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Tuesday, March 31, 2020, 23:37
CICC says coronavirus having little impact on plans
By Edith Lu
Tuesday, March 31, 2020, 23:37 By Edith Lu

Investment bank China International Capital Corp (CICC) said on Tuesday the novel coronavirus outbreak was having little impact on its finances as it still has a considerable number of projects underway. 

To further support its development of domestic and overseas businesses, the Hong Kong-listed company is looking to go public in Shanghai. The funds raised will be used to supplement its working capital and to further increase investment in strategic areas such as fintech and internationalization.

“Our investment banking business is running smoothly, as we still can see many A-share initial public offerings and Hong Kong IPOs have been completed successfully in the first quarter of the year,” Greg Chu Gang, chief operating officer of CICC, said when releasing the company’s annual results.

He said the pandemic has had some impact on the operations of the company’s investment banking business, such as new business development, due diligence and project applications. In this way, its clients’ IPO timelines are likely to be delayed depending on market conditions.

As the first China-foreign joint-venture investment bank, CICC’s businesses include investment banking, stock trading, bond trading, asset management and research.

With interest rate cuts in China, many companies are willing to issue bonds, which has boosted CICC’s debt and structured financing business. Meanwhile, its equities business is also seeing growth, as equity market turnover has increased in a volatile market environment.

Chu said the company has done a lot of risk control, hoping to further pursue its international strategy and seize more opportunities during the crisis.

CICC expanded its international footprints vigorously during the global financial crisis in 2008, including setting up new offices and recruiting senior talents overseas. The company hopes to take similar chances this time and strengthen their presence in international financial centers, said CEO Huang Zhaohui. 

To further support its development of domestic and overseas businesses, the Hong Kong-listed company is looking to go public in Shanghai. The funds raised will be used to supplement its working capital and to further increase investment in strategic areas such as fintech and internationalization. It also intends to seize strategic mergers and acquisition opportunities.

“We are now preparing some related documents,” said Huang. “We hope to complete the preparatory work soon so we can take the chance if everything is ready.”

CICC reported on Monday its total revenue and other income sources rose 22.9 percent year-on-year to 22.78 billion yuan in 2019, while net profit reached 4.24 billion yuan (HK$4.63 billion) – up 21.4 percent compared with the year before.

Its traditional franchise investment banking business remained strong, with the company closing 15 A-share IPOs as the sponsor, with an aggregate lead underwriting amount of 65.02 billion yuan. In Hong Kong, it sponsored a total of 16 IPOs with an aggregate underwriting amount of $8.07 billion (HK$62 billion).

edithlu@chinadailyhk.com

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