Source of this article: Times Weekly Author: Ning Peng
After 8 years, Guotai Junan finally completed the holding of Huaan Fund .
Recently, China Securities Regulatory Commission officially approved Guotai Junan to acquire 8% equity of Huaan Fund held by Shanghai Industrial Investment . After the completion of this transaction, Guotai Junan holds 51% of the equity of Huaan Fund. This means that Guotai Junan has become a beneficiary of the relaxation of ", one-part, one-control " and has become the first securities company to switch from "one-part, one-control" to "one-control, one-card".
The so-called "one participation and one control" means that the number of fund management companies that are held by one institution or multiple institutions under the control of the same actual controller shall not exceed two, and the number of holding fund management companies shall not exceed one. In May 2022, the "one participation, one control and one license" was implemented. Specifically, on the premise of continuing to adhere to the "one participation, one control" policy of fund management companies, the restrictions on the number of public licensing will be moderately relaxed, and professional asset management institutions such as securities asset management subsidiaries, insurance asset management companies, bank wealth management subsidiaries under the same group will be allowed to apply for public licences.
Before this, Guotai Junan Asset Management officially issued a public fund license. With the realization of holdings in Huaan Fund, Guotai Junan has become the securities company with the highest "base content".
Guotai Junan "change the brand"
Guotai Junan has made a long-term layout in the public offering industry. The Guolian An Fund, which it initiated and established, is one of the first joint venture fund companies in China.
Guolianan Fund was established on April 3, 2003 until March 28, 2018 that the China Securities Regulatory Commission approved Guotai Junan to transfer its 51% equity in Guolianan Fund to Pacific Asset Management, and the holding relationship lasted for 15 years.
Of course, the transaction between Guotai Junan and Pacific Asset Management occurred on April 28, 2017, and the consideration of this part of Guolian's equity was 1.045 billion yuan. Based on this calculation, Guolian's valuation at that time was around 2 billion yuan. It is worth mentioning that the transaction between Guotai Junan and Pacific Asset Management once ushered in a "disruptor".
Source: Tuchuang Creative
After Guolian's equity was listed on the Shanghai Stock Exchange, Guosheng Securities once showed strong interest, but was "stopped" by Guotai Junan. Guosheng Financial Holdings announcement shows that Guotai Junan believes that Guosheng Securities does not meet the qualifications for transfer in two aspects: First, Guosheng Securities is relatively controlling for the holding of Jiangxin Fund , which does not comply with the "one participation and one control" stipulated by the China Securities Regulatory Commission; second, although the shareholders' meeting approved the "Proposal on the Transfer of 30% of Jiangxin Fund Equity and Related Transactions of Guosheng Securities", the company articles of association stipulate that if the equity of any domestic fund management company is transferred for less than three years, it is not allowed to become a shareholder of the company.
Guotai Junan's abandonment of Guolian's equity is obviously due to its pursuit of controlling stake in Huaan Fund. As the "old ten old companies", the five shareholders are all affiliated with the Shanghai State-owned Assets Supervision and Administration Commission, among which Shanghai Electric , Shanghai Industrial Investment, and Jinjiang International Investment Management are companies under the SASAC, and Guotai Junan Investment Management and Shanghai Guotou are subsidiaries under the Shanghai International Group .
A senior industry insider told the Times Weekly reporter that from various indicators such as asset management scale and profitability, Huaan Fund has obvious advantages over Guolian's Fund, and the reform of state-owned enterprises provides opportunities for Guotai Junan to re-layout.
In 2014, Shanghai Electric listed and transferred its 20% equity in Huaan Fund on the Shanghai Stock Exchange for a price of 600 million yuan. Because the other shareholders gave up the right of first refusal, the whereabouts of this part of the equity once caused various speculations. In the end, Guotai Junan successfully delisted and became a shareholder of Huaan Fund for the first time. According to the regulatory requirements at that time, the transaction had not entered the payment stage for a long time, and Guotai Junan paid two additional payment fees totaling 49.906 million yuan for this.
In March 2021, March 2022 and May 2022, Guotai Junan acquired 8%, 15% and 8% of the equity of Huaan Fund from Jinjiang International Investment Management, Shanghai Guotou and Shanghai Industrial Investment respectively. Among them, the 8% equity purchased from Jinjiang International Investment Management was not announced, and the subsequent two equity transactions were priced at RMB 1.812 billion and RMB 1.012 billion respectively.With the growth of Huaan Fund's asset management scale, the transaction consideration has gradually increased. Compared with the 51% equity of Guolian's Fund sold by Guotai Junan that year, Guotai Junan may have paid a difference of more than 2 billion yuan for "changing the brand".
The first "one control, one license"
Before holding Huaan Fund, Guotai Junan Security Fund's subsidiary Guotai Junan Asset Management was also approved for public offering business qualification in December 2020 and officially obtained a public offering fund license on April 20, 2021.
After 8 years, Guotai Junan finally achieved the consolidation of holdings in Huaan Fund and became the first securities company in the industry to hold a public fund management company and an asset management subsidiary with the qualification of public fund management business after the "new public fund regulations".
Huatai Securities Research Report pointed out that Guotai Junan has a stake in Huaan Fund to carry out public offering business, and the shareholding ratio has continued to increase. In addition, Huaan Fund's performance continues to grow, and its contribution to the company's operating income and net profit has increased significantly.
According to Shenwan Hongyuan Securities , Huaan Fund achieved revenue of 1.82 billion yuan and net profit of 510 million yuan in the first half of 2022, and contributed 3.4% to Guotai Junan at that time. Guotai Junan's 2022 semi-annual report shows that the operating income in the first half of the year was 19.554 billion yuan, a year-on-year decrease of 10.79%; the net profit attributable to shareholders was 6.373 billion yuan, a year-on-year decrease of 20.47%.
In fact, among the subsidiaries of Guotai Junan, Huaan Fund has the most profitable ability. In 2021, Huaan Fund achieved revenue of 3.631 billion yuan and net profit of 1.006 billion yuan; Guotai Junan Asset Management achieved revenue of 2.07 billion yuan and net profit of 614 million yuan; Guotai Junan Zhengyu achieved revenue of 794 million yuan and net profit of 532 million yuan.
Dongxing Securities Research report pointed out that Huaan Fund, as one of the "old ten" public funds, has rich fund management experience and a large scale fund investment team. It is expected to provide Guotai Junan with useful fund management experience and high-quality transferable customer base. It is an effective way to attract low-cost traffic in the entire business chain and can help sell financial products .
Tianfeng Securities research report believes that after controlling stake in Huaan Fund, it will not only make up for the shortcomings of Guotai Junan in the public offering track, but will also become a scarce target for the industry with dual public offering licenses, and is expected to obtain a valuation premium.
