Huabao Securities IPO: 90 % of wealth management and self -employment. How can we break the homogeneous competition?

Huabao Securities ranked 71st last year, facing fierce competition and compliance management risks. In addition, the company plans to use the strategic distribution method to issue shares this time

"Investment Times" researcher Guan Yue

After experiencing the latent period of 2021, the brokerage firms rushed to the IPO's "battlefield" this year. Recently, Huabao Securities Co., Ltd. (hereinafter referred to as Huabao Securities) also disclosed the prospectus.

Huabao Securities is a subsidiary of China Baowu, which is headquartered in Shanghai. As of December 31, 2021, Huabao Securities has 25 branches across the country. In terms of equity, China Baowu indirectly holds 99.6614%of the company's shares through Huabao Investment and Huabao Trust, which is the company's indirect controlling shareholder.

Huabao Securities' listing shall not exceed 1.3333333 million shares this time, and the issuance ratio does not exceed 25%of the total share capital after the issuance. The place to be listed is the Shanghai Stock Exchange, and the sponsor (main underwriter) is China International Financial Co., Ltd. It is reported that after deducting the issuance costs, the funds raised by the issuance will all be used to increase the company's capital, supplement the company's operating funds, and support the company's business development.

Researcher "Investment Times" read the company's prospectus and noticed that Huabao Securities focused on disclosing the risks and compliance management risks competing with domestic securities companies. In addition, the company's issuance of issuance is also special. In response to the above issues, the researcher of the Investment Times sought communication from the relevant departments of Huabao Securities, and as of the time, the company had not received the company's reply.

Facing fierce competition

At this stage, my country's securities company's business homogeneity is serious, business varieties and target customers are similar, and competition in the securities industry is becoming increasingly fierce.

According to statistics from the Securities Industry Association, as of December 31, 2021, a total of 140 securities companies in my country. In 2019, 2020 and 2021, the top ten securities companies in operating income accounted for 44.99%, 45.56%, and 47.72%, respectively. , 62.88%and 67.16%, the "Matthew Effect" became more and more significant, and the concentration of the industry continued to increase. Tutoring companies represented by CITIC Securities, Guotai Junan, Huatai Securities, China Merchants Securities, Haitong Securities, etc. The advantages of market share, brand effect, technical reserve and other aspects are more obvious.

According to the data company's operating performance ranking data released by the Securities Industry Association, it ranks 71 in 2021 Huabao Securities. It is also intended to be listed on the market and the current status is also the acceptance of Caixin Securities and open source securities. This ranking is 44th and 45th, respectively.

In 2021, Huabao Securities' operating income was 1.039 billion yuan, and net profit was 160 million yuan.

The company's operating income composition mainly includes wealth management income, securities self -employed income, asset management income, and investment bank income. Among them, wealth management income is the most important source of income of Huabao Securities. From 2019 to 2021, the operating income of the company accounted for 40.96%, 57.76%, and 59.99%, respectively.

In addition, Huabao Securities' self -operated business revenue in the same period was 314 million yuan, 184 million yuan, and 316 million yuan, respectively, accounting for 45.74%, 23.72%, and 30.45%of operating income, respectively. In 2020, the income of self -operated business decreased by 41.46%year -on -year. The prospectus explained that this is mainly due to the company's equity position in the first quarter of 2020, which is mainly dividend -type blue -chip stocks, which affects the stock market fluctuations and revenue has declined.

From 2019 to 2021, Huabao Securities Asset Management Business revenue was 92.2188 million yuan, 127.777 million yuan, and 74.388 million yuan, respectively, accounting for 13.43%, 16.48%, and 7.16%in revenue. From 2019 to 2021, from 2019 to 2021 The average annual compound growth rate was -10.19%. The prospectus stated that the scale of the company's trustee management business has been on the rise, and its own funds fluctuate with the income of investment and investment income.

In 2021, the company's wealth management income, securities self -employed income and asset management accounted for a total of 97.60%of the company's operating income. In the increasingly competitive market environment, the company's income structure and business layout need to be further optimized, thereby reducing the impact of the securities market fluctuations on the company's operating income and profitability.

Strategic matching+balance package sales

It is worth noting that Huabao Securities ’s issuances to be adopted this time include strategic distribution.

According to the prospectus, according to the needs of business cooperation and financing, the company may implement strategic allocation when the A -share issuance is issued to investors who meet the requirements of the company's development strategic requirements and meet the company's development strategy. By then, the communication between the company and the regulatory agency will be determined in accordance with the requirements of laws and regulations and market conditions. At the same time, the underwriting group that is composed of the main underwriter will undergo the shares issued in the form of balance.

According to the "Administrative Measures for Securities Issuance and Underwriting" (seventh revised on June 15, 2018), if the number of shares issued by the first public offering is more than 400 million shares, it can be sold to strategic investors. The issuer shall sign the distribution agreement with strategic investors in advance. The issuer and the main underwriter shall disclose the selection standards of strategic investors in the issuance announcement, the total amount of stocks assigned to strategic investors, the proportion of the shares of this issue, and the term of holding. Strategic investors do not participate in offline inquiries, and shall promise to obtain the holding period of the stock holding this time for not less than 12 months. Although the strategic matching has long been originally originated, in fact, in recent years, it is not common in the motherboard market, but it has been fruitful in science and technology boards and GEM. Of course, the portrait of the two strategic investors is very different.

The science and technology board and GEM are planning to set up strategic sale through setting up executives and core employee asset management plans. At the same time, there will also be securities firms to participate in investment and social capital. Employees' strategic distribution allows executives and core employees and enterprises to form a community of interests, which can improve operating efficiency and also help enhance the stability of control.

For Huabao Securities, strategic matching will help to be issued smoothly, and at the same time, it can also introduce long -term strategic partners to promote the good development of the business; the longer lock -up period can also reduce market fluctuations and reduce the issuance of the market to the market. Intellectual. However, there are also some controversy in the market. One point is that strategic distribution is a way to transport interest groups to interest groups, which harms the interests of small and medium investors.

There is a risk of compliance business

In terms of risk management, the risk coverage rates of Huabao Securities on December 31, 2019, December 31, 2020, and December 31, 2021 were 286.17%, 284.12%, and 233.44%, respectively. , 681.72%and 273.57%, the net stability rates were 172.73%, 187.06%, and 187.30%, respectively.

According to the "Administrative Measures for Securities Company Risk Control Index", the liquidity coverage and net stability rate of securities companies must not be less than 100%. As of the end of 2021, the average risk coverage rate of the securities industry was 249.87%, the average liquidity risk coverage rate was 233.95%, and the average net stability rate was 149.64%. In general, the main risk control indicators of Huabao Securities are higher than the regulatory standards and the industry average. However, the risk coverage rate has declined year by year, and it is lower than the industry average at the end of 2021.

In terms of compliance operations, from 2019 to 2021, Huabao Securities received an administrative penalty and several administrative regulatory measures. The problems mainly include the poor financing use of some projects in stock pledge business, and irregular operations in the development of bond transactions.

Since 2022, Huabao Securities has been self -disciplined regulatory measures. On February 18, 2022, the China Securities Industry Association issued the "Decision on the Management Measures for Self -disciplined Self -disciplined Self -Disciplined Management Measures on the Integrity of Huabao Securities Co., Ltd." ([2022] No. 10 To.

At the end of 2021, Huabao Securities's main risk control indicators

Data source: company prospectus, Wind

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