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Wednesday, 26 June 2019

China Equity House

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CICC was back to its best in 2016, outclassing its peers when it came to helping Chinese clients cope with volatile markets overseas and unexpected policy changes at home.

China’s oldest investment bank led 36 equity and equity-linked deals for Chinese issuers during the review period to raise a total of US$7.38bn. But it was CICC’s read of market trends and its breadth of business that helped it stand out from the competition.

“This year CICC not only maintained advantages in serving SOEs and large-sized companies, but also made considerable progress in covering small and medium-sized enterprises in high-growth and emerging sectors,” said Wang Sheng, managing director and deputy head of investment banking of CICC.

Domestic financings took on new significance in 2016 as offshore listings slowed, but conditions onshore were far from accommodating after another market rout prompted a slew of regulatory changes.

China replaced its top securities regulator in February, delayed a long-awaited registration-based IPO system and shelved a much-anticipated technology-focused new board. Authorities also clamped down on backdoor listings and stemmed the flow of overseas-listed Chinese companies looking to relist back home.

CICC read the winds of change and adapted quickly, allowing it to deliver deals in a timely manner and help its clients stay ahead of the competition.

As an arranger for the backdoor listing and Rmb5bn (US$724m) share placement of Focus Media, it showed just how important timing could be. Just a month after Focus Media completed its listing, the CSRC suspended its review of relistings from overseas-listed companies in a bid to curb speculation on potential target companies.

CICC also arranged the HK$34.45bn (US$4.44bn) buyout of Hong Kong-listed Dalian Wanda Commercial Property through an innovative financing package. Wanda Commercial is now lining up for a Shanghai IPO, with the help of CICC and China Galaxy Securities.

In the offshore market, CICC played a crucial role on the HK$57.6bn (US$7.4bn) IPO of Postal Savings Bank of China, the world’s largest IPO since 2014. It also arranged the HK$14.7bn float of China Energy Engineering and the HK$15bn listing of China Zheshang Bank.

Its SOE relationships were also on display in the equity-linked market. The bank was one of the bookrunners on the US$500m convertible bond for China Railway Construction Corporation, the first H-share CB in nine years. It also arranged the US$600m H-share CB of CRRC Corp and the Rmb3.35bn CNH-linked and US dollar-settled CB of Kunlun Energy.

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