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<Research>Citi Estimates CICC's Proposed Shr-Swap Absorption Merger with CINDA SECURITIES to Replenish Capital & Create Synergies
Recommend 11 Positive 16 Negative 5 |
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CICC (03908.HK) has signed a legally binding cooperation agreement with DONGXING SECURITIES (601198.SH) and CINDA SECURITIES (601059.SH), under which CICC plans to proceed with the proposed merger through absorption and share swap, according to Citi's research report. In Citi's opinion, this merger will help CICC replenish its capital, allowing it to catch up with its peers in terms of scale and generate synergies with Dongxing and Cinda Securities, which have solid capital strength and well-developed retail businesses. Although this merger will dilute CICC's shares, Citi expects the market to react positively, indicating that the supply reform of Chinese brokers is accelerating, which may help stabilize rates and improve the return on equity of securities firms over time. Citi prefers CITIC SEC (06030.HK) (600030.SH), CGS (06881.HK) (601881.SH), and DFZQ (03958.HK) (600958.SH). AAStocks Financial News |
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