Reporter of the Economic Business: Feng Dianjun Editor of the Economic Business: Chen Xu
On August 16, China Huarong (HK02799, stock price 0.305 HK$, total market value of HK$24.48 billion) issued an announcement that the company and the independent third-party China Trust Industry Guarantee Fund Company (hereinafter referred to as "Credit Insurance Fund Company") signed the "Non-listed State-owned Property Rights Trading Contract for Financial Enterprises" and will transfer the Huarong Trust 76.79% equity held. The total cost of this transfer is RMB 6.152 billion.
announced that after the completion of this transfer, the company will no longer have any interests in Huarong Trust, and Huarong Trust will no longer be a subsidiary of the company and the comprehensive financial statements of the group.
" Daily Economic News " reporter noticed that after more than three months of listing and transfer, 76.79% of Huarong Trust's equity was finally acquired by the Credit Insurance Fund Company. In the view of industry insiders, the acquisition of the Credit Insurance Fund Company this time is more of a phased holding. As the industry's "stabilizer", the Credit Insurance Fund Company has provided more assistance to the industry by providing liquidity funding support in its previous operations.
"This time the equity acquisition is within the business scope of the Credit Insurance Fund. The significance is to directly take over the equity of Huarong Trust, to ensure the stability of the transition period of Huarong Trust to the greatest extent, and indirectly support China Huarong to improve its asset status and focus on its main business." said Liao Hekai, an analyst at Jinle Function.
Credit Insurance Fund Company "delisted" 76.79% equity of Huarong Trust
On April 29 this year, the official website of Beijing Financial Asset Exchange showed that China Huarong Asset Management Co., Ltd. planned to transfer 76.79% equity of Huarong Trust. At that time, the appraisal value of Huarong Trust's equity of Zhonglian Asset Appraisal Group Co., Ltd. was 6.152 billion yuan.
China Huarong stated in an announcement on August 16 that as the transferor, the company solicited an intent transferee after the end of the listing and disclosure period of Beijinsou to guarantee the fund company for China Trust Industry.
Huarong Trust is a national non-bank financial institution . It was established by China Huarong in 2008 on the basis of restructuring Xinjiang International Trust Investment Co., Ltd. In recent years, Huarong Trust has deepened its main business transformation, firmly returned to the origin of trust and practiced serving the development of the real economy. Its current business types are mainly trust business and inherent business. In addition, the announcement also stated that the Credit Insurance Fund Company is not an affiliated person under the definition of listing rules for other shareholders of Huarong Trust.
Credit Insurance Fund Company pays RMB 500 million in refundable margin paid by China Huarong and Beijin Institute and temporarily escrowed by Beijin Institute as part of the transfer price. The Credit Insurance Fund Company shall transfer the remaining transfer price (i.e., a total of 5,652.3407 million yuan) to the settlement account designated by the Beijin Institute within 5 working days after the property transaction contract takes effect.
After this transfer is completed, China Huarong will no longer have any interests in Huarong Trust, and Huarong Trust will no longer account for China Huarong's subsidiary and the comprehensive financial statements of the group.
Industry insiders: Credit Insurance Fund Company or a temporary holding of
Credit Insurance Fund Company is a banking financial institution established with the approval of the State Council and approved by the China Banking and Insurance Regulatory Commission . The company was established by China Trust Industry Association and 13 trust companies with stable operations and strong strength, with a registered capital of 11.5 billion yuan. The company's main tasks and goals are to prevent, resolve and deal with trust industry risks in accordance with market-oriented principles and promote the sustainable and healthy development of the trust industry.
The last time the trust insurance fund company "takes rescue" was Anxin Trust . In July 2021, Anxin Trust, which had a debt crisis, announced its restructuring plan, intending to raise 9 billion yuan in private placement from the Shanghai Di'an Company jointly established by China Trust Industry Guarantee Fund and several Shanghai state-owned enterprises. At the same time, Anxin Trust reached a settlement with Bank of China Shanghai Branch, Credit Insurance Fund and Credit Insurance Fund Company for principal amounts of 3.2 billion yuan and 5.65 billion yuan respectively.
More than one trust company's 2021 annual reports also mentioned information on applying for liquidity support from the Credit Insurance Fund Company.For example, Jingu Trust disclosed that on June 28, 2021, the board of directors reviewed and passed the proposal to "Jingu Trust apply for liquidity support from the Credit Insurance Fund Company of no more than 500 million yuan to submit China Cinda for guarantees."
"For this transfer, in terms of the significance of the existence of the Trust Insurance Fund Company, it is definitely not a long-term holding or acquiring the equity of some trust companies, but more to serve the purpose of phased risk resolution." A person in the trust industry told the "Daily Economic News" reporter through WeChat.
Judging from the performance of the transferred Huarong Trust, the company's equity attributable to the parent owner prepared by China Enterprise Accounting Standards on December 31, 2021 was approximately RMB 3.41 billion, and its profit after deducting taxes and fees was RMB 652 million, an increase of 110.95% year-on-year. According to the company's 2021 annual report, the company manages 120 surviving trust projects, with an actual paid trust scale of 93.768 billion yuan, and a non-performing rate of proprietary assets of 1.59%.
It is worth noting that Huarong Trust's 76.79% equity transaction has been listed for a long time, but the final intention transferee is only one company, Trust Insurance Fund. This also reminds people of the fact that Zhongyuan Trust 9.124% equity was also publicly auctioned, but failed to sell twice, and the starting price was repeatedly discounted. Does this mean that the trust license is no longer attractive?
The above-mentioned person believes that due to the adjustment of regulatory policies, it is undeniable that trust licenses are indeed not as good as before, but the market standards are only one of multiple measurement methods. The expectations placed by potential shareholders on trust licenses may not meet their original goals.
"The exchange transfers equity and listing bidding involve many arrangements, especially special targets such as trust companies. I think this transfer transaction does not mean that the license is worthless." The above person said.
China Huarong said in the announcement that this transfer will help the company adhere to its return to its original nature, focus on its main business, ensure sustainable business development, and meet the requirements of China Banking and Insurance Regulatory Commission and other regulatory agencies for financial asset management company to gradually withdraw from its non-main business and focus on its main business.
In addition, this transfer can effectively release capital and be used to expand the group's main business, which is conducive to the group's insistence on strengthening and improving its main business, focusing more resources and energy on the development of the main business of non-performing assets, and being more beneficial to the group's future development and the long-term interests of shareholders.
China Huarong announced its performance in the first half of 2022 on the evening of August 16. "According to preliminary estimates, the net loss attributable to the shareholders of the company for the six months ended June 30, 2022 is expected to be approximately RMB 18.878 billion."
Before this, China Huarong completed the equity transfer of Huarong Trading Center in 2021; in December of the same year, China Huarong transferred Huarong Consumer Finance to Ningbo Bank for a price of 1.091 billion; in January this year, China Huarong announced that it plans to sell approximately 72% of the equity of Huarong Securities for a price of 10.933 billion.
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