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    600837   CNE000000CK1

HAITONG SECURITIES CO., LTD.

(600837)
  Report
End-of-day quote Shanghai Stock Exchange  -  2022-09-28
8.580 CNY   -2.72%
08/31Haitong Investment Ireland plc June 2022 Interim Report
AQ
08/30UBS Adjusts Haitong Securities' Price Target to HK$5.40 from HK$5.90, Keeps at Neutral
MT
08/30UBS Adjusts Haitong Securities' Price Target to 12.80 Yuan From 13.50 Yuan, Keeps at Buy
MT
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Big Chinese Broker Faces Probe After State-Owned Coal Miner's Default--Update

11/19/2020 | 07:08am EDT

By Xie Yu and Chong Koh Ping

One of China's largest securities firms is under investigation for suspected market manipulation and its role in the recent debt-related woes of a state-owned coal miner, following a tumultuous week in Chinese credit markets.

Haitong Securities Co., a Shanghai-based brokerage, was singled out late Wednesday by the National Association of Financial Market Institutional Investors, a self-regulating body whose members include state-owned and private-sector banks, brokers, asset managers and other industry players. China's central bank supervises the group.

The association said Haitong and its subsidiaries "are suspected of providing assistance" to Yongcheng Coal & Electricity Holding Group Co., which "issued bonds in violation of regulations."

Haitong is also suspected of manipulating the market for nonfinancial corporate debt in China, the association said, adding that the brokerage could be subject to strict industry sanctions and other actions from relevant authorities.

Haitong's Shanghai-listed shares fell 6.3% on Thursday following the news, while its Hong Kong-listed shares dropped 5.3%. In filings to both exchanges, the securities firm said it would cooperate fully with the investigation and comply with the industry association's requirements for the issuance of debt-financing instruments.

It isn't clear what Haitong did to draw the ire of the industry group. The company is a large underwriter and trader of corporate bonds and was one of 25 firms that handled a recent bond sale by Yongcheng Coal a few weeks before the miner defaulted on other debt. Haitong said it had no comment beyond its statement.

On Thursday evening, the industry association said it also plans to investigate five other firms that were involved in Yongcheng Coal's debt financing, for suspected rule violations. The institutions included three commercial banks that led the company's recent debt sales, a credit-ratings firm and an accounting firm.

Last week, the mining company -- from central China's Henan province -- surprised investors by failing to repay 1 billion yuan, equivalent to $151 million, in a 270-day commercial paper that matured Nov. 10.

The state-owned miner previously had a triple-A rating from a Chinese credit-rating firm and recently raised 1 billion yuan by issuing a three-year bond on Oct. 20.

Before Yongcheng Coal's default, the company transferred its stake in a bank and several chemical businesses to other local state-controlled companies.

The National Association of Financial Market Institutional Investors is also investigating Yongcheng Coal and is looking at whether the company fully disclosed risks about its business to investors ahead of the October bond sale. The firm this week paid investors 32.4 million yuan, or about $4.9 million, in overdue interest and said it is trying to raise money to repay the principal amount that it missed.

Yongcheng Coal's default came a few days after the bond default of a company that owns Brilliance China Automotive Holdings Ltd., the joint-venture partner of BMW AG in China. Another bond default this past weekend by state-backed chip maker Tsinghua Unigroup Co. has added to investor unease and led to price declines in some corporate bonds considered to be riskier. Yields on some triple-A-rated bonds and short-term debt have recently risen following Yongcheng Coal's default and as investors worry about waning local government support for large companies.

Haitong, which was founded in 1988, is one of China's top brokerage firms with businesses spanning securities trading, asset management and investment banking. It has helped numerous companies raise funds from capital markets via stock and debt sales. Haitong had total assets of more than 680 billion yuan at the end of June 2020, according to its website.

The firm is a major player in the Chinese bond market. In the year to date period, Haitong underwrote 459.7 billion yuan, or the equivalent of $69.8 billion, worth of bonds and ranked fifth among Chinese securities firms with a market share of 5.3%, according to Wind.

Yang Hao, a fixed-income analyst from Nanjing Securities Co., said he views the industry association's move as an attempt to reassure investors that authorities are taking steps to help maintain orderly markets. He added that the self-regulatory body has limited enforcement powers and any major action -- if wrongdoing is found -- would have to be taken by the China Securities Regulatory Commission.

Write to Xie Yu at Yu.Xie@wsj.com and Chong Koh Ping at chong.kohping@wsj.com

(END) Dow Jones Newswires

11-19-20 0707ET

Stocks mentioned in the article
ChangeLast1st jan.
BMW AG 0.71% 69.62 Delayed Quote.-21.88%
BRILLIANCE CHINA AUTOMOTIVE HOLDINGS LIMITED 3.55% 7.3 Delayed Quote.3.40%
CHINA AUTOMOTIVE SYSTEMS, INC. -0.74% 4.03 Delayed Quote.50.37%
HAITONG SECURITIES CO., LTD. -2.72% 8.58 End-of-day quote.-30.02%
NANJING SECURITIES CO., LTD. -1.16% 7.7 End-of-day quote.-22.30%
UNITED STATES DOLLAR (B) / CHINESE YUAN IN HONG KONG (USD/CNH) 0.15% 7.10087 Delayed Quote.11.55%
All news about HAITONG SECURITIES CO., LTD.
08/31Haitong Investment Ireland plc June 2022 Interim Report
AQ
08/30UBS Adjusts Haitong Securities' Price Target to HK$5.40 from HK$5.90, Keeps at Neutral
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Analyst Recommendations on HAITONG SECURITIES CO., LTD.
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Financials
Sales 2022 36 285 M 5 096 M 5 096 M
Net income 2022 9 958 M 1 398 M 1 398 M
Net Debt 2022 88 507 M 12 430 M 12 430 M
P/E ratio 2022 11,4x
Yield 2022 2,83%
Capitalization 95 641 M 13 432 M 13 432 M
EV / Sales 2022 5,08x
EV / Sales 2023 4,30x
Nbr of Employees -
Free-Float 68,7%
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Mean consensus HOLD
Number of Analysts 13
Last Close Price 8,58 CNY
Average target price 9,59 CNY
Spread / Average Target 11,7%
EPS Revisions
Managers and Directors
Jun Li General Manager & Executive Director
Xin Jun Zhang Chief Financial Officer
Jie Zhou Chairman & General Manager
Jian Ping Tong Chairman-Supervisory Board
Yu Xing Mao Chief Information Officer
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