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Introduction: The announcement shows that according to its own development needs, Haier Jinying plans to reduce its holdings of the company's A shares by no more than 106 million shares within three months after the end of three trading days from the date of disclosure of the announcement, that is, from August 15, 2024 to November 14, 2024.

Haier Group (Qingdao) Jinying Holding Co., Ltd. (hereinafter referred to as "Haier Jinying") will reduce its holdings of shares in China International Capital Corporation Limited (hereinafter referred to as "CICC") and plans to liquidate its holdings of CICC A shares, with an expected cash out of more than 3 billion yuan.

Prior to this, Haier Jinying had reduced its holdings in CICC several times, with the total amount of cash out exceeding 10 billion yuan.

On August 9, CICC issued an announcement on the reduction of shareholders' holdings. The announcement showed that Haier Jinying planned to reduce its holdings of no more than 106 million A shares of the company within three months after the end of three trading days from the date of disclosure of the announcement, that is, from August 15, 2024 to November 14, 2024, according to its own development needs.

If the upper limit is reached, Haier Jinying will no longer hold any shares of CICC. Haier Jinying said that the main reason for the reduction was to meet its own development needs.

Haier Jinying's clearance-style share reduction caused CICC's share price to fall on August 12, falling 2.93% by the end of the day.

The total cash out was nearly 10.434 billion yuan

Industry insiders analyzed that Haier Jinying's reduction of holdings may be due to a variety of factors. On the one hand, it may be to optimize its own asset allocation and realize the return of funds for the development or investment of other business areas. On the other hand, it may also be a comprehensive judgment of the current market situation and the development prospects of CICC.

On April 11, 2018, Central Huijin publicly listed the transfer of its 398.5 million domestic shares in CICC (approximately 9.5% of CICC’s total share capital) on the Beijing Financial Assets Exchange. The valuation was 5.05 billion yuan, the listing price was 5.412 billion yuan, and a one-time payment was required.

At that time, CICC was preparing for its A-share listing, so the market paid close attention to who would get the shares. On June 7, 2018, CICC said that Central Huijin had signed a share transfer agreement with Haier Jinying on June 6, intending to transfer 398.5 million shares of CICC to Haier Jinying at a price of 5.412 billion yuan.

After the above-mentioned share transfer was completed, Haier Jinying became the second largest shareholder of CICC, holding 9.5% of the shares. As CICC later listed on the A-share market, Haier Jinying's shareholding ratio dropped to 8.26%.

In June 2022, CICC announced that Haier Jinying planned to reduce its holdings of no more than 135 million A shares of the company through block trading. In the subsequent reduction, Haier Jinying actually reduced its holdings by 93.55 million shares, cashing out about 3.685 billion yuan. After the reduction, Haier Jinying's shareholding in CICC dropped to 6.32%.

In 2023, Haier Jinying started the second round of share reduction. In August 2023, Haier Jinying reduced its holdings of 96.5442 million A shares of CICC through block trading, accounting for 2% of CICC's total share capital, and cashed out about 3.521 billion yuan.

Compared with the previous two large-scale reductions, the third reduction was smaller in scale. In December last year, Haier Jinying only reduced its holdings of 5.8625 million A shares of CICC through block trading, accounting for 0.12% of CICC's total share capital, cashing out about 212 million yuan. This reduction did not cause much market fluctuations.

In January 2024, Haier Jinying announced its fourth reduction plan, planning to reduce no more than 96.5451 million shares of CICC A shares through block trading. Finally, Haier Jinying completed this reduction in April, with the reduction price ranging from 30.43 yuan to 31.96 yuan per share, and the total cash out was about 3.016 billion yuan.

After the above-mentioned share reductions, Haier Jinying has cashed out a total of nearly 10.434 billion yuan.

Recently, Haier Jinying plans to clear its inventory.

According to CICC's announcement on August 9, Haier Jinying plans to reduce its holdings of no more than 106 million A shares of the company through block trading or centralized bidding transactions from August 15 to November 14, 2024, accounting for 2.1964% of the company's total share capital.

As an important shareholder of CICC, Haier Jinying's reduction of holdings directly affected the stock price trend of CICC. Especially in the context of the overall poor market, this news further amplified the market's pessimistic expectations.

The market is worried that the reduction of holdings by major shareholders will lead to capital outflow and stock price pressure, which will in turn cause investors to vote with their feet. On August 12, the first trading day after the announcement of the liquidation and reduction plan, CICC's stock price fell. However, on August 13, CICC's stock price rebounded and closed up 1.7%.

New Journey of Industrial Investment Bank

Haier Jinying was established in February 2014 with a registered capital and paid-in capital of 11.737 billion yuan. Haier Group is the actual controller of Haier Jinying.

Haier Jinying's main businesses include investment, corporate group finance companies, financial leasing, micro loans, factoring, etc. Haier Jinying mainly controls its subsidiaries as a holding platform, and its main businesses are actually operated by its subsidiaries. As of the end of 2023, Haier Jinying has a total of 3,947 employees on a consolidated basis.

The United Credit Rating report pointed out that in 2023, Haier Jinying's total operating revenue decreased slightly year-on-year after retrospective adjustment. The company added biomedical business and its financial business developed well. The company's disposal of stock assets led to a significant year-on-year increase in investment income.

In 2023, Haier Jinying's total operating revenue was 8.1 billion yuan, a year-on-year decrease of 5.95%. Among them, due to the decline in public epidemic prevention revenue, the revenue of biomedical business fell by 20.37%, the revenue of the financial company decreased slightly, and the revenue of other sectors increased to varying degrees.

In the same year, Haier Jinying completed the major asset reorganization of Haier Bio (688139.SH) and became the controlling shareholder of the latter. In 2024, Haier Jinying promoted the major asset reorganization of Shanghai RAAS (002252.SZ), and the business scope of the big health sector has been expanded.

According to the United Credit Rating report, in terms of the composition of total operating income, Haier Jinying's income is still mainly from financial business. In 2023, the four main financial business income accounted for a total of 61.29%, among which the financial company occupied a major position and was the company's largest source of income; the proportion of biomedical income decreased year-on-year, but its contribution to operating income was still relatively high; other business income mainly came from management fee income of the equity investment segment and income from other subsidiaries. In 2023, the income and proportion of other businesses increased, which was a good supplement to income.

In 2023, Haier Jinying's investment income totaled 3.078 billion yuan, a year-on-year increase of 29.87%, mainly due to the company's disposal of part of its CICC shares during the period.

In fact, in addition to reducing its holdings in CICC, Haier Jinying has also been doing other subtractions in recent years, such as selling QuickPass Payment.

Industry insiders told the 21st Century Business Herald reporter that Haier Jinying's various actions are on the one hand to better focus on its core business, and on the other hand to recover cash.

According to public information, in the first quarter of this year, Haier Jinying's adjusted total operating income increased by 8.51% year-on-year, of which the scale and composition of total operating income did not change much year-on-year. During the same period, as the market conditions recovered and Haier Jinying disposed of part of its shares in CICC, Haier Jinying's investment income and fair value change gains and losses increased year-on-year.

United Credit believes that Haier Jinying has a clear positioning and strategic planning; however, Haier Jinying's future development strategy is greatly influenced by Haier Group's strategy and development situation, and it is also necessary to pay attention to the impact of changes in the external environment such as the macro-economy and industry policies.

Haier Jinying pioneered the "industrial investment banking" model in the industry. Its differentiation lies in being industry-based. It is not limited to providing financial support, but also emphasizes integrating and empowering resources through in-depth industry, so as to achieve value enhancement and sustainable development of enterprises and even related industries.