The gong at the Hong Kong Stock Exchange has been polished and ready, yet Capital Securities Corporation Limited shows no urgency to strike it. More than 100 days have passed since the company passed the HKEX hearing for its H-share listing, but the roadshow and pricing process have yet to commence. Meanwhile, another financing channel has run its full course: on September 19, Capital Securities announced that an 8 billion yuan corporate bond registration had received approval from the China Securities Regulatory Commission (CSRC), marking the largest single approved scale in the company's history.

On one side, equity financing sits on hold as the company waits for a suitable market window; on the other, bond quotas are being secured in bulk to replenish working capital. This contrast between slow and fast reflects the delicate balancing act this mid-sized securities firm faces between business expansion and capital constraints.

The 8 Billion Yuan Bond: Three Key Numbers Behind One Approval

The approval process for this 8 billion yuan corporate bond moved at a brisk pace. The board passed the issuance proposal on June 2, the Shanghai Stock Exchange bond information platform accepted the filing on July 30, and the approval letter arrived on September 18, covering the entire process in just over three months. Three numbers in this issuance deserve particular attention.

The first number: 8 billion yuan stands as the highest single approved registration quota across all bond categories since Capital Securities' founding. The previous record was held by the 5 billion yuan perpetual subordinated bond issued in December 2025. To clarify the scope here, this figure refers to the quota approved by the CSRC, representing the issuance ceiling rather than funds already raised. The company can issue in tranches within the approval's validity period, and the quota need not be fully utilized.

The second number: approximately 20.5 billion yuan in registered quotas have been approved over the past 13 months. Chronologically by registration effective date: a 3 billion yuan corporate bond and a 1.5 billion yuan subordinated bond in August 2025, a 5 billion yuan perpetual subordinated bond in December, a 3 billion yuan short-term corporate bond in January 2026, and now this 8 billion yuan issuance. There can be a considerable gap between approved quotas and actual funds received. For example, the 3 billion yuan corporate bond registered in August 2025 allowed for phased issuance within the validity period, but the first tranche did not materialize until April 27, 2026, with an actual issuance of 500 million yuan, utilizing less than 20 percent of the quota. However, the two-year validity period has not yet expired, so further issuances remain possible.

The third number: 20.5 billion divided by 15.846 billion equals approximately 1.29 times. The 15.846 billion yuan figure represents the company's attributable net assets as of the end of June 2026. The registered quotas accumulated over 13 months amount to 1.29 times its net asset base. Looking at just the 8 billion yuan tranche alone, it equals 3.16 times the company's total operating revenue of 2.528 billion yuan for the full year 2025. For a mid-sized securities firm with total assets of 63.309 billion yuan at the end of June 2026, these numbers paint a striking picture.

Within the industry, however, this is not particularly exceptional. Data from Flush iFinD shows that as of September 14, 75 securities firms had issued a cumulative 1.64 trillion yuan in domestic bonds this year, a 46.43 percent year-on-year increase. This growth rate has accelerated rather than slowed, building on the already high base of 1.91 trillion yuan in 2025. According to Lianhe Credit Ratings statistics, the top ten securities firms captured nearly 60 percent of financing shares. The lead underwriter and bookrunner for Capital Securities' 8 billion yuan bond issue is Caidia Securities (SH: 600906), a Hebei provincial securities firm headquartered in Shijiazhuang. In recent years, Capital Securities' corporate bonds, subordinated bonds, short-term financing notes, and private bonds have almost all been underwritten by Caidia Securities; conversely, when Caidia Securities issues its own bonds, Capital Securities appears in the lead underwriter or bookrunner lists as well.

Rapid Business Expansion Outpaces Internal Capital Accumulation

Behind the aggressive pursuit of bond quotas lies a capital arrangement designed to match Capital Securities' business expansion pace. In the first half of 2026, the company reported operating revenue of 1.544 billion yuan, up 20.25 percent year-on-year, with attributable net profit of 672 million yuan, up 37.01 percent. The weighted average return on equity reached 4.74 percent, improving 1.14 percentage points from the same period last year, with earnings per share of 0.24 yuan.

All four major business segments posted year-on-year revenue growth: investment-related business (proprietary trading) generated 916 million yuan, up 11.87 percent, accounting for 59.34 percent of operating revenue, including fixed income investment and trading of 552 million yuan, equity securities investment of 238 million yuan, and alternative investments of 126 million yuan; wealth management business grew 39.2 percent to 307 million yuan, expanding at a similarly rapid pace; asset management business grew 2.14 percent to 259 million yuan; and investment banking business grew 24.81 percent to 110 million yuan. Margin financing and securities lending growth was particularly notable, with the period-end balance reaching 4.646 billion yuan, up 61.1 percent year-on-year, while client trading volume, fund distribution, and investment advisory services all rose in tandem.

The flip side of rapid business expansion is continuous capital consumption, with multiple liquidity and risk control indicators showing marked declines. This is the core driver behind the company's sustained push for bond financing. As of the end of June 2026, Capital Securities' liquidity coverage ratio fell from 688.58 percent at year-end 2025 to 329.46 percent, nearly halving; the net stable funding ratio dropped from 174.8 percent to 158.73 percent; and the capital leverage ratio declined from 23.46 percent to 21.79 percent. Pressure on cash flow is equally evident. In the first half of 2026, net cash flow from operating activities stood at negative 1.599 billion yuan, compared with negative 383 million yuan in the same period last year, indicating significantly widened cash outflows.

Securities firms' proprietary trading and margin financing are quintessential capital-intensive businesses. Margin financing involves lending funds or securities to clients, requiring the use of proprietary capital and risk capital provisions; proprietary trading in stocks and bonds requires positions to consume net capital based on asset risk weights, and market volatility can generate unrealized losses that further erode capital buffers. Although all capital indicators remain significantly above regulatory minimums, providing a relatively solid capital safety cushion, the company is in a phase of rapid business expansion where capital consumption outpaces the internal capital accumulation generated by retained earnings, meaning future capital replenishment pressure will gradually mount. The 8 billion yuan ordinary corporate bond approved for Capital Securities is conventional debt that cannot bolster net capital. Proceeds are primarily designated for repaying maturing debt and supplementing working capital, used to replace existing high-cost liabilities and extend debt duration, providing funding ammunition for proprietary trading and margin financing operations. However, bond financing has inherent limitations: whether ordinary corporate bonds or subordinated bonds, they are ultimately debt obligations requiring principal and interest repayment at maturity, carrying mandatory redemption pressure. Subordinated and perpetual subordinated bonds can only supplement supplementary net capital, and regulatory caps exist on the use of supplementary capital, which cannot replace core net capital. To unlock the long-term ceiling for capital-intensive businesses, equity financing remains essential, which is the underlying logic driving Capital Securities' determination to pursue its H-share IPO.

103 Days: The 14th A+H Ticket Remains Out of Reach

While domestic bond financing continues to land, the long-prepared H-share IPO project has now passed the HKEX hearing for over 100 days without launching its global roadshow and bookbuilding. Earlier, the H-share IPO timeline had progressed quite rapidly: officially announced on July 25, 2025; receiving Beijing SASAC approval on August 27; submitting the application to HKEX on October 16; receiving the CSRC's overseas issuance filing notice on April 17, 2026; passing the listing committee hearing on June 11; and receiving the approval letter the following day. The entire approval process was completed in under a year. CITIC Securities (SH: 600030), China Galaxy International, CITIC CLSA International, and BOCI served as joint sponsors for this route.

However, from June 11 to September 22, 103 calendar days and 71 trading days have elapsed, and the H-shares remain unlisted. According to HKEX statistics, the median number of business days between passing the listing committee hearing and formal listing for the 12 months through July 31, 2026, was 18 business days. Seventy-one versus eighteen, a nearly fourfold difference, and the cornerstone investor list has still not been announced. When questioned about progress on interactive platforms, the company has not provided definitive answers. According to the shareholder meeting resolution, the H-share offer price cannot fall below the latest audited attributable net assets per share at period end. Capital Securities' net assets per share stood at 5.07 yuan at the end of the first half of 2026; as of the September 22 close, its A-shares traded at 14.53 yuan per share, giving a total market value of 39.715 billion yuan and a corresponding price-to-book ratio of 2.87 times.

The same company, with identical dividend and voting rights, commands a price of 2.87 times net assets in one market, while the other market's floor price is merely 1 times. Even at the floor price based on net assets per share of 5.07 yuan, the discount to the A-share close would be approximately 65 percent. Among the 13 securities firms that have already achieved A+H dual listings, the average H-share discount range is between 30 and 40 percent. Capital Securities' potential discount is significantly wider than industry peers.

Shen Meng, director of Chanson Capital, noted that for mainland enterprises seeking Hong Kong listings, failure to complete an IPO typically stems from two reasons: either obstacles exist in the mainland regulatory filing process, where even after filing, window guidance may slow progress; or market investor participation enthusiasm is insufficient. Both reasons ultimately point to the enterprise's own qualifications lacking sufficient appeal. For state-backed listed companies, H-share pricing faces multiple constraints: on one hand, issuing new shares causes passive dilution of existing A-share shareholders' stakes, and a large A-H discount would exert downward pressure on A-share secondary market valuations; on the other hand, state shareholders impose strict requirements on pricing reasonableness and preservation and appreciation of state-owned assets, making excessively low pricing unacceptable. Yet if pricing is set higher, international institutional investors' subscription appetite weakens, making cornerstone investors even harder to secure.

Hong Kong institutional investors' valuation logic for securities firms places greater emphasis on earnings stability, and with nearly 60 percent of Capital Securities' revenue coming from proprietary investment, its performance volatility profile is relatively pronounced, which may further depress overseas funds' valuation expectations. Historical precedents also keep the market cautious about the difficulty of Capital Securities' H-share issuance. In the case of the previous A+H securities firm listing, Shenwan Hongyuan Group (SZ: 000166), the originally approved H-share issuance of 6.479 billion shares ultimately resulted in only 2.504 billion shares actually issued, with 13 cornerstone investors brought in whose subscriptions accounted for 71.44 percent of the offering. Even with pricing at the bottom of the inquiry range, the shares broke below the issue price on debut, closing down 11.85 percent. At the time, Shenwan Hongyuan executive Chen Xiaosheng bluntly stated: "The current price range is not particularly high, and we did not want to issue an excessively large amount at this price level," capturing the valuation dilemma common to all A+H securities firm H-share issuances. In Capital Securities' current valuation environment, the challenges of pricing and securing cornerstone investors are even more formidable.

Two paths for capital replenishment, one slow and one fast, one debt and one equity. The 8 billion yuan corporate bond registration approval signals an expansion of Capital Securities' "debt ammunition depot," while the unresolved H-share IPO tests the company's comprehensive ability to navigate market windows, valuation negotiations, and overseas institutional communications. How this mid-sized securities firm balances business expansion, capital constraints, and shareholder interests, along with the pace of subsequent bond issuances and the timing of the H-share IPO, merits continued attention.