I’d like to start off this Monday with a brief apology for my own erratic writing these last few days, as I’ve been traveling in the US and my schedule has become a bit spotty. But that said, I’ll begin this sunny Monday in Los Angeles with some postscripts to items I wrote about last week on troubled education services firm New Oriental (NYSE EDU) and leading Chinese brokerage Citic Securities (HKEx: 6030; Shanghai: 600030), neither of which is inspiring much confidence in investors these days.
Tag Archives: CITIC Securities
News Digest: July 19, 2012 报摘： 2012年7月19日
The following press releases and media reports about Chinese companies were carried on July 19. To view a full article or story, click on the link next to the headline.
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- Citic Securities (HKEx: 6030) Announces Preliminary H1 Results (HKEx announcement)
- Yum’s (NYSE: YUM) Profit Disappoints, Hurt By China Costs (English article)
- ZTE (HKEx: 763) Wins China Mobile Hong Kong TD-LTE Tender (English article)
- New Oriental (NYSE: EDU) Gains After Refuting Muddy Waters’ Charges (English article)
- China Mouthpiece Xinhua Reports 5.6 Billion Yuan Revenue in 2011 (English article)
- Latest calendar for Q2 earnings reports (Earnings calendar)
CITIC on Global Buying Hunt 中信集团加入全球收购行列
CITIC Group, one of China’s oldest private investors, is joining a growing number of Chinese investors looking for bargains being sold off as a result of the global financial crisis, with media reporting the company’s brokerage arm is seeking to buy a major brokerage asset from France’s Credit Agricole (Paris: CAGR). (English article) The deal, which would see CITIC Securities (HKEx: 6030; Shanghai: 600030) buy Credit Agricole’s CLSA brokerage brand, would mark the second major attempt to purchase of a global asset by CITIC this year, following news last month that another of the company’s units, CITIC Capital, was making a bid for AsiaInfo-Linkage (Nasdaq: ASIA), one of the oldest US-listed Chinese companies. (previous post) In fact, the Credit Agricole talks aren’t completely new, as CITIC was previously in discussions to buy a smaller stake in the CLSA brokerage unit along with another related asset from the French bank, which was trying to raise cash after taking a hit during the global financial crisis. But what’s new is that CITIC is now looking to buy the CLSA brokerage unit outright, rather than just a 19 percent stake that was being discussed earlier. That seems to indicate that Credit Agricole wants to reach a deal soon and is willing to give a good price, as talks have dragged on for a while now. Likewise, the AsiaInfo deal also looks like a relative bargain as the company’s shares have taken a beating over the past year, down more than 50 percent in 2010, amid a broader sell-off for US-listed Chinese stocks following a series of accounting scandals at several major listed players. Both deals look like they would be in the $1 billion range, which looks like a good comfort level for a group like CITIC, which has plenty of cash, including $1.7 billion raised by CITIC Securities in a Hong Kong IPO last year. CITIC is just the latest in a growing field of cash-rich private Chinese investment groups looking for bargains on the global stage in the wake of the global financial crisis, as most suffered little or no damage themselves during the crisis. Earlier this year, Fosun International (HKEx: 565) said it is eying potential investment oportunties in Europe, where many companies are looking to sell off assets as the continent grapples with its ongoing debt crisis. (previous post) Another aggressive player, HNA Group said last fall it has embarked on a global buying spree that has seen it snap up assets in a range of industries, including shipping and hotels, and boasting it has an additional war chest of more than $6 billion for more purchases. (previous post) Look for even more of these deals in the year ahead, probably mostly focused in the $1 billion range or less, as Chinese investors get more aggressive on the global stage.
Bottom line: CITIC is the latest private Chinese investment firm to step up its activity on the global stage, looking for bargains being sold by cash-hungry western firms.
Related postings 相关文章:
◙ Investors to AsiaInfo: Let’s See Some Numbers 投资者对亚信创联并购案减失耐心
◙ Gree, Bright Food, Fosun in New Global Moves 格力电器、光明食品和复星集团全球新动向
CITIC Securities, Koreans Challenge Western Giants 中信证券和韩国电视台挑战西方企业
Two separate news bits out today show that Asian firms, in this case leading brokerage CITIC Securities (HKEx: 6030; Shanghai: 600030) and 3 Korean TV program makers, may pose an interesting challenge to Western names in lucrative developing new business areas in now taking shape in China. In the first of those bits, CITIC Securities announced it has just received regulatory approval to become a renminbi qualified foreign institutional investor (RQFII), a new program that allows financial services firms to raise Chinese yuan outside the country for re-investment in China stocks and other financial products. (company announcement) RQFII specifically targets a growing number of foreigners who want to invest in the yuan offshore as China moves to internationalize its currency, also known as the renminbi. To date, this offshore yuan business, mostly centered in Hong Kong, has been dominated by big foreign names like HSBC (HKEx: 5; London: HSBA), so it’s interesting to see a big Chinese name like CITIC Securities getting involved so quickly in the new RQFII scheme. Of course CITIC Securities will now have to convince foreign investors that it can get them better returns for their yuan than big foreign names that are also applying for RQFII status. But given its market-leading position in China and strong knowledge of Chinese markets, I would expect to see CITIC Securities become a top-tier player in this new and potentially lucrative area in the next 1-2 years. In the second news bit, PPLive, an IPO candidate and one of China’s top video sharing websites, has signed an exclusive deal to license all TV dramas from 3 Korean TV networks for the next 3 years. (English article) No financial details were given and I’ll admit I don’t know anything about the 3 Korean networks in this deal; but the amount of programming does look massive, involving 12,000 episodes of various TV series with 13,500 hours of programming. This deal is interesting in the light of a recent series of high-profile licensing deals between other video sharing sites like Youku (NYSE: YOKU) and Tudou (Nasdaq: TUDO) with major Hollywood studios, and shows that other Asian program makers, whose shows are popular among many Chinese, will also be competing to cash in on demand from these content-hungry Chinese video sites. Look for more such blockbuster deals from other Asian markets like Japan, Taiwan and Hong Kong in the months ahead.
Bottom line: New deals involving CITIC Securities in the offshore yuan business and Koreans in video licensing show Asian firms will win growing business in areas traditionally dominated by Westerners.
Related postings 相关文章:
◙ Video Makers On Cusp of Renaissance 视频制作商或迎来美好时代
◙ ICBC Discovers China’s Latest Low-Cost Export: Currency 工行将从非洲人民币结算业务中获益
◙ Foreign Banks in China: A Love Affair Ends 外资银行撤资与中国同行说再见
News Digest: December 28, 2011
The following press releases and media reports about Chinese companies were carried on December 28. To view a full article or story, click on the link next to the headline.
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◙ Chinese Banks Under Pressure To Raise Cash Next Year: Source (English article)
◙ Regulator To Promote Broadband With Higher Speeds, Lower Prices in 2012 (Chinese article)
◙ CITIC Securities (HKEx: 6030) Receives Approval For RQFII Qualification (company announcement)
◙ Tencent (HKEx: 700), CNTV Partner on Multi-product Platform (English article)
◙ China Says Western Digital (NYSE: WDC) Buying Hitachi Unit Hurts Mkt Competition (English article)
2011 Limps Out With Haitong IPO Withdrawal 海通证券推迟IPO 2011以市场疲弱状态落幕
2011 could well go down as one of the most schizophrenic years for IPOs in recent memory, with the latest pulling of a mega-offering by Haitong Securities (Shanghai: 600837) symbolizing the dismal sentiment that has set in over the last 6 months after a strong start to the year. According to foreign media reports, Haitong, which is already listed in Shanghai, has decided to scrap its Hong Kong offering that would have seen it raise up to $1.7 billion due to dismal market sentiment. The decision comes after a steady string of other deals that were either scrapped or went forward with weak results. One of the biggest, a Hong Kong offering by Haitong rival CITIC Securities (HKEx: 6030; Shanghai: 600030) had to be scaled back but still went ahead despite the weak sentiment. Since then, the company’s shares have sunk about 3 percent from their IPO price in September, despite its premier status as China’s biggest brokerage. Other smaller offerings by online video site Xunlei and Shanda‘s (Nasdaq: SNDA) online literature unit Cloudary had to be were pulled as well, again due to weak investor sentiment. These smaller US companies have been hit not only by that weak broader sentiment, but also by more specific concerns about Chinese firms’ accounting practices following a series of accounting scandals earlier in the year. Companies that have gone forward with offerings this year have hardly offered any reassurance. Shares of Renren (NYSE: RENN), a leading Chinese social networking site, now trade at about a quarter of their IPO price since their May offering; while shares of video sharing site Tudou (Nasdaq: TUDO), which made its IPO in August when sentiment was already weak, have sunk by more than half from their IPO price even after the company reported a surprise third-quarter profit. The combination of confidence crisis and broader weak market sentiment is no doubt behind the huge losses for US-listed China stocks. That said, investor sentiment is notoriously cyclical, and I would expect people to rediscover the big potential of China stocks sometime next year, probably around the second quarter, at which time we should see names like Haitong and perhaps even Cloudary or Xunlei make a second try at an IPO. In the meantime, braver investors with money to spare could position themselves for some nice returns by buying shares now ahead of the next uptick.
Bottom line: Haitong Securities’ pulling of its IPO reflects a dismal IPO environment that should be near bottom, with sentiment likely to pick up for China plays around the second quarter of 2012.
Related postings 相关文章:
◙ Internet Investors Seek Refuge in Big Names 互联网投资者选择性支持中国市场领头羊
◙ Shanda Moves Ahead With Privatization 投资者对盛大私有化仍持保留态度
◙ Year End Brings Problematic New IPO Wave 中国新一波IPO潮或无法达预期效果
HK Woes Point to Shanghai Sell-Off Next Week 港股跌宕起伏沪深後市堪忧
China’s struggling stock markets are taking a much-needed weeklong break for the National Day holiday, but weak sentiment has continued unabated in Hong Kong, where the stock market tanked earlier in the week and shares of premier brokerage Citic Securities (HKEx: 6030) stumbled badly in their first trading debut outside China. The Hong Kong board started off the week in free-fall, shedding 7.6 percent on Monday and Tuesday before staging a rally on Thursday. But it was still down 2.4 percent at the start of the Friday trading day, and the volatility clearly reflects investor angst over what will happen when trading resumes in Shanghai and Shenzhen next Monday, with more sell-offs likely. In the midst of the chaos, shares of Citic Securities (Shanghai: 600030), the first in a string of high-profile listings of major state-connected firms aimed at propping up the markets, stumbled out of the gate, losing as much as 10.5 percent from their IPO price on their first trading day before finishing the day unchanged, even as the broader market rallied 5.7 percent. (English article) The weak debut, which came after Citic Securities already scaled back the offering and priced its shares at the low end of their range, bodes poorly for a number of other major state-run firms lining up to go public, including Sany Heavy Industries (Shanghai: 600031), which is also planning a listing in Hong Kong, and China Communications Construction, which is planning a Shanghai listing. (previous post). Meantime, the weakness has led two premier Hong Kong-listed China Internet names, Tencent (HKEx: 700) and Alibaba.com (HKEx: 1668), to do the once unthinkable and actually buy back their shares (Tencent article; Alibaba article). They join a list of peers that has so far included many mid-sized US-listed China tech firms like Ctrip (Nasdaq: CTRP) and Renren (NYSE: RENN) but has yet to see the likes of top names like Baidu (Nasdaq: BIDU) and Sina (Nasdaq: SINA) resort to such buy-backs. But if the current sell-off continues, we might even see these big names join the buy-back frenzy, showing just how low sentiment has sunk towards China plays, especially Internet stocks.
Bottom line: China’s stock markets will fall when trading resumes next week, extending sell-offs in Hong Kong and New York while Chinese markets were closed for the October 1 holiday.
Related postings 相关文章:
◙ Beijing IPO Campaign to Boost Markets Falls Flat 大宗IPO提振中国股市或成泡影
◙ China Offers Up Premier IPOs to Revive Markets 大企业沪港上市 政府借机重燃沪港生机
◙ CITIC Securities $2 Bln IPO Looks Good, With Potential to Jumpstart HK 中信证券香港IPO值得期待
Beijing IPO Campaign to Boost Markets Falls Flat 大宗IPO提振中国股市或成泡影
Beijing is quickly discovering that it can throw a party by making mega-IPOs for some of its best companies in a bid to revive its moribund stock markets, but there’s no guarantee that anyone will come to join the fun. That appears to be the lesson as CITIC Securities (Shanghai: 600030) has been forced to pare back its plans for a Hong Kong IPO by more than 10 percent due to lackluster demand. (English article) The company, which offers one of the best windows for foreign investors into China’s promising financial sector, is now aiming to raise just $1.7 billion, compared with a previous target of $2 billion, after pricing the deal at the low end of its range. The reduced offering and final pricing, which give the company a modest price-to-earnings ratio of just 9 times 2011 earnings, are a bit surprising after reports said earlier this week that the deal was 4 times covered. Clearly either the company’s bankers were exaggerating to generate more enthusiasm, or investors got cold feet due to growing uncertainty about China’s financial sector, or most like a combination of the 2 was behind this disappointing result. CITIC Securities was to be the first of a steady stream of Chinese blue-chip firms to make new mega-listings in Hong Kong and Shanghai, in what I suspect was a carefully orchestrated effort by Beijing to revive those two markets — especially a Shanghai market now trading at its lowest levels in over a year. Other major firms that announced mega listing plans included Sany Heavy Industries (Shanghai: 600031), which was aiming to raise $3.3 billion in a Hong Kong listing; and Sinohydra Group, operator of the 3 Gorges Dam, and China Communications Construction, which were aiming to raise $2.6 billion and $3.1 billion, respectively, through listings in Shanghai. (previous post) Some of the companies were already talking about reducing or canceling their offerings due to weak market demand, and this disappointing showing for CITIC Securities will only cause more hesitation. If I had some extra money to spend, I would invest in some of these upcoming IPOs, as they will undoubtedly offer nice bargains for some of China’s top corporate names. That will be bad news for Beijing, which was hoping to get better returns for some if its top-notch players.
Bottom line: Investor angst will undermine Beijing’s plans to revive markets with IPOs for some of China’s top companies, providing bargain buying opportunities for bolder investors.
中国当局很快就发现：虽然能通过一些优质企业大规模招股为股市注入活力，但却不能保证有多少人愿意凑这场热闹。中信证券(600030.SS)在香港IPO，由于需求不旺而降低了筹资额。中信证券是外国投资者押注中国金融业的一个良机，原计划透过在港IPO筹资20亿美元，但最终以招股价指导区间低端定价，筹资额减为17亿美元。这有点令人意外，因本周稍早报导称，中信证券H股获得了四倍认购。这麽看来，要麽是承销商为吸引投资热情而夸大其词，要麽就是投资者面对中国金融业的不确定性望而却步，更大的可能是二者兼而有之。我猜测中信证券香港IPO可能是中国政府精心策划的，希望能藉此提振沪港股市，尤其是跌至逾一年低位的沪市。其他宣布了大宗上市计划的还有三一重工(600031.SS)、中国水电和中国交通建设等。三一重工计划在香港上市融资33亿美元；中国水电是三峡大坝建设方，计划在沪市融资26亿美元；中国交通建设则计划在沪市融资31亿美元。由于市场需求低迷，有些公司已经在考虑削减或取消上市计划，而此次中信证券的表现，肯定会令它们更加迟疑。不过，如果我手头有闲钱，我就会买这些即将上市的新股，因为肯定能够以较低的价格，买到这些中国顶级企业的股份。不过这样的局面，恐怕会令中国当局感到失望。
一句话：投资者不安情绪，不利于中国当局藉由大宗IPO提振股市的计划，不过对胆大的投资者来说，倒是不错的买入时机。
Related postings 相关文章:
◙ China Offers Up Premier IPOs to Revive Markets 大企业沪港上市 政府借机重燃沪港生机
◙ CITIC Securities $2 Bln IPO Looks Good, With Potential to Jumpstart HK 中信证券香港IPO值得期待
News Digest: September 29 2011
The following press releases and media reports about Chinese companies were carried on September 29. To view a full article or story, click on the link next to the headline.
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◙ 55tuan Begins Massive Layoffs, Up to 70 Percent (Chinese article)
◙ Citic Securities (Shanghai: 600030) Sale Said to Raise $1.7 Bln, Less Than Sought (English article)
◙ Camelot Information Systems (NYSE: CIS) Revises Outlook for Q3 and Full-Year (PRNewswire)
◙ Suntech (NYSE: STP) Sees China Gaining From Falling Solar Prices (English article)
◙ Nobuyuki Idei Joins Lenovo (HKEx: 992) Board of Directors (Businesswire)
China Offers Up Premier IPOs to Revive Markets 大企业沪港上市 政府借机重燃沪港生机
Despite one of the worst IPO markets in the last 2 years, we’re seeing a sudden spurt of major Chinese state-run firms suddenly rush to make new listings in Shanghai and Hong Kong, in what looks like a behind-the-scenes campaign by Beijing to try and halt a recent skid in its stock markets. In the latest development of this new mega-IPO parade, Sinohydra Group, the nation’s biggest hydropower company and builder of the 3 Gorges Dam, is planning to raise $2.6 billion in a Shanghai IPO (English article); and China Communications Construction, a leading construction firm, is planning to raise $3.1 billion, also in a Shanghai offering. (English article) News of these two mega-offerings follows similar announcements last week by Shanghai-listed CITIC Securities (Shanghai: 600030), China’s largest brokerage, and Sany Heavy Industry (Shanghai: 600031), a top maker of industrial equipment, which said they planned to make Hong Kong IPOs worth $2 billion and $3.3 billion, respectively. Some quick math will show that these 4 offerings combined would suddenly flood Shanghai and Hong Kong with more than $10 billion in new shares, drawing away investment dollars from other firms in an already weak market. But at the same time, the offering of 4 such premier names all around the same time looks very suspicious to me, as all should be very attractive to investors. That leads me to suspect that this exercise and its timing is being quietly orchestrated by central government and stock market officials in a carefully choreographed plan to try and breathe some life back into these two sputtering markets, especially a Shanghai market that is trading near its 52-week low and has lost nearly a quarter of its value from its peak earlier this year. I have to applaud Beijing for its effort to try and bring back some excitement to the market, and also note that this kind of campaign could only happen in China, where many top firms still take their cues from Beijing. I would look for these attractive offerings to give the markets a short boost, but the downward trend will quickly come back unless global markets start to show some new life soon.
Bottom line: Beijing’s new campaign to bring some of its premier companies to market with new IPOs could provide a short lift for the sputtering Hong Kong and Shanghai markets.
尽管IPO市场处两年来最遭时期，但近来中国国有大型企业突然爆发，积极准备沪、港上市，看起来似乎是政府想要幕後使力，竭力想阻止股市下滑。比如，近来中国头号水电企业–中国水利水电拟A股IPO，计划募资26亿美元；中国交通建设亦计划通过上海上市，募资31亿美元。另外，中国头号券商–中信证券<600030.SS>上周宣布宣布H股上市，计划募资20亿美元；中国工程机械制造公司–三一重工拟H股IPO，募资33亿美元。综合四起IPO，你会发现沪、港两市会突然涌出超100亿美元的新股，在市场本已非常疲软的情况下，吸引走其他企业的投资。但同时，四家超大企业约同时进行IPO看起来令人生疑，四起IPO对投资者应该都有很大吸引力。这让我怀疑，所有这一切是否都是政府与股市官员刻意安排，为两个持续疲软的市场注入一些生机与活力，尤其是沪综指交投点位接近52周低位，较今年稍早高点缩水近四分之一。政府竭力为市场增添生机，这点我不得不拍手称赞，但要指出的一点是，这种事情只会在中国发生，因很多大国企仍听从政府的指挥。这些企业上市短期会提振股市，但是，全球市场如不重现生机，那麽沪港两市很快会回归颓势。
一句话：中国政府推动其金牌大企业上市，可能为疲软不堪的沪港股市提供短期支撑。
Related postings 相关文章:
◙ Tidbits: Sany Heavy, Yingli, WineNice
◙ CITIC Securities $2 Bln IPO Looks Good, With Potential to Jumpstart HK 中信证券香港IPO值得期待
◙ Securities Regulator Seizes on US Confidence Crisis 中国证监会或介入企业海外上市
CITIC Securities $2 Bln IPO Looks Good, With Potential to Jumpstart HK 中信证券香港IPO值得期待
Despite a frosty environment for new initial public offerings, China’s largest brokerage CITIC Securities (Shanghai: 600030) has announced its moving ahead with a planned IPO worth nearly $2 billion, in what looks like a good bet to breathe some new life into an otherwise moribund market. (English article) CITIC Securities, whose shares have been listed in Shanghai since 2003, is taking an interesting gamble with this offering, and the timing looks particularly curious since the Hong Kong market is down more than 10 percent since the last mega-offering when Prada (HKEx: 1913) listed its shares in June. I suspect the Chinese government has quietly pushed CITIC to go ahead with this deal, as a successful offering could potentially breathe new life not only into Hong Kong, but also into the sputtering Shanghai stock market, which has lost a comparable amount since June. In my view, CITIC Securities represents one of the strongest bets you’ll see for China’s the financial sector, which can always get investors excited due to the nation’s huge growth potential. It’s the premier name among Chinese brokerages which are generally commercially driven, unlike banks that take their cues from the government. What’s more, Chinese brokerages also work as investment banks, giving them nice exposure to a sizable Chinese IPO and bond underwriting market off-limits to foreigners. CITIC Securities now trades at a healthy 15 times this year’s earnings, which is about the industry average. All that said, barring a major sell-off in Hong Kong or Shanghai, I would expect to see this offering do nicely when it debuts in October, possibly giving a small kick to the sputtering Hong Kong and Chinese markets.
Bottom line: CITIC Securities will offer international investors a strong window into China’s brokerage sector, and is likely to see strong demand for its October IPO.
尽管当前新股发行环境严峻，中信证券仍宣布推进在香港规模近20亿美元的首次公开发行（IPO）计划，这或许能为死气沉沉的市场注入些许活力。中信证券2003年就已在A股挂牌，此次香港招股时机有点令人费解，毕竟港股大盘自6月Prada大宗IPO以来已跌逾10%。我推测，可能是中国政府暗中推动中信证券IPO，因为若其招股案成功，不仅能为港股注入新的生机，可能也有助於提振A股，A股6月以来也跌幅惨重。我认为，中信证券是押注中国金融业的一个机会，由於中国经济增长潜力巨大，其金融业也总是能让投资者感到兴奋。中信证券是中国券商中的佼佼者，有别于那些唯行政指引是瞻的银行，中信证券整体上是受商业因素驱动。此外，中国券商也扮演投资银行的角色，因此能受益於中国企业招股活动，以及债券承销业务。中信证券市盈率为15倍，处於健康水准，与行业平均水平相仿。因此除非港股或A股出现沉重跌势，否则中信证券10月在港股挂牌应有不俗表现，或许还能稍稍提振港股和A股。
一句话：中信证券IPO，是国际投资者投资中国券商行业的良机，其10月IPO可能吸引旺盛需求。
Related postings 相关文章:
◙ ICBC Discovers China’s Latest Low-Cost Export: Currency 工行将从非洲人民币结算业务中获益
◙ Record Profits Bolster Banks as Storm Looms 创纪录利润有助银行抵御楼市低迷隐忧
◙ China Merchants Bank Kicks Off “Capital Raising II” 招商银行掀起第二轮融资热潮
