China Equity House: Citic Securities
Strong cross-border capabilities, sound product coverage and a deep understanding of regulators’ priorities allowed Citic Securities to stand out in 2024, navigating a year of shrinking deal volume.
China equity and equity-related deals raised a combined US$58.6bn last year, down 54% from 2023, according to LSEG data, as authorities reduced the pace of A-share IPOs and follow-ons to help support the struggling secondary market, and investor appetite declined for offshore Chinese deals.
Taking advantage of demand for convertible bonds and a surging gold price driven by growing Middle East tensions, Citic, as one of the two leads, helped Chinese miner Zijin Mining Group raise US$2bn from a five-year put-three CB and US$500m from a primary placement.
Hong Kong and Shanghai-listed Zijin had been awaiting regulatory approval for a Rmb10bn (US$1.37bn) A-share CB since late 2022, but Citic leveraged its international capabilities to bridge the gap.
The Chinese bank single-handedly helped state-backed coal company Shandong Energy Group raise US$500m from the sale of an exchangeable blue bond issue with the H-shares of Yankuang Energy Group as the underlying, the first equity-linked bond offering to carry a blue label in Asia Pacific.
A €1.5bn (US$1.56bn) CB of Anta Sports Products demonstrated joint bookrunner Citic’s ability to tailor solutions for clients. The proceeds were used to fund the repurchase of a euro CB and share buybacks, allowing Anta to refinance debt at lower cost and optimise its debt maturity profile.
Citic’s longstanding relationship with Chinese regulators and deep understanding of the markets also allowed it to react quickly to policy changes, such as the economic stimulus measures announced in September.
Riding on the positive market sentiment, Citic, as one of the sponsors, kicked off pre-marketing for China Resources Beverage Holdings’ Hong Kong IPO two days after the stimulus package was announced. The deal drew upbeat demand and was priced at the top of the range at HK$14.50 each to raise HK$5.05bn (US$650m).
Citic’s client base was not confined to traditional sectors. It was the sole sponsor on the HK$1bn Hong Kong IPO of Tencent-backed artificial intelligence drug research firm QuantumPharm, later renamed XtalPi. The company was the first to list in the city under new listing rules for specialist technology companies.
In the domestic market, Citic focused on raising funds for companies from sectors backed by government policies such as semiconductors and new energy. The deals it arranged included a Rmb2.7bn private placement of monocrystalline silicon products maker Hoyuan Green Energy, a Rmb2.3bn private placement of new energy power generator Sichuan New Energy Power and the Rmb1.5bn Shanghai Star IPO of semiconductor maker Wafer Works (Shanghai).
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