CITIC Securities (600030) Company Comment: CITIC Disposal of CITIC Construction Investment Shares Is Expected to Increase 19E Net Assets by 2-3%

CITIC Securities (600030) Company Comment: CITIC Disposal of CITIC Construction Investment Shares Is Expected to Increase 19E Net Assets by 2-3%

CITIC Securities is the fourth largest shareholder of CITIC Construction Investment, with a shareholding ratio of 5.

58% According to the announcement of CITIC Construction Investment on the evening of June 25, CITIC Securities plans to reduce its holdings by no more than 1 through auction transactions.

5.3 billion shares, that is, not more than 2% of the total share capital of CITIC Construction Investment; by holding less than 3 shares through block trading.

0.6 billion shares, or less than 4% of the total share capital of CITIC.

For bulk reductions, the period of reductions will be from July 1, 2019 to December 27, 2019.

In 2005, CITIC Securities and China Construction Bank invested in 16 respectively.

200 million and 10.

800 million with 60% and 40% shareholdings respectively. CITIC Construction Investment Securities Co., Ltd. was established.

In 2010, CITIC Securities transferred the 45% and 8% shares of CITIC Construction Investment Co., Ltd.’s holders, respectively, through transfers listed on the Beijing Financial Assets Exchange. Among them, Beijing State Administration Center and Century Golden Resources were the transferees 45% And 8%.

Since then, CITIC Construction Investment has publicly issued H shares and A shares, and CITIC Securities’ shareholding ratio has replaced 5.

58%.

Currently holding the stock market value above the book value of 86 trillion, is expected to increase 19E net assets 2-3% CITIC Securities will account for the equity investment of CITIC Construction Investment in long-term equity investment, until the end of 2018 the book value is 26.

8.1 billion.

Scenario 1: Suppose the average transaction price is 2.

5xPB (estimated hub of the securities industry since 2012), with an average transaction price of 14.

48 yuan, the final transaction amount is 6.2 billion US dollars, the difference from the book value is 3.5 billion yuan, accounting for 2% of the net assets of 2019E.

This difference is included in the current profit and loss, accounting for 37% and 24% of the net profit of 18 / 19E, respectively.

Scenario 2: Suppose the average transaction price is 3x PB and the average transaction price is 17.
.

37 yuan, the final transaction amount is expected to be 7.4 billion US dollars, the difference from the book value is 47 trillion, accounting for 3% of the net assets of 2019E.

This difference is included in the current profit and loss, accounting for 50% and 32% of the net profit of 18 / 19E, respectively.

CITIC Securities needs to abide by the new rules for reducing holdings: when using centralized bidding to reduce holdings, the total number of shares to be reduced in any consecutive 90 days shall not exceed 1% of the company’s total share capital; in the case of block trading, the shares shall be reduced within any consecutive 90 daysThe total amount does not exceed 2% of the company’s total share capital.

Investment advice: At present, the country’s positioning of the capital market is still at an historically high level. CITIC Securities has competitive advantages in capital, institutional customer structure, and investment banking, and is expected to benefit significantly.

After disposing of CITIC Construction Investment’s equity, CITIC Securities can release capital and improve capital utilization efficiency to meet its own business development needs.

Considering that the current market value of CITIC Securities held by CITIC Securities is higher than the book value of US $ 8.6 billion, the difference in subsequent distribution income is included in the current profit and loss.Billion, an increase of 57% in ten years.

Maintain “Buy” rating.

南京桑拿网 Risk Warning: The policy falls below expectations, market risk risks, restructuring plans are suspended, risks are suspended or cancelled