Having Survived 30 Years, CITIC Now Thrives

Kong: We hope to use an overall Group listing as an opportunity to enhance synergies, risk control, strategic management and the appropriate allocation of resources at the core of promoting changes to the group management methods.

The first report from the recent central economic work conference mentioned that reform to the shareholding system of large Chinese holding companies would be promoted. This has affected our thinking at CITIC since 2008, and last year we began forming specific ideas about promoting an overall listing.

Caixin: You mentioned internal integration, which is a sensitive issue. Would an overall listing meet resistance from subsidiaries?

Kong: An overall listing wouldn't wipe out the development of our subsidiaries. In fields and industries we want to develop, we certainly need to support their maximum development. But we must weigh the risks. On one hand, we need to strengthen risk control, while on the other we need to strengthen collaboration among our subsidiaries. Share reform and choosing to list may be a historically significant event.

Caixin: Would an overall listing mean you would want to have further equity integration for subsidiaries, such as privatization?

Kong: In November 2008, we privatized Hong Kong-listed CITIC International Financial Holdings and moved it inside CITIC Bank. Privatization and listings are two methods that are best utilized at different stages. From a securities regulatory perspective, if too many subsidiaries are listed, the parent company won't be able to plan well. I can't say now whether we would privatize any specific subsidiary. But if this sort of method is necessary, it can be used.

Many state-owned institutions need large capital injections for share reform and listings. But one of our hopes for an overall listing is that we will be able to pay our own way.