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CMS to hold A and H share rights issues
Posted on Wednesday, 29 July 2020 05:09
China Merchants Securities (CMS) is proposing a rights issue comprising H shares worth HKD 2.41 billion (USD 310.90 million) and A stocks valued at CNY 12.80 billion (USD 1.83 billion).
The company has been listed in Hong Kong since October 2016 and on the Shanghai Stock Exchange since November 2009.
It offers comprehensive financial products and services to individual, institutional and corporate clients.
CMS mainly operates in four business lines, namely wealth management and institutional, investment banking asset management, and trading.
The company, under the control of China Merchants Group, claims to be the largest securities firm under the State-owned Assets Supervision and Administration Commission of the State Council.
In the 12 months ended 31st December 2019, total revenue and income amounted to CNY 25.66 billion, representing a 42.0 per cent increase year-on-year.
Net profit attributable to shareholders rose 64.6 per cent to CNY 7.28 billion.
CMS intends to sell 294.12 million H shares at HKD 8.19 apiece, which is a discount of 41.8 per cent to the close of HKD 14.06 on 6th July, being the date of the underwriting agreement.
Its offer on the basis of 3:10 is also down 20.3 per cent to the theoretical ex-rights price of HKD 10.27 based on the close of HKD 10.90 on 3rd July.
CMS is selling 1.72 billion A stocks at CNY 7.46 each on the same ratio; the issue price is a discount of 71.9 per cent to the close of CNY 26.57 on 3rd July.
Proceeds will be used for the increase of capital in subsidiaries and the diversification of the company’s business, the development of its intermediary and investment operations, and as working capital.
The company cautioned that the use of money raised carries some uncertainty as it is closely related to the business climate of the securities market in China, its analysis of the country’s macro-economy and its ability to capture opportunities.
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