This section gives you the common concepts in the trading of Hong Kong stocks: rights issue, rights issue and dividend.
Recently, the refinancing of Hong Kong stocks has once again aroused market concern.
The "refinancing" of Hong Kong stocks can be divided into four forms:Rights issue, placement, consideration issuance and public development售. The rights issue of Hong Kong shares is equivalent to the placement of A shares; the placement of Hong Kong shares is equivalent to the directional additional issuance of A shares; consideration issuance refers to the act of issuing shares using the company's equity as a means of payment; and public offering is the re-issuance of shares by listed companies to the public without directional elements.
CITIC made a statistic that as of June 19 last year, 163Hong Kong companies had launched a total of 181times of refinancing, and 25 listed companies with a market capitalization of more than HK $10 billion were in the process of refinancing. more than 80 per cent of the leading companies choose to refinance through placement, and they are generally public placement.
So, what does a rights issue mean?
I. what is a rights issue
As mentioned above, the "rights issue" of the Hong Kong stock market is in fact roughly similar to the "private placement" of A shares, that is, the issuance of new shares to specific investors. Unlike the complicated examination and approval process of A-share subscription, the rights issue process of Hong Kong shares is more flexible, so it is also more common.
The allotment of shares in the Hong Kong stock market can be divided into two types: the old and the new, and can also be mixed.
Matching the old is actually a targeted reduction of holdings by major shareholders and does not increase the number of shares in the company.
Allotment of new shares is issued by the company, the number of shares increases, after the rights issue will appear dilution effect.
What is more commonly used is the combination fist-the old and then the new rights issue.
Give me a chestnut!
Before$Kaisa beautiful (02168.HK) $The rights issue is issued on an old-to-new basis: the major shareholders sell the shares first, and then the company issues new shares to the major shareholders.
The advantage of this is that through the old-to-new issuance model, the allotment can be listed on the same day when the shares are acquired, without actually a lock-up period.
Similarly, the rights issue can be divided into the high rights issue and the low rights issue, and the high rights issue often leads to a sharp fall in the stock price.
For example, at the beginning of last year$Hong Kong Television (01137.HK) $、$net Dragon (00777.HK) $All raise money through the placement of shares at a discount from the old to the new, which has led to a sharp fall in share prices.
If the rights issue is to continue to expand the business, the expected future earnings will rise, and the share price may also rise. In addition, some allotners are willing to accept the rights issue or predict the good prospects of the company, so they enter the market for capital injection, and some shares rise after the rights issue, depending on the operating conditions of the company as a whole.
II. What is a rights issue
"rights issue" is one of the most commonly used fund-raising methods for listed companies, and the object of fund-raising is for all shareholders. Rights issue is the purchase of the corresponding number of shares according to the number of equity positions in accordance with the rights issue price.
With the previously announced rights issueCathay Pacific Airways (00293.HK) $For example, according to the company announcement, 2503355631 rights issue shares were issued at the subscription price of HK $4.68 on the basis of 7 rights issue shares for every 11 existing shares held on the record date of the rights issue, with a total fund-raising amount of about HK $11.7 billion.
But it is worth noting that listed companies usually issue shares at a discount, and then the share price is bound to adjust downwards.
In detail!
If the listed company currently has 100 million shares in issue, the current share price (the closing price before the exclusion date) is HK $1 per share. The company announced an one-to-10 plan, with a "offering share price" of only HK $0.1, that is, a 90% discount on new shares to raise capital, with a fund-raising target of HK $100 million.
Assuming that all shareholders participate in the rights issue, the company's shares will change from 100 million shares to 1.1 billion shares (100 million old shares + 1 billion new rights issue shares) after the deregulation date. In theory, the share price should be HK $0.182 after the rights are excluded, down 82 per cent from the HK $1 before the rights are excluded.
Of course, the biggest fear is that if shareholders do nothing, the stock on hand will depreciate immediately.
Existing shareholders are not willing to participate in the "rights issue", so they had better sell the shares or sell the "rights issue" as soon as possible, otherwise they will have to watch the price of their shares change from HK $1 to HK $0.182 once the deregulation day has passed.
In addition, when it comes to rights issues, it is naturally easy to think of partnerships. There used to be no lack of companies to confuse small shareholders by constantly partnering and then "rights issues". We need to be more vigilant.
What is a dividend
April 1, 2020$HSBC Holdings PLC (00005.HK) $The surprise announcement, at the request of UK regulators, announced that dividends would be cancelled in the fourth quarter of 2019 and the first three quarters of 2020, while promising not to carry out any share buybacks this year.
Considering that the company did not cancel the dividend payout during the 2008 "financial tsunami", HSBC Holdings PLC's move once spread pessimism in the market, especially the psychological impact on some Hong Kong local investors who "retire with shares". For a long time, the belief in "buying shares to earn interest" collapsed.
So what is the dividend?
Dividend is defined as the interest on stocks, which refers to the income paid to shareholders according to the dividend rate in the after-tax profits of listed companies. Sun Hung Kai Properties's cumulative annual dividend in 2019 was as high as 14.34 billion Hong Kong dollars, making him the king of Hong Kong stock dividends that year.
In fact, there are two main kinds of returns on stock investment: earning dividends and capital gains.
Capital gains are earned by the income difference between the selling price and the purchase price, and the way to earn dividends is to hold them for a long time and wait for the company to pay dividends.
That's all for today's sharing!
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