Chinese-funded securities firms "excessively" spend 17 billion yuan to increase subsidiaries during the year
Our reporter Zhou Shangding
The capital scale of a securities firm determines to a certain extent its comprehensive competitiveness in the industry.
In the "fighting" era, as the proportion of securities companies' subsidiaries' performance contributions continues to rise, many securities companies did not hesitate to supplement their subsidiaries' net capital during the year.
According to incomplete statistics from a reporter from the Securities Daily, since this year, at least 11 securities companies have planned to increase or complete capital increase in their subsidiaries, with a scale of about 17 billion yuan, in order to supplement the net capital of their subsidiaries.
As the capital market accelerates the pace of opening up, the willingness of brokerages to "go global" is increasing. Since the beginning of this year, 6 of the 11 brokerages mentioned above plan to increase or complete their capital increase in their Hong Kong, China subsidiaries.
At least 11 brokers during the year
Increase capital to subsidiary
According to incomplete statistics from the Securities Daily, since this year, at least 11 securities firms including Haitong Securities, China Merchants Securities, Founder Securities, and Donghai Securities have increased their capital in their subsidiaries, with a capital increase of about 17 billion yuan.
At the same time, the outstanding performance of brokerage subsidiaries in recent years has also ushered in opportunities for development.
From the current point of view, the securities firm plans to increase the amount of capital in the subsidiary company with the highest amount of Haitong Securities. Its board of directors deliberated and approved in August to increase the capital of Haitong Innovation by 3 billion yuan in batches by the end of 2020.
In June, Haitong Securities completed an increase of 1.2 billion yuan in Haitong Innovation. After the capital increase, Haitong Innovation's registered capital increased to 5.3 billion yuan.
In fact, during the ten years from 2010 to 2020, the number of securities company members of the Securities Association of China has increased from 106 to 134, and the main source of increase is its member subsidiaries.
From the perspective of the relative increase in operating income and net profit, the increase in revenue and net profit of many brokerage subsidiaries is much higher than that of the parent company's revenue and net profit.
According to the "Securities Daily" reporter combed and found that in the first half of this year, Huatai Zijin Investment, a wholly-owned subsidiary of Huatai Securities, ranked No. 1 among brokerage subsidiaries with a net profit of 1.598 billion yuan.
According to statistics from the Securities Industry Association, its net profit left 118 brokerages behind; while the 25 employees of CITIC Securities Investment, a wholly-owned subsidiary of CITIC Securities, achieved net profit of 979 million yuan in the first half of the year, an eye-catching performance.
It is worth noting that alternative investment subsidiaries are one of the main targets for securities firms to increase capital during the year.
According to incomplete statistics from reporters, five brokerage firms have completed capital increase to alternative subsidiaries, with a total capital increase of approximately 4.57 billion yuan, of which China Merchants Securities Investment has received the most capital increase.
During the period from February to June this year, China Merchants Securities increased its investment in its wholly-owned subsidiary, China Merchants Securities, for a total of 1.47 billion yuan.
On the other hand, during the year, brokerage firms are eager to raise funds, and alternative investment subsidiaries are always indispensable for the investment of financing funds.
So far, 10 securities companies have clearly stated in their refinancing plans that part of the funds raised will be invested in alternative investment subsidiaries.
Among them, Shanxi Securities intends to use one-third (not more than 2 billion yuan) of the total funds raised from the rights issue to increase the capital of its alternative investment subsidiary Shanzheng Innovation.
China Merchants Securities also stated in the allotment plan that it intends to use no more than 10.5 billion yuan to raise funds for the capital increase and diversification of subsidiaries, and vigorously develop alternative investment and other businesses.
In addition, there are 8 listed securities companies including China Securities Investment Corporation mentioned in the refinancing plan that part of the raised funds will be used for alternative investment subsidiaries.
Brokers intensively increase capital in Hong Kong subsidiary
Vigorously develop international business
In order to further develop overseas business, brokerage companies are also continuously increasing their capital in Hong Kong, China, revealing their international development strategy.
According to incomplete statistics from the "Securities Daily" reporter, since this year, China Merchants Securities, Centaline Securities, Donghai Securities, Founder Securities, Orient Securities, and Everbright Securities have planned to increase or complete their capital increase in their Hong Kong subsidiaries.
On September 29, the board of directors of Founder Securities agreed to the company's capital increase to Founder Hong Kong Financial Holdings not to exceed 350 million yuan.
On July 1 this year, Founder Securities just completed the capital increase of Fangzheng Hong Kong Financial Holdings by 200 million yuan; on October 12, Founder Securities once again stated that in accordance with the company’s approved foreign exchange purchase quota and affected by exchange rate changes, Founder Securities completed Founder Hong Kong Financial Holdings' actual capital increase was equivalent to a contract of 289 million yuan.
Founder Hong Kong Financial Holdings is a wholly-owned subsidiary established in Hong Kong, China by Founder Securities with its own funds approved by the China Securities Regulatory Commission.
In addition, on September 28, the board of directors of China Merchants Securities agreed to increase the capital to China Merchants International not exceeding HK$2.35 billion, and the amount of capital increase is subject to the approval of the regulatory agency.
At the same time, in April, the board of directors of Centaline Securities reviewed and approved the capital increase of HK$500 million to HK$1 billion for Zhongzhou International, a subsidiary of Hong Kong, China.
In August, Everbright Securities completed an increase of HK$2.3 billion in capital to its wholly-owned subsidiary, Everbright Financial Holdings; in the same month, Orient Securities completed a capital increase of RMB 500 million to its wholly-owned subsidiary, Oriental Financial Holdings.
In March, Donghai Securities completed the capital increase of HK$700 million to its wholly-owned subsidiary Donghai International.
In this regard, Zhao Yayun, a researcher at the CITIC Reform and Development Research Foundation, told a reporter from the Securities Daily: “Securities companies continue to increase capital in Hong Kong, China, and they are considering vigorously developing international business.” (Securities Daily)