In the investment bank “small years”, the IPO excess share underwriting is quite valuable for investment banks, and it has become a major source of income for many investment banks.
Securities Times reporter found that according to the 2018 IPO issuance statistics, 105 listed in the last year.New sharesIn the IPO, the underwriting of IPOs contributed a net income of 519 million yuan to the investment bank. Among them, 10 new shares of the remaining shares underwritten net income has accounted for more than 20% of underwriting sponsorship income, and WuXi PharmaTech's share is as high as 37.77%.
This underwriting, on the other hand, "achieved" the investment banking capital market department and became its unexpected income. “No one ever thought that when the final year-end award was given, the money turned out to be the capital market department,” said the head of the Shenzhen branch of a small investment banking department in South China.
Over-the-counter underwriting income exceeds 500 million
"Because we have fewer IPO projects, the Capital Markets Department has had no revenues before, but last year because the over-the-counter underwriting suddenly contributed 5 million yuan in revenue, so that the entire investment bank looked at us." Recently, the South China Small Investment Bank Shenzhen Branch The person in charge of the company and the reporter joked.
The person in charge said that what they did before the Capital Markets Department was to cooperate with the investment bank project team to carry out stock underwriting and occasionally to help other investment banks distribute some projects for small income generation. However, in 2018, the investment bank was very tight. With only one IPO project in a year, it is very difficult to feed the entire investment bank.
"Nobody ever thought that when the final year-end award was given, the money turned out to be the capital market department." Originally, the investment bank's only single IPO last year, after the end of the subscription, many investors abandoned the purchase, according to the agreement, These abandoned shares require an investment bank underwriting. This underwriting, on the other hand, "achieves" the Capital Markets Department and becomes an unexpected income input, and the scale is not small.
According to the statistics of 105 new shares issued and listed in 2018, each of them has abandoned shares, and the total number of abandoned shares has reached 29,788,700 shares. This means that investment banks as lead underwriters have been underwritten to varying degrees.
Sorted by the number of shares, Industrial Fulian, PICC, Jiangsu Leasing, Tianfeng Securities, Zhengzhou Bank and Great Wall Securities eventually led to the largest number of shares underwritten by the investment bank, which exceeded 1 million shares, reaching 3,333,100 shares. 2,135,000 shares, 1,644,300 shares, 1,151,500 shares, 1,373,800 shares and 1,098,800 shares; the three new shares with the lowest number of shares were Nanjing Julong, Baineng Technology and Maiwei, and the number of shares underwritten due to the abandonment They were 31,300 shares, 33,200 shares and 34,700 shares respectively.
According to the calculation method of new stocks in the market, these underwritten new shares are sold at the average price on the day when the daily limit is opened. The above 105 new shares will contribute a total of 519 million yuan to the investment bank, accounting for 9.40 of the underwriting of 105 new shares. %.
According to the above calculation method, the largest new shares with the largest underwriting revenue last year were Industrial Fulian, which was exclusively underwritten by CICC, and the absolute earnings of the remaining shares were 37.297 million yuan. There are 7 single-share new shares with an absolute return of more than 10 million. In addition to the industrial Fulian, there are also WuXi PharmaTech, Ningde Times, Ruike Laser, Changfei Fiber, Mindray Medical and Yingqu Technology. Absolute returns amounted to 34,760,900 yuan, 16,838,600 yuan, 14.932 million yuan, 12,247,600 yuan, 11,998,900 yuan and 10,532,500 yuan.
The three new shares with a narrow underwriting absolute return are Nanjing Julong, Zhongyuan Home and Nandu Property. According to the calculation method of the above new shares, the absolute returns are 754,500 yuan, 807,900 yuan and 1,053,100 yuan respectively.
Source of investment bankers' bonuses
"To be honest, the previous investment bank did not pay much attention to the IPO over-the-counter underwriting, and felt that this must be done.Company investmentIn the case of the department, the investment bank plays the role of channel introduction. "A listed companyBrokerThe head of the investment bank Shenzhen team said that with the increase in the size of the underwriting sales, the investment banking department also began to pay attention to it.
According to statistics, the underwriting income of 105 new shares in 2018 accounted for 9.40% of the corresponding IPO project underwriting sales, close to 10%.
Among them, there are 39 projects in which the underwriting sales revenue accounts for more than 10% of the underwriting sponsorship fees; more than 20% have 10 projects; more than 30% have 2 projects, respectively, WuXi PharmaTech (37.77%) and Tianfeng Securities (32.95%). Sponsoring the underwriting of WuXi PharmaTech is Huatai United and Guotai Junan, and it is Industrial Securities that sponsors the underwriting of Tianfeng Securities. In other words, in addition to the normal underwriting sponsorship income, these three investment banks have added more than 30% of the underwriting sales income.
According to the reporter's understanding, according to the internal regulations of the securities company, the investment bank originally did not allow direct investment in holding shares.Additional issuanceUnderwriting is accepted by the self-employed department. However, as the IPO underwriting has not been compensated and the profit scale has increased in recent years, many investment banks have begun to fight for corresponding rights internally.
It is reported that the current practice of brokers is: the investment bank directly uses the underwriting sponsorship income as the cost of the IPO's over-the-counter underwriting. Of course, it is still the company's self-operated channel. In the final liquidation, the self-operated department is basically responsible for the operation. The proceeds were all intercepted to the investment bank.
"Now almost every investment bank attaches great importance to this income. Some investment banks with few IPO projects have become the 'fat meat' that the investment banking department is staring at." The person in charge of the Shenzhen branch mentioned above. In the "small years" of the reduction and refinancing of IPO projects, this "fat" has basically become a source of bonus for investment bankers.
(Article source: Securities Times)