Another major shareholder of a brokerage firm will be lifted from restriction, this time it is Guotai Junan Securities.
Guotai Junan Securities announced tonight that the company's 2.783 billion restricted shares will be lifted on June 26, involving Shanghai International Group Co., Ltd. , Shanghai State-owned Assets Management Co., Ltd., Shanghai Shangguo Investment and Property Management Co., Ltd., Shanghai International Group Asset Management Co., Ltd., Shanghai International Group Asset Management Co., Ltd., Shanghai International Group Asset Management Co., Ltd. and the National Social Security Fund to transfer to two 6 shareholders. In other words, this time involves the lifting of the restricted shares of the actual controller of Guotai Junan .
Industry insiders believe that although the scale of this lifting of the ban is large, considering that the current share price of Guotai Junan is lower than the issue price, and the controlling shareholder and his joint actors promised at the beginning of the company that if the shares they hold are reduced in two years after the expiration of the restricted period, the share reduction price shall not be lower than the issue price of the issuer's initial public offering of A-shares. Therefore, the actual controller of Guotai Junan may not reduce its holdings after the ban is lifted.
The actual controller’s restricted shares are lifted
Guotai Junan announced this evening that 2.783 billion restricted shares of the company will be lifted on June 26, accounting for 31.94% of the company’s total share capital.
The shares released this time are the company's initial public offering of restricted shares, involving 6 shareholders who have transferred two households to Shanghai International Group Co., Ltd., Shanghai State-owned Assets Management Co., Ltd., Shanghai Shanghai International Group Asset Management Co., Ltd., Shanghai International Group Asset Management Co., Ltd., Shanghai International Group Asset Management Co., Ltd. and the National Social Security Fund to hold two shareholders.
Among them, Shanghai State-owned Assets Management Co., Ltd., Shanghai Shangguo Investment and Property Management Co., Ltd., Shanghai International Group Asset Management Co., Ltd. and Shanghai International Group Asset Management Co., Ltd. are all subsidiaries of Shanghai International Group Co., Ltd. In other words, this time involves the lifting of the restricted shares of Guotai Junan's actual controller.
Guotai Junan's 2017 annual report shows that Shanghai State-owned Assets Management Co., Ltd. is the controlling shareholder of Guotai Junan, and the total holdings account for 23.56% of the company's total holdings capital ; Shanghai International Group Co., Ltd. is the actual controller of Guotai Junan, and the total holdings account for 32.73% of the company's total holdings.
is estimated based on the latest closing price. The total market value of this unblocked market reached 45.676 billion yuan, while the company's current circulating market value is 77.667 billion yuan, which means that this unblocking will increase the circulating market value of 58.81% to the entire market.
Before this lifting of the ban, Guotai Junan had already lifted the ban on June 27, 2016. At that time, the banned shares were 3.249 billion shares, accounting for 42.61% of the company's total share capital. Will the actual controller reduce its holdings after
is lifted?
For secondary market investors, the lifting of the company's stock ban itself is not scary. What is scary is that the company's major shareholders run fast and reduce their holdings as soon as the ban is lifted, resulting in continued pressure on the secondary market prices. However, in the case of Guotai Junan, the company's controlling shareholder and joint actors did not have the motivation to reduce their holdings in large proportion. The most important reason for
is that the actual controller of Guotai Junan issued a public commitment to extend the lock-up period at the beginning of its listing.
According to the prospectus, Guotai Junan's controlling shareholder State-owned Assets Company, the actual controller International Group and its joint actors Shanghai International Trust, International Group Asset Management Company, and International Group Asset Management Company announced that "if the shares held by the issuer are reduced in holdings two years after the expiration of the share circulation restriction period, the reduction price shall not be lower than the issue price of the issuer's initial public offering of A shares."
Considering that Guotai Junan's current share price is only 16.41 yuan, it is 16.74% lower than the original issue price of 19.71 yuan. Unless the stock price rises sharply, after the ban is lifted this month, there is almost no room for controlling shareholders and their joint actors to reduce their holdings.
At the same time, even if the dividend impact during the period is considered and the stock price is adjusted, the current corresponding price per share is 17.33 yuan (after re-right), which is 12.06% lower than the initial price.
disclosed according to the prospectus, if the state-owned assets company, international group and its joint actors fail to perform in accordance with the above commitments, the issuer has the right to recover the corresponding income obtained from the reduction of shares in violation of the commitment.
In addition, assuming that Guotai Junan's stock price enters the allowable reduction range in the future, Shanghai State-owned Assets Management Company and Shanghai International Group have also promised that "if the shareholding is reduced within two years after the expiration of the shareholding circulation restriction period, the cumulative reduction of holdings will not exceed 3% of the total number of Guotai Junan's shares."
According to people close to Guotai Junan, Shanghai International Group, as a municipal asset operation platform, is one of the first five institutions to be piloted for financial holding group supervision. It has certain holding requirements for financial institutions and generally does not tend to reduce its shareholding ratio.
The more obvious evidence is that when Guotai Junan H shares were listed last year, in order to not dilute the holdings, Shanghai International Group subscribed a total of 152 million H shares in the global offering, reflecting the confidence of major shareholders in the company and support for the issuance of H shares.
Guotai Junan with low valuation and high ROE
On June 26, 2015, Guotai Junan was listed on the Shanghai Stock Exchange. On that day, the Shanghai Composite Index fell 7.4% in one day and closed at 4192.87 points. Against this background, Guotai Junan opened in the trading day after its listing, and only 3 consecutive daily limit hits were harvested after listing.
is also in this market environment. Guotai Junan's stock price is inevitably lower than the issue price. The stock price has repeated after that, but the stock price has been at a low level, which also makes Guotai Junan's stock maintain its low valuation characteristics.
According to statistics from a reporter from Securities China, as of today's closing price, Guotai Junan's closing price per share was 16.41 yuan, 16.74% lower than the original issue price of 19.71 yuan. If the dividend impact during the period is considered, the current price per share is 17.33 yuan (after re-right), 12.06% lower than the initial offering price.
Lower stock prices bring relatively low valuations. As of today's closing, Guotai Junan's price-to-book ratio is 1.14 times, ranking 6th lowest among listed brokers, and its price-to-earnings ratio is 14.93 times, ranking 4th lowest among listed brokers.
But at the same time, Guotai Junan's profitability is relatively high. Referring to the 2017 annual report, Guotai Junan's ROE (return on net assets) reached 9.05%, ranking 6th among listed securities companies. In the first quarter of this year, Guotai Junan's ROE was 1.98%, ranking second among listed brokerages.
It is worth mentioning that Guotai Junan achieved a net inflow of cash flow of in the first quarter of 25.319 billion yuan, and mainly a net inflow of operating cash flow of 33.012 billion yuan. The net cash flow in the first quarter ranked first among listed securities companies.
The company's business development is stable
Yesterday, the China Securities Association recently announced the "2017 Securities Company Member Operation Performance Ranking", and all the audited operating data and business status ranking results of 98 securities companies in 2017 were disclosed.
At the end of 2017, Guotai Junan had total assets of 346.41 billion yuan and net assets of 122.562 billion yuan. Both indicators ranked second among 98 securities firms. The company's operating income was 23.804 billion yuan, ranking third, and its net profit was 8.728 billion yuan, ranking second. (Note: The association data is based on the parent company's caliber)
Last year, Guotai Junan completed the issuance of H shares and convertible bonds, and the strength of net capital has increased significantly. At the end of last year, Guotai Junan had a net capital of 115.2 billion yuan, ranking first in the industry. CITIC Securities has a net capital of 91.849 billion yuan, ranking second in the industry. This is also the first time in recent years that Guotai Junan's net capital scale has surpassed CITIC Securities and has jumped to the top in the industry.
specifically deals with various businesses. The annual report shows that as of the end of 2017, Guotai Junan's equity financing underwriting amount ranked second in the industry, stock pledge repurchase financing funds ranked second in the industry; the net income of agency securities trading business ranked first in the industry, margin trading balance ranked second in the industry, and the net income of agency financial products ranked first in the industry; the entrusted funds and monthly active asset management scale of asset management business ranked third in the industry.
In the first quarter of this year, Guotai Junan's operating income was 6.245 billion yuan, an increase of 11.78% year-on-year; net profit was 2.259 billion yuan, a decrease of 11.85% year-on-year. Both indicators rank second in the industry.
This article comes from brokerage China
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