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the merger between guolian and minsheng has been approved by jiangsu state-owned assets supervision and administration commission!

on the evening of september 3, guolian securities announced that its major asset restructuring, which involves issuing a-shares to purchase 99.26% of minsheng securities and raising matching funds, has been approved in principle by the state-owned assets supervision and administration commission of the jiangsu provincial government. currently, the transaction still needs to be reviewed and approved by the shareholders' meeting and approved, ratified or registered by the competent regulatory authorities.

just recently on august 8, guolian securities released the "report on issuing shares to purchase assets and raising supporting funds and related transactions (draft)", officially announcing that it plans to purchase a total of 99.26% of minsheng securities from 45 counterparties including guolian group and fengquanyu through the issuance of a-shares, and raise supporting funds of no more than 2 billion yuan. the total consideration for this transaction reached 29.492 billion yuan, excluding the amount of supporting funds raised.

approved by jiangsu state-owned assets

according to the announcement, guolian securities received the "approval of the jiangsu provincial state-owned assets supervision and administration commission on the issuance of shares by guolian securities co., ltd. to purchase the assets of minsheng securities co., ltd. and raise matching funds" (su guozi fu [2024] no. 45) issued by the state-owned assets supervision and administration commission of the jiangsu provincial government. the state-owned assets supervision and administration commission of the jiangsu provincial government agreed in principle to the company's asset restructuring and matching financing plan.

guolian securities said that this transaction constitutes a major asset reorganization and a related-party transaction, but does not constitute a reorganization listing. the transaction still needs to be reviewed and approved by the company's general meeting of shareholders, the a-share class general meeting of shareholders and the h-share class general meeting of shareholders, and approved, ratified or registered by the competent regulatory authorities. there is uncertainty as to whether the transaction can obtain the aforementioned approval, ratification or consent to registration and when to obtain it.

according to the announcement released on the evening of august 8, guolian securities intends to purchase 99.26% of minsheng securities held by 45 counterparties including guolian group and fengquanyu through the issuance of a-shares. the total amount of supporting funds raised this time shall not exceed rmb 2 billion, and the number of a-shares issued shall not exceed 250 million shares. after deducting the fees of intermediaries and transaction taxes and fees, all the funds raised will be used to increase the capital of minsheng securities and develop minsheng securities business.

specifically, no more than 1 billion yuan will be used for wealth management business, with the aim of improving wealth management professional service capabilities, building a service ecosystem, optimizing branch layout, and enhancing brand image. no more than 1 billion yuan will be used for information technology, with the aim of consolidating the technological foundation, strengthening the construction of digital middle platforms, continuously promoting application product innovation, and strengthening technological empowerment.

after the completion of this transaction, the controlling shareholder and actual controller of guolian securities will not change, and minsheng securities and its holding subsidiaries will become holding subsidiaries of guolian securities.

"minsheng securities is a national comprehensive securities company approved by the china securities regulatory commission. it has brokerage business branches in nearly 30 provinces (including municipalities and autonomous regions) across the country, as well as investment banking business with significant competitive advantages. after the transaction is completed, the business layout of the listed company will be more reasonable, and the strength of each business line will be comprehensively enhanced. we are committed to achieving the effect of '1+1>2' through the integration of the two parties' businesses, thereby achieving leapfrog development of the listed company." guolian securities said.

asset size will increase to 165.3 billion yuan

according to the announcement, after this transaction, based on the data from january to march 2024, guolian securities' asset scale will increase by 77% from 93.2 billion yuan to 165.3 billion yuan; operating income will also increase by 613% from 173 million yuan to 1.237 billion yuan. "it will help enhance the listed company's risk resistance and sustainable operation capabilities, improve asset quality and overall operating performance, and be in the interests of all shareholders."

guolian securities disclosed its semi-annual report on the evening of august 30, achieving operating income of 1.086 billion yuan in the first half of 2024, a year-on-year decrease of 39.91%; net profit of 87.7093 million yuan, a year-on-year decrease of 85.39%. among them, the brokerage and wealth management business achieved revenue of 378 million yuan, a year-on-year increase of 1.36%; the investment banking business achieved revenue of 173 million yuan, a year-on-year decrease of 42.76%; the asset management and investment business achieved revenue of 321 million yuan, a year-on-year increase of 98.31%; the credit trading business achieved revenue of 127 million yuan, a year-on-year decrease of 17.07%; the securities investment business achieved revenue of 12 million yuan, a year-on-year decrease of 98.41%.

however, even though the performance in the first half of the year was not good, the non-bank team of guosen securities still believes that guolian securities' issuance of shares to acquire minsheng securities may significantly improve its overall strength. calculated based on the data in 2023, after the merger with minsheng securities, the company's total assets will increase by 84.05%, net assets by 160.76%, revenue by 127.10%, and net profit attributable to the parent company by 89.78%.

in the first half of the year, guolian securities added 119,400 new customers, with a total of 1.8558 million customers, a year-on-year increase of 10.06%; the total number of contracted fund investment advisory customers was 319,400, a year-on-year increase of 13.35%, and the asset size of authorized accounts was 6.958 billion yuan, basically the same as the previous year. a total of 30 cooperative channels have been launched.

asset management business is the fastest growing sector of guolian securities, with a net income of 310 million yuan during the period, a year-on-year increase of 111%, mainly due to the year-on-year increase in the scale of securities asset management and the scale of non-monetary management of guolian fund. in particular, the total asset management scale of guolian fund was 183.39 billion yuan, an increase of 23% from the beginning of the year, and the scale of non-monetary management was 127.9 billion yuan, an increase of 26% from the beginning of the year.

the rise of securities firm mergers and acquisitions

in addition to guolian securities' acquisition of minsheng securities, there are currently merger and acquisition plans of several other securities firms underway.

in july this year, the csrc disclosed that it had accepted guodu securities' application for change of major shareholders and actual controllers in accordance with the law. zheshang securities will become the largest shareholder of guodu securities, holding 34.25% of the shares. on june 7, zheshang securities issued an announcement that the company became the transferee of the public listing project of 5.95% of guodu securities held by tongfang venture capital and the public listing project of 1.46% of guodu securities held by jiarong investment, with the transaction prices being 911 million yuan and 224 million yuan respectively.

coincidentally, on june 24, founder securities issued an announcement that it intends to transfer 49% of its equity in credit suisse securities to beijing state-owned assets company for rmb 890 million. in addition, ubs will also transfer 36.01% of credit suisse securities to beijing state-owned assets company for rmb 651 million. as a result, the three parties also signed the "equity sale and purchase agreement on 85.01% equity of credit suisse securities (china) co., ltd.". after the completion of the above transaction, ubs and beijing state-owned assets company will hold 14.99% and 85.01% of credit suisse securities respectively.

on august 21, guosen securities also announced that it was planning to issue shares to purchase the 53.09% stake in wanhe securities held by shenzhen capital operation group. tao shengyu, a non-bank analyst at donghai securities, believes that this indicates that the merger and reorganization of the securities industry is moving from early business/regional complementarity to internal integration of the state-owned asset system.

according to his analysis, since the central financial work conference proposed to build a first-class investment bank, a wave of market-oriented mergers and acquisitions has continued to emerge. in the early stages of mergers and acquisitions, the market mostly promoted the improvement of the territory for the purpose of business or regional complementarity, and was committed to making up for the shortcomings of investment bank asset management, brokerage outlets, etc., such as guolian securities' acquisition of minsheng securities, zheshang securities' acquisition of guodu securities, and western securities' acquisition of guorong securities.

at this stage, in addition to guosen securities' acquisition of wanhe securities, jinlong holdings also recently announced that it will transfer its 20% stake in dongguan securities to the dongguan consortium. after completion, the dongguan sasac system will become the largest shareholder and hold nearly 80% of the shares. "we believe that the above two cases show that equity integration within the state-owned assets system has been put on the agenda. by integrating the licenses within the system, resources can be concentrated to empower the business and improve capital operation efficiency and license value. after the integration, the net capital will be more substantial, and the business development under the classified evaluation and supervision system is expected to open up a new pattern." tao shengyu said.