Some people may laugh at those who still choose to invest: why invest? What is the future of such a company?
But what if this company is Huawei?
On September 1 1, Huawei, the largest private enterprise and communication giant in China, disclosed the prospectus of medium-term notes, indicating that the company sought to issue public bonds in China for the first time. The first phase and the second phase are 3 billion yuan each, which are underwritten by ICBC and China Construction Bank respectively.
Huawei, which is "not bad money", why should it issue bonds publicly?
On September 1 1, the registration system of debt financing instruments for non-financial enterprises from China Association of Interbank Market Dealers showed that Huawei Investment Holding Co., Ltd. (referred to as "Huawei") submitted the registration materials for the first and second medium-term notes of 20 19, and issued bonds for the first time in China.
According to the registration materials of 20 19 Phase I and Phase II medium-term notes submitted by Huawei, the issuance scale of both phases is 3 billion yuan, and the term is 3 years; The lead underwriter of the first phase is ICBC, and the lead underwriter of the second phase is China Construction Bank.
According to the relevant data of the prospectus submitted by Huawei, in the first half of 20 16-20 18 and 20 19, Huawei's consolidated revenue was 5180.68 million yuan, 5,984.8 million yuan and 715/kloc-0 respectively. They increased by 365,438+0.58%, 65,438+05.52%, 65,438+09.50% and 22.86% respectively, and the compound annual growth rate from 2065,438+06 to 2065,438+08 reached 65,438+07.
Huawei stated in the instruction manual that the medium-term notes will be issued at face value for domestic qualified institutional investors, and the issuance rate will be determined by centralized bookkeeping and centralized placement. United Credit Rating Co., Ltd. rated the bond letter AAA/AAA.
What is the AAA level? This means that in the eyes of financial institutions, Huawei's solvency is extremely strong, basically unaffected by the adverse economic environment, and the risk of default is extremely low.
UniCredit also listed seven advantages of Huawei. For example, in the communication industry, it has a complete and end-to-end product line and integrated solutions, and has built significant competition barriers and scale advantages in basic research, patent scale, underlying technical support, 5G technology and standard formulation, which has significant scale benefits and customer resource advantages.
Huawei clearly holds 720 billion yuan, why should it issue bonds? For Huawei's initiatives, industry experts also analyzed Huawei's bond issuance behavior.
One guess is that Huawei's purpose is to raise interest rates. The prospectus shows that Huawei's financing cost is not high. Among the secured loans, by the end of 20 18, RMB loans accounted for the highest proportion, and the interest rate was between 4.4 1%-4.90%, while the benchmark interest rate for 1-5 years before LPR was implemented was 4.75%. In contrast, in September 1 1 day, the yield of three-year medium-term notes (AAA) was 3.39%.
For this fundraising, Huawei also released the official response 1 1 on the evening of September 6. They said that the funds needed for Huawei's operation mainly come from the enterprise's own business accumulation and external financing, mainly from the enterprise's own business accumulation (about 90% in the last five years), supplemented by external financing (about 10% in the last five years).
"Huawei has always insisted on continuously optimizing the capital structure through reasonable financing layout to ensure the company's financial stability. The domestic bond market is developing rapidly, and the current market capacity is the second in the world. Bond financing has become one of the important financing channels. The company will open the domestic bond market by issuing domestic bonds, which will further enrich the financing channels and optimize the overall financing layout. "
If this sentence is translated, Huawei is actually doing this for a rainy day, so that it can take another road in the future. Huawei's big move has fallen on the head of the whole industry and has to be said to be brilliant.
Weibo user Houchangcun Science and Technology Review said that by issuing bonds, enterprises can make full use of the financing environment with low interest rates, achieve long-term mismatch and maintain a certain leverage ratio, thus improving the overall capital utilization efficiency. Many projects that have invested in this kind of financing can use debt financing to save their own funds for other projects. Through a series of financing behaviors, we can also maintain good relations with market financial institutions, paving the way for further financing in the future.
The issuance of Huawei bonds always raises some doubts about Huawei's internal situation. Under the current constraints and obstacles, is Huawei okay?
In response to such doubts, while issuing bonds, Huawei also made the latest information of the company widely public.
By the end of 20 18, the operating income of Huawei's enterprise business was 74.75 billion yuan, up 23.64% year-on-year, accounting for10.45% of the total operating income; Gross profit was 29.662 billion yuan, up 19. 16% year-on-year. But by the end of June, 2065438+2009, the proportion of Huawei's business income had dropped from 10.45% to 7.96%.
The gross profit margin that has received much attention also has clear data. According to Huawei's information, except for enterprise business, the gross profit margin of operator business and consumer business has increased steadily. In the first half of 20 19, the gross profit margins of operators, enterprises and consumers were 54%, 43% and 30.24% respectively.
In addition, according to the financial data disclosed by Huawei official website, from 20 15 to 20 18, the cash flow generated by Huawei's operating activities was 52.3 billion yuan, 49.2.1800 million yuan, 96.336 billion yuan and 74.659 billion yuan respectively. However, the net cash flow from operating activities in 20 18 decreased by 2167,700 yuan compared with that in 20 17, with a decrease rate of 22.50%, mainly due to the increase in R&D investment and the appropriate increase in inventory in 20 18.
Some insiders joked that "20 billion lottery tickets (the quota is too small) are not enough for domestic financial institutions. When I issued 654.38+000 billion real estate corporate bonds, my eyes didn't blink. "
Some insiders also believe that after Huawei participates in the domestic capital market, it will "show off" its balance sheet strength and create space for further cooperation with domestic financial institutions.