Regarding the termination of equity participation, Guoyuan Securities stated that during the application period for the establishment qualification of Guoyuan Rural Life Insurance, the China Securities Association issued the "Management Regulations for Private Equity Investment F

Guoyuan Rural Life Insurance, which had been approved for 4 years, had another setback in the launch stage.

So, is it the poor overall profitability of the securities industry that affects Guoyuan Department’s insurance license layout this time? Or is the shareholding ratio too high and the qualifications insufficient, causing the Guoyuan Department to miss out on controlling rights?

1

Leiming Kehua wants to become the major shareholder?

Regarding the termination of equity participation, Guoyuan Securities stated that during the application period for the establishment qualification of Guoyuan Rural Life Insurance, the China Securities Association issued the "Management Specifications for Subsidiaries of Securities Companies Private Equity Investment Funds ", requiring each securities company to rectify the relevant subsidiaries.

At present, Guoyuan Equity has completed the rectification in accordance with the regulatory requirements and has transformed into a private equity investment fund subsidiary of the company, engaged in private equity investment fund business.

According to the "Management Regulations for Private Equity Investment Fund Subsidiaries of Securities Companies", private equity investment fund subsidiaries of securities companies are not allowed to invest their own funds in investment targets other than private equity funds and securities with lower risk and higher liquidity.

Therefore, the board of directors of Guoyuan Securities agreed that Guoyuan Equity should terminate its participation in Guoyuan Rural Life.

Will the withdrawal of Guoyuan equity affect the formal preparation of Guoyuan Rural Life Insurance? Who will be the taker?

According to the shareholding information previously announced by Guoyuan Rural Life Insurance, there are 6 sponsors, including Leiming Kehua (20%), Guoyuan Agricultural Insurance Co., Ltd. (20%), Anhui Communications Holding Group Co., Ltd. (20%) ), Anhui Conch Group Co., Ltd. (13.7%), Anhui Jiegou Mining Co., Ltd. (13.3%), Anhui Guoyuan Financial Holding Group Co., Ltd. (13%).

Judging from the above information, the Guoyuan Department could originally control 33% of the total and become the major shareholder. Although it is approaching the red line that the maximum shareholding of major shareholders cannot exceed one-third, it barely meets the regulatory requirements.

"International Finance News" found that Guoyuan Financial Holdings is the parent company of Guoyuan Securities. In the equity structure of Guoyuan Rural Life Insurance, 13% of the equity of Guoyuan Financial Holdings includes 10% of Guoyuan Equity. . The exit of Guoyuan's equity means that the Guoyuan department can currently hold 23% of the shares, and the 10% of the equity surrendered will be absorbed by other shareholders. The latest shareholding information of each shareholder has not yet been announced.

Looking at the direction of capital, industry insiders speculate that Leiming Kehua is likely to "take over" and take over the 10% equity ceded by Guoyuan Equity.

There is a piece of news that cannot be ignored: From August 10th to 16th this year, Guoyuan Equity suddenly appeared among the top ten shareholders of Leiming Kehua. Flush Data shows that Guoyuan Equity Holds 0.78% of Leiming Kehua. Not only that, the largest shareholder of Leiming Kehua is Huaibei Mining (Group) Co., Ltd., which belongs to the same industry as Anhui Jiegou Mining, the fifth largest shareholder of Guoyuan Rural, and both belong to Huaibei area enterprises. As for the two Reporters are still trying to verify whether there is any connection.

2

The helplessness of Guoyuan Department

Why did Guoyuan Department take the initiative to give up the opportunity to be the controlling shareholder of a life insurance license without exceeding the regulatory red line?

Reason 1: Brokerage performance decline

Some brokerage insiders said in an interview with a reporter from the International Finance News that it may be that the brokerage performance has declined this year and the financial pressure is high, so Guoyuan Equity Investment has taken the initiative to withdraw. Reporters from

found out that amid the market downturn, Guoyuan Securities is currently in poor condition both in terms of performance and stock price. In the first half of the year, Guoyuan Securities achieved revenue of 1.110 billion yuan, a year-on-year decrease of 29.40%; net profit attributable to the parent company was 232 million yuan, a year-on-year decrease of 54.90%.

public information shows that Guoyuan Securities’ share price previously hit a four-year low of 6.48 yuan.After 's stock price broke through the net, on September 11, Guoyuan Securities' major shareholder Guoyuan Financial Holdings took measures to increase its holdings to boost the stock price. Outsiders believe that in the first half of the year, the performance of Guoyuan Securities' five major business lines has declined, and the revenue contribution of its proprietary investment business was -79.6134 million yuan. It is expected that Guoyuan Financial Holdings will continue to increase its holdings to boost the stock price in the future.

After the recent increase in holdings, Guoyuan Financial Holdings holds 721 million shares of Guoyuan Securities, with a shareholding ratio of 21.42%. Guoyuan Financial Holdings and its person acting in concert, Guoyuan Trust, hold a total of 1.176 billion shares, accounting for 34.96% of the total share capital. Guoyuan Financial Holdings' plan to increase its holdings does not seem to be over yet. It previously announced that it plans to continue to increase its holdings with its own funds in the next six months. The total amount will not exceed 160 million yuan, depending on market conditions.

Reason 2: Qualification issues

Some analysts believe that according to the regulations of the China Banking and Insurance Regulatory Commission, if the total number of related parties reaches the standard of controlling shareholders, the net assets of the shareholder with the highest shareholding ratio shall not be less than 3 billion yuan.

Guoyuan Agricultural Insurance, which holds 20% of the shares, had net assets of 2.767 billion yuan in the second quarter of 2018, which does not meet the above shareholder qualification requirements.

In addition, the reporter noticed that Guoyuan Department may have had no choice but to give up its status as the controlling shareholder of the life insurance license. Because it takes at least 7 years for a life insurance company to become profitable from its establishment. During this period, if you are the largest shareholder, you must provide capital increase support from time to time to enable a new insurance company to embark on the path of development. From a financial perspective, if Guoyuan Securities' profitability is good, it may stick to its layout. But in comparison, Leiming Kehua's profit situation in the first half of the year was better.

(Editor: Zhang Mingjiang)