China Merchants Securities (600999) dynamic comment: rights issue is not negative

China Merchants Securities (600999) dynamic comment: rights issue is not negative

The company issued a public resolution on March 12 for repurchase and rights issue. However, these two measures caused the opposite flow of funds between the company and the capital market, attracted market attention, and investors were quite dissatisfied with the rights issue.

We believe that the rights issue at the current point in time will not reduce the company’s investment value, and the participation in the rights issue will bring new buying points.

The rights issue will gradually become the normal refinancing of A shares.

Rights issue is a kind of financing method for listed companies. It is a neutral behavior in itself. However, in the past, listed companies preferred to use a rights issue at the same time as a fixed increase. However, the new rules for refinancing and the implementation of new rules to reduce holdings have been very difficult.Big restrictions, smaller approval shortcomings will increase the utilization rate.

The market’s prejudice against rights issue mainly lies in the fact that the market value of participating shares before and after the ex-rights is unchanged, but not participating in the rights issue will result in losses due to the discount. Therefore, small and medium shareholders can only choose to accept or sell, which is autonomous.

However, as far as the company’s rights issue is concerned, we don’t think there is such a prejudice: 1) the brokerage sector is still in the growth market, and after the removal of the rights, it is expected to usher in the rights market; 3) the industry ‘s fundamentals this year are in line with the turning point and financing is procyclicAct to increase profits; 2) Sword refers to the use of raised funds for science and technology innovation board (subsidiary capital increase and diversified distribution of 10.5 billion / 70%), capital supplementation is conducive to seize the opportunity; 4) interest growth requires the shareholders’ meeting (expected monthly end reportBefore the release) and the size of the CSRC, there is plenty of time to distribute the registration date, which is conducive to digesting non-participating chips.

The repurchase is more symbolic than incremental buying, but the upside is clear.

The repurchase plan 北京夜网 issued by the company at the same time is no more than RMB26.

The price of 35 yuan / share was repurchased within 1 year at the shareholders’ meeting.

5?
1.3 billion shares for subsequent implementation of equity incentives or employee stock ownership plans.

The reason why the company’s repurchase amount is far lower than the baseline CITIC repurchase index is that it uses the company’s own funds for repurchase, so it is more symbolic than incremental purchase orders, and the core employee benefits are restricted through equity incentives or employee stock ownership, which is beneficial to the company’s long-term development; And 26.

The 35 yuan repurchase cap is more than 50% of the current accumulation, reflecting the company’s recognition of its own value space.

Investment suggestion: continue to be optimistic 厦门夜网 about the company’s investment value, and do not participate in the short-term placement of chip code to bring allocation opportunities. It is expected that the EPS for 2018-2020 will be 0.

72/0.

88/0.

92, buy level.

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