36 institutions rushed to eat 360 returned to A-share feast Radio and Television Media participated in the investment nearly 300 million yuan

According to a list of "360 Equity Privatization Investment Clients" exclusively obtained by the reporter, there are a total of 36 consortiums and institutions participating in the privatization of 360, and the number of shares involved in subscription reached 72.04%. "The rest of the shares belong to the company's core management. Among them, Zhou Hongyi's shares will reach 22.3%, an increase of 5%, while Qi Xiangdong (360 President) will drop 5.9% to 2.2%." An intermediary person involved in the privatization of 360 told reporters.

Original title: Qihoo 360 privatization "variable" fermentation capital lurks and fears that "riding a tiger is difficult to get down"

hot spot, will it be destroyed?

There have always been two voices in the market about "shell" trading. One believes that backdoor listing is an effective supplement to the listing difficulties caused by the current A-share issuance and review system, while the other believes that this is an unhealthy pricing system in A-shares. An inducement.

What is clear is that a series of rumors have spread one after another, especially the fermentation of the uncertainty of the return of Chinese stocks to A-shares, which is forming a chain reaction in the A-share "shell" trading market.

Behind this chain reaction, what evolution will happen to China Stock Exchange, listed companies, and intermediaries?

On May 13, Liu Li, spokesperson of Qihoo 360 Technology Co., Ltd.(hereinafter referred to as: 360), also told reporters that the company is still promoting privatization according to the scheduled plan, and other matters are temporarily inconvenient to disclose.

According to a list of "360 Equity Privatization Investment Clients" exclusively obtained by the reporter, a total of 36 institutions are rushing to return to the A-share feast, including some A-share companies (excluding three listed financial institutions, and Jiangsu Gaoli is a Hong Kong stock company) lurking among them.

Rumors about the return of China's stock market tightening by regulators are further simmering. Will 360 and the investors lurking in it face a situation of "riding a tiger and having trouble getting down"?

On the evening of May 12, CITIC Guoan issued an announcement stating that the company's board of directors had reviewed and approved the proposals of its two subsidiaries. Previously, these two subsidiaries were expected to invest approximately US$400 million equivalent to RMB in the 360 privatization project.

The list of consortiums implies A-share capital.

According to the above-mentioned foreign investment announcement issued by CITIC Guoan, the company's Tianjin Qixin Zhicheng Technology Co., Ltd. and Tianjin Qixin Tongda Technology Co., Ltd. have completed the registration procedures for industrial and commercial changes related to capital increase.

Previously, CITIC Guoan stated that it had participated in the 360 privatization project through the above two companies, with an investment amount of approximately US$400 million equivalent to RMB. Based on the total privatization price of 360 disclosed later, approximately US$9.3 billion, CITIC Guoan will hold 4.3% of its shares after successful privatization.

According to a list of "360 Equity Privatization Investment Clients" exclusively obtained by the reporter, there are a total of 36 consortiums and institutions participating in the privatization of 360, and the number of shares involved in subscription reached 72.04%.

"The rest of the shares belong to the company's core management. Among them, Zhou Hongyi's shares will reach 22.3%, an increase of 5%, while Qi Xiangdong (360 President) will drop 5.9% to 2.2%." An intermediary person involved in the privatization of 360 told reporters.

The above list shows that excluding the company's management, the institution that participated in the subscription of the largest number of privatized shares in 360 is Tianjin Xinxinsheng Equity Investment Partnership (Limited Partnership)(hereinafter referred to as "Tianjin Xinxinsheng"), with a proportion of 11.44%; followed by Tianjin Xinxin Qiyuan Equity Investment Partnership (Limited Partnership), with a shareholding ratio of 6.2. According to industrial and commercial information, Zhou Hongyi holds absolute shares in both the above two Tianjin companies.

Among the other 34 institutions, banks such as China Construction, China Merchants, and Minsheng held shares ranging from 1.1% to 1.7% respectively; five insurance companies such as Ping An and Sunshine Life maintained their shareholding ratios at 1.1% to 3.7%. In addition, companies under Sequoia Capital and BRICS Silk Road Investment (Shenzhen) LLP each hold 4% shares, ranking as the fifth largest shareholder with 360.

The reporter noticed that there were also many listed companies lurking behind the shareholding list and participating in the 360 privatization project.

In addition to the above-mentioned CITIC Guoan, in December last year, Radio and Television Media stated that it would invest no more than 300 million yuan to subscribe for the "Huarong 360 Special Fund" specially set up by Huarong Securities, and had 61 million yuan to bridge the bridge. Fund,"indirect investment in 360 equity." In the above 360 equity subscription list, Huarong Ruize Investment Management Co., Ltd. is the platform for Huarong Securities to subscribe for the privatization of 360, subscribed a total of 1.2% of the shares, totaling approximately US$111.6 million.

In addition, Aier Ophthalmology indirectly invested in the 360 privatization project by investing US$30.32 million in Tianjin Xinxinsheng; Zhongnan Heavy Industry also participated in this project as a participant through its equity investment fund; in addition, Tianye Co., Ltd. also used self-raised funds to increase capital of more than 600 million yuan to subscribe for the "Tianying Huixin" limited partnership shares and participate in the 360 privatization project.

A relevant person in charge of an organization responsible for finding funds for the privatization of 360 told reporters that the entire privatization process involved an equity payment of more than 30 billion yuan and a loan of about 4 billion US dollars from several banks led by China Merchants Bank. Previously, it was revealed that the price of this loan was used as collateral for 360 Company's headquarters building in Jiuxianqiao, Beijing, and some company shares as assets.

The valuation premium feast faces

a dilemma. Does the relevant announcement issued by CITIC Guoan mean that the 360 privatization project is still proceeding normally as planned? On the same day, 360 spokesperson Liu Li told reporters for 21st Century Business Herald that the company's privatization was continuing.

The above-mentioned 360 privatization project intermediaries said that the original 360 privatization plan has not changed, and all funds have been collected, and the National Development and Reform Commission has also approved it, and is waiting for the approval of the SAFE to exchange foreign exchange.

"The main reason is that the RMB exchange rate is currently experiencing large fluctuations, which is a bit sensitive at this time." The above-mentioned intermediary agency person said.

Previously, many institutions used the valuations of Focus Media, Giant Travel Network and other Chinese stocks after returning to A-shares as samples, and gave a super high valuation to the return of 360.

Based on Focus Media's valuation of 45.7 billion yuan when it returned to A-shares, its valuation at the time of privatization was only less than US$2.7 billion (16.5 billion yuan). After successfully borrowing Qixi Holdings, the stock price rose from 13 yuan to a maximum of 62 yuan after several consecutive daily limits, which further caused the market value of Focus Media to rise.

For this reason, CICC previously reported that if 360 returns to A-shares, its market value will be as high as 380 billion yuan (US$61.3 billion), nearly seven times larger than the valuation of US$9.3 billion at the time of privatization. Based on 360's latest share price of US$67.95, its total market value is only US$8.795 billion.

Outside expectations for the high valuation of 360 may also be related to its future performance expectations. According to SEC (Securities and Exchange Commission) documents, 360 officially predicts that the company's revenue from 2016 to 2018 will be US$3.63 billion, US$4.82 billion and US$6.255 billion respectively; net profit for each year will reach US$490 million, US$760 million and US$1.1 billion respectively.

Shen Meng, executive director of Xiangsong Capital, said that even if the privatization of 360 is successfully completed, it is still unclear whether it can land in A shares. It said,"The original valuation peak of 360 can be referred to the highest P/E ratios of Century Cruises and Qixi Holdings, but now, the key difficulty is not whether it will be high, but whether it can be returned. If I can come back, I think its P/E ratio will still be pushed up because after all, its assets are of high quality."

The nearly US$90 million invested by Tianye Co., Ltd. was self-raised, which subsequently attracted the attention of the Shanghai Stock Exchange and inquired about issues such as fund subscriptions and capital contributions.

Although Tianye subsequently responded to relevant inquiries and stated that the funds would be invested in Tianjin Qixin Zhicheng Co., Ltd., a subsidiary of CITIC Guoan, the investment amount of nearly US$90 million was 5 times the net profit attributable to shareholders of the listed company of 112 million yuan in 2015. And in the first quarter of this year, it lost nearly 7 million yuan. Tianye's investment of US$90 million exceeds its total net profit in the past ten years since 2006.

Some companies also said when interviewed that they did not care whether 360 could eventually return to A shares. Wu Shijun, secretary of the board of directors of Aier Ophthalmology, told reporters that the company's investment was that the privatization of 360 was a good project."360 is a very good IT company with a large user base and a very high degree of compatibility with the company's ophthalmology projects. This is beneficial to the company's strategy and strategy, which has nothing to do with whether it can be listed in A-shares."

Editor: Nancy