Ge Long Hui·2025-12-18 02:37Core Viewpoint - Citigroup's research report indicates that China International Capital Corporation (CICC) plans to merge with Dongxing Securities and Cinda Securities through a share exchange method, which is expected to have a positive market reaction despite some dilution in earnings and net asset value [1] Group 1: Merger Details - CICC intends to issue nearly 3.1 billion A-shares, with each Dongxing A-share convertible into 0.4373 CICC A-shares and each Cinda A-share convertible into 0.5188 CICC A-shares [1] Group 2: Financial Impact - The merger is projected to dilute CICC's earnings per share and net asset value by 21% and 13% respectively for the fiscal year 2026 [1] Group 3: Strategic Benefits - The merger is expected to alleviate CICC's capital constraints, expand market share, create synergies, and enhance the opportunity to become a large brokerage firm, benefiting from potential capital relaxation and new business pilot programs [1] Group 4: Market Outlook - Citigroup anticipates that the acceleration of supply-side reforms will lead to an increase in stock prices of other brokerages, potentially stabilizing fee rates and improving the return on equity (ROE) for shareholders [1]