Smaller Chinese Brokerages Make Dash for A-share Listings

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2022 has seen an increase in the number of smaller-scale Chinese brokerages seeking to shore up their capital via listings as A-shares on the Shanghai and Shenzhen bourses.

On 5 July two Chinese brokerages released the prospectuses for their A-share initial public offerings (IPO’s) – Huabao Securities (华宝证券) and Kaiyuan Securities (开源证券).

Huabao plans to issue up to 1.333 billion shares on the Shanghai Stock Exchange, accounting for up to 25% of equity post-issuance. All funds raised will be used to increase the company’s capital and support business development, including expansion of the investment banking team as well as the scope of credit operations.

Kaiyuan plans to issue up to 1.153 billion shares via the Shenzhen Stock Exchange, accounting for up to 20% of the company’s equity post-issuance. Fund raised will be used to “optimise and upgrade traditional management operations and raise investment bank operating strength,” as well as for investment in asset management operations, IT and digital service capability.

The release of the two prospectuses arrives following a wave of IPO applications by Chinese brokerages since the start of 2022, which has included Dongguan Securities (东莞证券) and Xinda Securities (信达证券) – both of which have passed the review board; Caixin Securities (财信证券), whose application is currently under review, as well as Bohai Securities (渤海证券) and Shouchuang Securities (首创证券), whose application statuses are still subject to update.