Wealth curve

Ali shares in CICC and Tencent rush to eat brokers?

Holding 117 million shares of CICC H shares, the 4-day yield is 15.48%, and the shareholding ratio is approaching Tencent
Ali and Tencent are particularly fierce in the Internet finance field. The payment business was Tencent and The focus of the ant gold suit. Today, Alibaba and Tencent’s “AT War” in the financial sector have shown signs of warming up in the securities sector.
On the evening of February 19, according to media reports, Alibaba recently completed its shareholding in CICC, holding approximately 203 million shares of its H shares, accounting for 4.84% of the total share capital.
Prior to this, Tencent Holdings, as a strategic investor of CICC in September 2017, subscribed for the newly issued 207.5 million H shares of CICC.
Ali invested 117 million shares in CITIC, earning 281 million Hong Kong dollars in 4 days
On the evening of February 19, according to media reports, Alibaba Group (BABA) has recently completed the completion of China International Capital Corporation (" CICC's shares, 03908.HK, held approximately 203 million shares of its H shares, accounting for 11.74% of H shares, accounting for 4.84% of the total share capital. This news, the Beijing News reporter has been confirmed from the Alibaba side.
"The two sides have had cooperation for many years." Alibaba said that it hopes to provide innovative and comprehensive products and services to customers through their shareholding in the fields of finance, technology and data.
Regarding the reasons for the increase in the holding of CICC and related plans in the future, Alibaba responded that all the contents of the announcement were subject to the announcement, and CICC did not obtain an effective response.
As for the transaction, as of press time, neither the Hong Kong Stock Exchange nor the US Stock Exchange has disclosed the relevant announcement.
Some insiders speculated that Alibaba's shareholding in CICC will add another technology wing to CICC. It is reported that as early as Tencent became a strategic investor of CICC, CICC stated at the analyst meeting that “in the future we hope to use the technology of both parties to create a new business model and serve customers online. And even identify and acquire customers. This has not been done yet. We certainly hope to use technology and experts to serve consumers, that is, our mass customers. We hope to gain potential efficiency and scale expansion."
The latest disclosure of equity data on the Hong Kong Stock Exchange on the 20th shows that on February 14, AzerbaijanRibba bought 117 million shares of CICC through Alibaba Holdings Limited, Alibaba Group Treasury Co., Ltd. and Des Voeux Investment Company Limited, at a price of HK$15.5 per share. In other words, compared with the 2018 Tencent subscription price of HK$13.8, the Ali subscription price premium was 12.3%.
On the morning of February 20, CICC's share price opened up 10.76% to HK$18.74. Subsequently, CICC's share price fell slightly, and finally closed at 17.90 Hong Kong dollars, closing up 5.79%. This means that, based on the closing price of the day, Alibaba's 117 million shares of CICC, which was added on February 14, have realized a gain of HK$281 million in just 4 trading days, with a yield of 15.48%.
Tencent's advance layout is the second largest shareholder of CICC
In fact, Tencent Holdings (00700.HK) used to be the strategy of CICC as early as September 2017 before Alibaba became a shareholder in CICC. Investors, subscribed for the newly issued 207.5 million H shares of CICC. The transaction was not finalized until March 23, 2018. In the subscription of Tencent Holdings, the net subscription amount of the new shares issued by CICC was approximately HK$2.861 billion, and the subscription price per share was approximately HK$13.80. After the transaction was completed, Tencent Holdings held 12.01% of the total number of H shares issued by CICC, accounting for 4.59% of the total share capital of CICC.
According to official information disclosed by CICC, as of December 31, 2018, the top three shareholders of CICC were Central Huijin Investment Co., Ltd., Tencent Mobility Limited, and TPG Asia V Delaware, L.P. The shareholding ratio is 55.68%, 4.95%, and 4.10%, respectively. After Alibaba won the 4.84% stake in CICC, it directly became the third largest shareholder of CICC.
The semi-annual report issued by CICC in 2018 shows that in the first half of 2018, CICC achieved a total revenue of 8.813 billion yuan, a year-on-year increase of 51.5%; net profit of 1.631 billion yuan, an increase of 46.8%. Under the circumstances that the overall trend of the A-share market is sluggish and the overall business of the securities industry is sluggish, CICC’s leading position remains stable, brokerage business.The income from investment banking business and investment income have increased significantly. Among them, investment income, interest income and brokerage income increased by 84.21%, 51.9% and 46.5% respectively. As of the close of February 20, CICC's Hong Kong stock market value has reached 75.049 billion Hong Kong dollars.
Snatching securities cakes, Alibi was once behind
By joining CICC, Alibaba is constantly filling the shortcomings in the securities sector.
Tencent and Alibaba are undoubtedly the most dazzling forces in the trend of technology companies entering the financial sector. In the comparison of the financial layout of the two sides, Tencent once led the securities field.
In March 2014, Hong Kong's Futu Securities received the A round of investment from Tencent, Jingwei and Sequoia's top international investment institutions. Since then, Tencent has participated in blessings in April 2015 and June 2017, and its shareholding ratio has risen to 38%.
It is understood that Futu Securities is a licensed corporation and a Hong Kong Stock Exchange participant recognized by the Hong Kong Securities and Futures Commission. It holds a Type 1/2/4/9 licence issued by the Hong Kong Securities and Futures Commission and can provide Hong Kong stocks and US stock securities. Account opening and trading services. Under the help of technology and traffic such as Tencent Cloud and QQ in the Tencent system, the trading volume of Futu Securities has risen rapidly. Data show that on April 24, 2015, Futu Securities' monthly transaction volume has exceeded HK$10 billion; as of January 31, 2018, the monthly transaction amount has exceeded HK$90 billion.

In addition to the shareholding of Futu Securities, Tencent has also become the guest of CICC, and became a strategic investor of CICC in September 2017.
Compared with Tencent, Alibaba's layout in the securities field has encountered more twists and turns. In 2015, Ma Yun took the Yunfeng Fund into the Hong Kong brokerage Ruidong Group and later changed its name to “Yunfeng Finance”. Alibaba's Ant Financial Service also stated in 2015 that it would invest in Debon Securities, but it did not make a trip.
In August 2018, Alibaba's layout in the securities field finally ushered in new progress. On August 3, 2018, Huatai Securities (20.000, -0.15, -0.74%) announced that the company issued a total of 1.089 billion shares, raising a total of 14.208 billion yuan. The strategic investors involved in the increase include Alibaba, Suning, etc. . After the completion of the increase, Alibaba (China) Network Technology Co., Ltd. holds 3.25% of Huatai Securities.
With the successful acquisition of CICC, Alibaba's layout in the securities field has been further complemented.
In addition to the securities sector, Alibaba and Tencent's financial licenses in banking, insurance, funds, and third-party payments have also received much attention. Alibaba's financial sector is mainly concentrated in Ant Financial, and Tencent's financial sector is more dispersed.
The competition between the two giants in the Internet finance field was particularly fierce. The payment business was the focus of Tencent and Ant Financial. Analyst's quarterly monitoring report on the third-party payment mobile payment market released on December 27, 2018 shows that in the third quarter of 2018, Alipay's market trading share was 53.71%, and Tencent Financial's current market share was 38.82%.
Today, Alibaba and Tencent’s “AT War” in the financial sector have shown signs of warming up in the securities sector.