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produced by radar finance hongtu | edited by mo enmeng | deep sea

after nearly a year and a half, huaxing capital holdings, which triggered a series of chain reactions due to the "disappearance" of its controlling shareholder bao fan, finally ushered in its own moment of resumption of trading.however, after huaxing capital holdings resumed trading, its share price fell by more than 60% in a single day, and its market value evaporated by more than hk$2.7 billion in one day.

it is worth mentioning that one of the key reasons why huaxing capital holdings can resume trading this time is that it has reissued all the unpublished financial results in one go. however, judging from the multiple reissued financial reports, the company's performance is currently facing considerable pressure. since 2022, huaxing capital holdings' revenue has continued to decline, and the company began to suffer losses in the same year. in the first half of this year, huaxing capital holdings still handed in a mid-term report with declining revenue and failure to make a profit.

as a man who once helped liu qiangdong, wang xing and other bigwigs complete related capital operations, bao fan, the founder of huaxing capital holdings, is known in the industry as the "king of chinese internet m&a." although bao fan resigned from several important positions including chairman of the board and ceo as early as february this year, the aftermath of his cooperation with the investigation has not yet completely subsided.

previously, because bao fan cooperated with the relevant departments in the investigation, huaxing capital holdings paid a number of restricted funds of approximately 77.669 million yuan in 2023. the accounting treatment of this amount aroused the concern of the auditors. due to the lack of sufficient and appropriate audit evidence, the auditors finally issued a qualified opinion on the 2023 annual report of huaxing capital holdings.

radar finance found that since the company disclosed the news of bao fan's "loss of contact", bao fan has basically been absent from the current senior management team of huaxing capital holdings.while the company is gradually "de-bao fan-izing", bao fan's wife has now stepped into the spotlight. in the latest announcement of the replacement of non-executive directors, bao fan's wife xu yanqing was appointed as the company's non-executive director.

after nearly a year and a half, china renaissance capital holdings resumed trading, with its share price plummeting 66.3%

on september 6, china renaissance capital holdings issued an announcement on the hong kong stock exchange stating that, given that the board of directors believes that the company has met all the requirements of the resumption of trading guidelines, the company has applied to the stock exchange for the resumption of trading of the company's common shares from 9:00 a.m. on september 9, 2024, nearly a year and a half after the company was previously suspended.

back on february 16, 2023, china renaissance capital holdings issued a notice announcing a major news to the outside world: the company was temporarily unable to contact bao fan, then chairman of the board, executive director, ceo and controlling shareholder of the company. as soon as the news came out, it immediately sparked a lot of discussion in the investment circle.

ten days later, china renaissance capital holdings disclosed the latest developments of bao fan's "missing" incident in another insider information announcement. the board of directors learned that bao fan is currently cooperating with the investigation of relevant chinese authorities.

bao fan’s “loss of contact” has brought certain impacts to the listed company.in april last year, because the auditor could not contact bao fan and could not issue the audit report, the company decided to delay the publication of the audited annual results announcement for the year ending december 31, 2022 and the mailing of the 2022 annual report, and suspend trading from april 3 of that year until the release of the 2022 annual results.

radar finance learned that according to rule 6.01a(1) of the listing rules, the stock exchange may cancel the listing qualification of any securities that have been suspended for 18 consecutive months. for china renaissance capital holdings, its 18-month period will expire on october 2 this year.

if china renaissance holdings fails to rectify the issues that led to its suspension, implement the resumption of trading guidelines and fully comply with the listing rules to the satisfaction of the stock exchange, and fails to resume trading of its shares before october 2, 2024, the stock exchange's listing department will recommend to the listing committee to proceed with the cancellation of the company's listing status. pursuant to rules 6.01 and 6.10 of the listing rules, the stock exchange also has the right to impose a shorter specific rectification period in appropriate circumstances.

as the aforementioned date approaches, china renaissance capital holdings finally received the good news of resumption of trading. in a recent announcement, china renaissance capital holdings also stated that the company was not aware of and had no reliable information about any investigation that bao fan was cooperating with. so far, china renaissance capital holdings has not received any notice that it is under investigation, nor has it entered any court proceedings related to such incidents.

radar finance noticed that in the 2023 annual report released by the company, huaxing capital holdings mentioned that the group's asset management business faced new challenges in 2023. among them, due to the impact of bao fan's situation disclosed in the company's announcements published on february 16 last year, february 26 last year and august 9 last year, huaxing new economy rmb fund iv and usd fund iv fundraising ended ahead of schedule, and the investment period was terminated ahead of schedule, and no new project investment would be made.

even though bao fan has resigned from several key positions at china renaissance capital holdings, the aftermath of the company's cooperation with the relevant authorities' investigation has not yet been completely resolved. according to the financial report, due to bao fan's cooperation with the relevant authorities' investigation, china renaissance capital holdings paid a number of restricted payments of approximately rmb 77.669 million in 2023.

the accounting treatment of this amount aroused the auditor's concern. due to the inability to obtain sufficient and appropriate audit evidence, the auditor finally issued a qualified opinion on huaxing capital holdings' 2023 annual report. such audit reservations may only be removed after the status or results of the restricted funds and bao fan's cooperation in the investigation become clearer, or the auditor can obtain other appropriate evidence.

perhaps in order to give investors confidence, huaxing capital holdings issued an announcement on the eve of its official resumption of trading, stating that chairman of the board xie yijing, vice chairman lin jiachang, and four executive directors including wang lixing and du yongbo had separately promised huaxing capital holdings that they would not sell any of the company's equity interests from september 8, 2024 to march 7, 2025.

however, after the resumption of trading, huaxing capital holdings did not immediately feel the enthusiasm of the capital market. on september 9, the first day of the resumption of trading, the share price of huaxing capital holdings fell sharply.as of the close of september 9, huaxing capital holdings closed at hk$2.45 per share, with its share price falling 66.3% in a single day and its market value evaporating by more than hk$2.7 billion.

the company issued multiple financial reports at once, and its performance has been under pressure in recent years

bao fan's resignation from the company's relevant positions can be traced back to february this year. at that time, china renaissance capital holdings issued an announcement on the hong kong stock exchange, and the board of directors announced that bao fan had resigned from the company's executive director, chairman of the board, chief executive officer, and chairman of the nomination committee, chairman of the executive committee, and member of the remuneration committee.

as for the reason for bao fan's resignation, huaxing capital holdings explained in the announcement that it was due to health reasons and his desire to spend more time dealing with family affairs.

with bao fan's resignation, china renaissance capital holdings' senior management has undergone a round of personnel adjustments. among them, bao fan's position was basically taken over by xie yijing; lin jiachang was appointed as the company's executive director and vice chairman of the board, and will continue to be responsible for the group's international business, china renaissance international; wang lixing and du yongbo were appointed as co-presidents of the group on the basis of their executive director positions. in addition to the above-mentioned changes, bao fan's relative sun qianhong was appointed as the company's non-executive director.

after the new management team debuted, huaxing capital holdings continued to suspend trading for several months. on the eve of the resumption of trading, the company released several financial reports including the 2022 annual results, 2023 annual results and 2024 interim results, which is also the key factor for huaxing capital holdings to resume trading smoothly this time.

however, huaxing capital holdings, which released multiple financial reports in a row, did not deliver outstanding results this time.the financial report shows that in 2021, huaxing capital holdings' revenue reached 1.744 billion yuan, but in 2022 and 2023, the company's revenue fell for two consecutive years, recording 1.585 billion yuan and 1.006 billion yuan in revenues in the aforementioned periods, respectively, a year-on-year decrease of 9.12% and 36.54%, respectively.

like the revenue indicators, 2022 has also become a watershed for huaxing capital holdings' profitability indicators. in 2021, huaxing capital holdings' annual profit reached 1.645 billion yuan. but a year later, huaxing capital holdings fell into the quagmire of losses, recording an annual loss of 454 million yuan for the whole year. last year, huaxing capital holdings still failed to break free from the loss dilemma and recorded an annual loss of 461 million yuan again.

entering 2024, huaxing capital's revenue and profits have generally continued the downward trend of the previous two years. in the first half of the year, the market environment continued to be sluggish. the number of ipos and financing amounts in the overseas chinese concept stock market have declined significantly, and transactions in the private equity financing advisory market have synchronized with the sluggish trend of the investment and financing market.

during the period, huaxing capital holdings recorded revenue of 329 million yuan, a decrease of 38.7% from 537 million yuan in the same period last year.during the same period, the company recorded a loss of 86 million yuan, which was narrower than the loss of 163 million yuan in the same period last year.

specifically, the businesses of huaxing capital holdings mainly cover investment banking, investment management, huaxing securities and other sectors. in the first half of the year, the investment banking, investment management and huaxing securities businesses earned the company 98 million yuan, 131 million yuan and 103 million yuan in revenue respectively.

among them, the investment management business is not only the revenue pillar of huaxing capital holdings in the first half of the year, but also the only profitable segment among all businesses. in the first half of the year, this segment recorded an operating profit of 40 million yuan; during the same period, investment banking and huaxing securities recorded operating losses of 62 million yuan and 42 million yuan respectively, which to some extent dragged down the company's profit performance.

in the first half of this year, the investment management team of china renaissance capital holdings focused on project exit and post-investment management, actively promoted the merger and acquisition, old stock trading and repurchase of investment projects; and actively cooperated with the company in equity reform and declaration for projects with good development momentum. during the period, the fund exit amount managed by the group totaled rmb 893 million.

as projects continue to exit, the group's fund investment return ratio has further improved. the dpi of rmb phase i, rmb phase ii, usd phase i, usd phase ii and medical phase i funds all exceeded 100% at the end of the mid-term of 2024. the total asset management scale at the end of the period was rmb 34.8 billion, of which the asset management scale that generated management fees was approximately rmb 17.4 billion. carried interests continued to be included in the table in the first half of 2024, continuing to support the group's performance.

as the overseas ipo market for chinese concept stocks continued to be sluggish in the first half of 2024, the group's hong kong and us stock business actively expanded diversified capital market products, including atm additional issuance, de-spac listing, rto backdoor listing, private placement credit, convertible bonds, etc., so as to assist customers in successfully completing listing or financing in a severe market environment. at the same time, the investment banking team also maintains close communication with potential ipo clients in order to seize project opportunities when the market recovers.

at the same time, the group's investment banking business continues to face great market pressure this year. in this regard, china renaissance capital holdings said that the investment banking business conforms to the current environment. on the one hand, it insists on taking the road of high-quality products, continues to cultivate and gain from the top customers in key tracks, and on the other hand, actively expands new business directions and products.

"capital matchmaker" bao fan "disappears", his wife xu yanqing steps to the front

as the controlling shareholder of huaxing capital holdings, bao fan is known as the "capital matchmaker". in the media, bao fan often appears with a bald head, and is praised by many for his righteousness.

looking back at bao fan's life experience, he undoubtedly stood at the forefront of the times. public reports show that bao fan was born into a prominent family full of financial and diplomatic atmosphere. his grandfather was a senior executive of zhejiang bank and his parents were diplomats. such a family background, to a certain extent, laid a solid foundation for his future growth and career planning.

after graduating from fudan university and the norwegian school of economics and management, bao fan resolutely chose the financial industry as his stage. before founding china renaissance capital, bao fan had already left a deep mark in the international financial community. his seven years of experience at morgan stanley and credit suisse not only accumulated rich investment banking experience for himself, but also successfully helped many multinational companies complete key transactions such as fund raising, financing and mergers and acquisitions.

in 2000, bao fan moved to china and joined asiainfo group, a leading domestic it service and software company, as chief strategy officer, leading investment, mergers and acquisitions and strategic cooperation business. this experience allowed bao fan to further hone his strategic vision and execution ability.

in 2005, with deep insight into and boundless enthusiasm for the capital market, bao fan founded china renaissance capital, embarking on his extraordinary journey in china's new economy investment banking sector.

huaxing capital, under the leadership of bao fan, has shocked the industry with a series of dazzling achievements. from helping oak pacific technology, dangdang.com, qihoo 360 and other companies successfully raise funds, to promoting the mergers and acquisitions of giants such as didi chuxing, meituan dianping, and 58.com, and playing a key role in the ipos of giants such as jd.com and didi... one after another successful capital operation cases have made huaxing capital famous in the industry, and bao fan has also won the reputation of "capital matchmaker" and "the king of china's internet mergers and acquisitions".

today, huaxing capital has developed into a comprehensive financial services institution with business covering multiple fields including investment management, private equity financing, mergers and acquisitions, securities issuance and underwriting, securities research and trading, wealth management and other services.

tianyancha data shows that as of june 30, 2021, huaxing capital group's investment banking, investment management and huaxing securities have participated in and invested in more than 1,125 transactions, with a total transaction amount exceeding rmb 1.4 trillion, and the asset management scale of private equity investment funds exceeding rmb 61 billion.

according to huaxing capital’s official website, huaxing capital has offices in beijing, shanghai, hong kong and new york, with more than 600 employees.however, in the latest interim report for 2024, the number of employees held by huaxing capital holdings has dropped to 521, a decrease of 8% from the end of last year.

however, with the "disconnection" incident, huaxing capital is now "de-bao fan" to a certain extent. when the company's stock resumed trading, the lineup of non-executive directors of huaxing capital holdings changed again. sun qianhong, who previously served as the company's non-executive director, chose to resign. in the future, sun qianhong will devote her time to fulfilling her role and responsibilities as a director in the company's ceo's office.

after sun qianhong resigned, xu yanqing was selected as the company's new non-executive director. so far, the company's board of directors includes chairman and executive director xie yijing; executive directors lin jiachang, du yongbo and wang lixing; non-executive directors xu yanqing and lin ning; and independent non-executive directors yao jue, ye junying and zhao yue.

the newly appointed xu yanqing has a special identity, that is, the wife of the company's controlling shareholder bao fan. xu yanqing is deemed to have an interest in 277 million shares of the company, accounting for approximately 48.71% of the total issued share capital of huaxing capital holdings. such interests also represent bao fan's interests in the company.

according to the announcement, xu yanqing, 54, is the founder, chairman and ceo of china aviation technology (tianjin) co., ltd. it is reported that china aviation technology co., ltd. provides global business jet leasing business and is committed to serving high-end customers with internet solutions.

it is worth mentioning that xu yanqing has not served as a director of any other listed company in the past three years. according to the letter of appointment, xu yanqing will not receive director's remuneration as a non-executive director.

regarding xu yanqing's appointment as a non-executive director, china renaissance capital holdings mentioned more details in the announcement: "cr partners limited, the controlling shareholder holding approximately 38.38% of the company's issued shares, requested the appointment of xu yanqing as a director." according to the prospectus previously submitted by the company, cr partners limited is owned by bao fan, xie yijing, du yongbo and wang xinwei.

the board and nomination committee of the company considered the following factors and considered that the former has the character, experience and integrity to serve as a non-executive director. first, xu yanqing shared her thoughts and views on market strategic positioning, customer service and product coverage from her own experience, connecting potential investors with the business team of the group. she also frequently participates in business activities and has some understanding of the market supervision involved in the group's business.

secondly, xu yanqing’s business experience in the aviation sector, her charity work with the china social welfare fund association, and her participation in the emp course offered by the shenzhen international philanthropy institute, in which she learned about charity-related laws and regulations, strategic planning and management of non-profit organizations, and governance of non-profit organizations, will strengthen her understanding of the importance of governance and compliance in different situations.

in addition, xu yanqing has received legal advice and training on the duties and obligations of directors of hong kong listed companies, has a full understanding of the division of roles, and is interested in understanding hong kong's regulatory requirements, including relevant provisions of the listing rules.

no adverse factors were found in the background investigation and litigation investigation of xu yanqing in mainland china, hong kong, the united kingdom and the united states. taking into account the above circumstances, the board of directors and nomination committee of china renaissance capital holdings unanimously believe that the incidents involving bao fan will not have an adverse impact on xu yanqing's eligibility to be appointed as a non-executive director.