(Image source: Visual China)
Bohai Securities Co., Ltd. (hereinafter referred to as "Bohai Securities"), which is in the IPO stage, will have part of its shares subject to judicial auction.
The Blue Whale financial reporter paid attention to the fact that the 167 million shares of Bohai Securities held by Tianjin Haowu Jiade Automobile Trading Co., Ltd. (hereinafter referred to as "Haowu Jiade") will be auctioned on January 29, 2024, with a starting price of 423 million yuan, which is a seven-fold discount compared with the appraisal price of 604 million yuan. In addition, the 167 million shares of Bohai Securities held by Tianjin Tianwu Electromechanical Trade Development Co., Ltd. (hereinafter referred to as "Tianwu Electromechanical") are also pledged for the 1 billion yuan debt of Tianjin Haowu Electromechanical Automobile Trade Co., Ltd. (hereinafter referred to as "Haowu Electromechanical"), and this part of the equity may also face the possibility of being auctioned.
In terms of equity structure, Tianjin State-owned Assets Supervision and Administration Commission, the actual controller of Bohai Securities, holds 63.28% of the shares through 14 companies, of which 30.51% of the shares have been pledged, and the remaining shareholders have pledged 12.38% of the shares.
Shen Meng, executive director of Xiangsong Capital, pointed out in an interview that if Bohai Securities has a change of shareholders, it will be necessary to remake the IPO application materials and get the signatures of the new shareholders, which may have a certain impact on the pace of the IPO.
The change of equity may affect the pace of listing
The reason for this is that the auction of the equity of Bohai Securities held by Haowu Guardian stems from a pledge contract dispute with the Beijing branch of the Bank of Jiangsu.
According to the judgment document network, in 2018, the Beijing branch of the Bank of Jiangsu provided the highest credit line of 1 billion yuan to Haowu Electromechanical, and the loan type was short-term working capital loan, and the two shareholders of Bohai Securities, Haowu Jiade and Tianwu Electromechanical respectively, provided pledge guarantee for Haowu Electromechanical with their 167 million shares of Bohai Securities shares of 1 billion yuan. Subsequently, Haowu Electromechanical declared bankruptcy and failed to repay the principal and interest of the previous loan.
The Beijing Branch of Bank of Jiangsu filed a lawsuit with the court for the failure of Haowu Electromechanical to repay the principal and interest of the loan, and the failure of Haowu Jiade and Tianwu Electromechanical to perform the corresponding pledge guarantee obligations, requesting the court to rule that they should perform the guarantee obligations.
According to the first-instance judgment, the court ruled that the Beijing Branch of Bank of Jiangsu had the right to discount, auction or sell the 167 million shares of Bohai Securities pledged by Haowu Guardian within the range of 530 million yuan, and receive priority from the proceeds. The same is true for Tianwu Electromechanical. At present, the 167 million shares of Bohai Securities held by Tianwu Electromechanical have not yet appeared on the judicial auction platform
In other words, according to the judgment, Bohai Securities may face a total of 334 million shares of equity auction, which is the key node of Bohai Securities' IPO listing. In addition, among the shareholders of Bohai Securities, 100 million shares, 01 million shares, and 250 million shares held by Qinghai Heyi, Jinjing Glass Shell, and Zhenro Group are also frozen by the court.
Whether the equity auction will have an impact on the IPO of Bohai Securities is the most concerned by the market. Shen Meng, executive director of Xiangsong Capital, said in an interview with Blue Whale Financial Reporter that the auction may cause certain uncertainty about the IPO and affect the pace of the listing schedule, "If there is a change of shareholders, then it is necessary to remake the IPO application materials and get the signature of the new shareholders." "At the same time, the equity auction will not affect the valuation of the IPO issue price, but it will delay the IPO progress due to the change of shareholders.
For the equity auction, Blue Whale Finance contacted the relevant person in charge of Bohai Securities for an interview, but did not receive a reply as of press time.
Bohai Securities' IPO has been running for seven years
Bohai Securities' IPO chase began in 2016 and has been more than seven years since then.
In October 2016, Bohai Securities launched IPO listing counseling, conducted pre-disclosure on December 28, 2021, received feedback from the CSRC on May 20, 2022, and completed the pre-disclosure update on June 6, 2022. On March 1, 2023, the status of Bohai Securities' IPO application was updated to "accepted".
It should be noted that on May 20, 2022, the China Securities Regulatory Commission issued 42 questions to Bohai Securities, including 19 normative questions, 16 information disclosure questions, 6 questions related to financial accounting information and 1 other question. Among them, the proportion of equity pledge of major shareholders of Bohai Securities is too high, and the high dependence on proprietary business and other problems were pointed out.
According to public information, Bohai Securities was established in 2001, the total number of shareholders of the company is 43, the top five shareholders are Tianjin TEDA International Holdings (Group) Co., Ltd. (shareholding ratio of 26.9589%), Tianjin TEDA Co., Ltd. (shareholding ratio of 13.0700%), Shenzhen Overseas Chinese Town Co., Ltd. (shareholding ratio of 9.1431%), Tianjin Bohai State-owned Assets Management Co., Ltd. (shareholding ratio of 6.3420%), Tianjin Free Trade Zone Investment Holding Group Co., Ltd. (6.2211%).
According to the feedback from the China Securities Regulatory Commission, Tianjin SASAC controls 63.28% of the equity of Bohai Securities through 14 enterprises, of which 30.51% of the company's total share capital before issuance has been pledged, and the remaining shareholders hold a total of 36.72% of the shares, of which 12.38% of the company's total share capital before issuance has been pledged.
In other words, at present, up to 42.89% of the equity of Bohai Securities is pledged, which also brings uncertainty to the stability of Bohai Securities' equity structure.
In terms of business, proprietary business has always been an important business line for Bohai Securities to generate income, and it has a high degree of dependence. From 2019 to 2021, the operating income of Bohai Securities' main business lines was 2.805 billion yuan, 3.013 billion yuan and 3.14 billion yuan respectively, and the income from self-operated business was 1.518 billion yuan, 1.711 billion yuan and 1.701 billion yuan respectively, accounting for 54.15%, 54.15% and 54.19% of the revenue respectively, supporting half of the country.
However, the proprietary business of securities companies is greatly affected by the fluctuations of the securities market and investment decisions, and the sustained and stable profitability faces many challenges, and the income structure is single, which is not conducive to long-term healthy operation.
Bohai Securities is also adjusting its business structure, data shows that in 2022, its main business line operating income will be 1.480 billion yuan, and its proprietary business will decline to 211 million yuan, accounting for about 14%, and the proportion of operating income of brokerage business, credit business, investment banking business, entrusted asset management business, alternative investment business, and futures brokerage business will increase.
In terms of profit, from 2019 to 2021, the operating profit of Bohai Securities' main business lines was 1.868 billion yuan, 1.945 billion yuan, and 2.203 billion yuan respectively, maintaining an upward trend. However, in 2022, the operating profit of Bohai Securities' main business lines will drop significantly to 800 million yuan (excluding other and offset items), and the company's net profit will be 501 million yuan, a year-on-year decrease of 72.16%.
In the reshuffle and reshaping of the industry pattern, superimposed on the market environment, the transformation will inevitably have pains, and for the impact of IPO brokers, a complete corporate governance structure, overall operating strength, and market recognition are indispensable.