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<Research>Citi: CICC Plans Shr Swap Merger with Dongxing/ Cinda Securities; Mkt Reaction Expected to Be Positive
Recommend 4 Positive 10 Negative 4 |
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CICC (03908.HK) plans to merge with DONGXING SECURITIES (601198.SH) and CINDA SECURITIES (601059.SH) by way of merger by absorption and a share-for-share exchange, Citi Research issued a research report saying. Although the share swap merger will dilute CICC's EPS/ book value per share (BVPS) by 21%/ 13% each for FY2026, the merger is expected to lift capital restrictions for CICC, create synergies by expanding market share and enhance its chances of becoming a large broker, the broker noted. This could benefit from potential capital relaxation and new business pilot scheme, leading to a positive market reaction. Due to accelerated supply-side reforms, other brokers' stock prices are expected to rise, potentially stabilizing fee rates and boosting potential ROE, Citi Research added. AASTOCKS Financial News Website: www.aastocks.com |
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