to be overly disappointed.
CICC is seriously overvalued, and small securities companies are worth paying attention to
Taking advantage of the sharp drop in stock prices, some investors also want to enter the market. So what about CICC's fundamentals ? Is it worth investing in?
Comparison of CICC's revenue and securities sectors
Source: Dianzhang Finance
Data shows that CICC's revenue in the middle quarter of 2022 was 12.132 billion; gross profit margin was 37.40%. Compared with the securities sector, the average revenue was 6.364 billion yuan; the average gross profit margin was 36.81%. It can be said that the company's profitability and growth ability are pretty good.
CICC valuation space
Source: Dianzhang Finance
From the perspective of valuation space, CICC's central value space is -60%, which is in a serious overvaluation state. The author believes that although the stock has strong growth ability, its valuation space is poor and the degree of control is extremely high. Fund pays attention to it, and hot money high control. Pay attention to when making good choices, control the position and configuration not too high.
Aniu Zhitou Investment Consulting Advisor He Shaojie said that the performance of the securities sector will return in the second quarter and will be relatively stable in the third quarter. The sector's stock price is currently at a historical low and has a low valuation. In the future, there will be either sideways or rising, with a relatively small space to go down. Securities companies are a very safe industry.Recently, the securities sector has undergone frequent abnormal movements. Every time the securities company moves abnormally, it is mainly small securities companies. With the attention of hot money, small securities companies have good flexibility.
What do you think? Welcome to discuss together.
Warning: If the article involves stock is only used as a case and does not constitute any recommendation! Operation based on this is at your own risk!
