21st Century Business Herald reporter Wang Yuanyuan reported from Shanghai
On the evening of May 24, Guotai Junan announced that it intends to transfer 8% of Huaan Fund held by Shanghai Industrial Investment (Group) Co., Ltd. in a non-public agreement transfer, and the transfer price will not exceed RMB 1.012 billion in principle.
After the completion of the transaction, Guotai Junan’s stake in Huaan Fund will increase to 51%, and Huaan Fund will become a holding subsidiary of Guotai Junan.
Guotai Junan said that after this transaction, it will help to make up for the shortcomings of the company’s public fund business layout and enhance the company’s core competitiveness. And Guotai Junan will realize the financial consolidation of Huaan Fund, which will help improve the company’s profitability.
In addition, Guotai Junan will be more complete in terms of public offering business. Its holding Huaan Fund and its wholly-owned subsidiary, Guotai Junan Asset Management, respectively hold the public offering fund management license and asset management institution public offering license approved by the China Securities Regulatory Commission, and will benefit Guotai Junan’s large asset management business through the development of public offering business in the future. .
Three acquisitions in two years
Guotai Junan first held a 20% stake in Huaan Fund. This equity acquisition is the third acquisition of Huaan Fund by Guotai Junan within two years.
In March 2021, Guotai Junan disclosed that it had received an approval from the China Securities Regulatory Commission, agreeing that Shanghai Jinjiang International Investment Management Co., Ltd. would transfer its 8% stake in Huaan Fund to the company. After the completion of the equity transfer, Guotai Junan’s stake in Huaan Fund was changed from 20% to 28%.
Seven months later, on October 8, 2021, Guotai Junan disclosed that the third interim meeting of the company’s sixth board of directors reviewed and approved Guotai Junan’s transfer by non-public agreement to Shanghai Shangguo Investment Management Co., Ltd. (referred to as “Shanghai Shangguo Investment Property Management Co., Ltd.”). The 15% stake in Hua’an Fund held by China Investment Management”), the transaction price does not exceed 1.812 billion yuan.
On October 27, 2021, Guotai Junan signed the above-mentioned equity transfer agreement, and the transaction price was determined to be 1.812 billion yuan. After the transaction is completed, Guotai Junan’s stake in Huaan Fund will increase from 28% to 43%.
On March 14, 2022, Guotai Junan announced that the company had received approval from the China Securities Regulatory Commission to approve Shanghai Investment Management to transfer its 15% stake in Huaan Fund to Guotai Junan. However, affected by the epidemic in Shanghai, the above-mentioned shares transferred by the company are undergoing industrial and commercial change registration.
Guotai Junan previously stated that increasing its stake in Huaan Fund is another important measure for Guotai Junan to enhance the core competitiveness of its public offering asset management business. An important phased achievement of the strategic goal of “Short Board”, the strategic layout of the company’s asset management business has been further improved.
Guotai Junan said that it will take the opportunity of increasing its stake in Huaan Fund to actively open up the wealth management and asset management service chain, actively meet the wealth management needs of customers in different categories, comprehensively improve the allocation ability of global high-quality assets, and actively innovate public REITs, green low-cost Carbon, pension “third pillar” and other fields of products and services, to create an asset management business system with Guotai Junan characteristics.
This transaction is the third acquisition in two years. After completion, Guotai Junan will increase the shareholding ratio of Huaan Fund to 51%, and Huaan Fund will become a holding subsidiary of Guotai Junan.
Improve the asset management map
Regarding the continued acquisition and realization of the controlling stake, some analysts close to Guotai Junan have made conjectures earlier: “Guotai Junan used to have a Guolian An fund, but it was sold in 2017-2018, so Guotai Junan’s public offering business is better than its peers. It can be said that there will be some deficiencies. It can be seen that Guotai Junan Asset Management has been actively in the forefront of the industry in the development of public offering business in recent years, in fact, it also hopes to quickly develop its public offering business.”
As early as January 2017, Guotai Junan disclosed that in order to optimize the investment management business layout, the company will publicly list and transfer its 51% stake in Guolianan Fund on the Shanghai United Assets and Equity Exchange, and Pacific Asset Management will become the equity with a quotation of RMB 1.045 billion. assignee and make full payment.
In March 2018, the SEC approved the transaction. Subsequently, in April 2018, Guolian Fund completed the industrial and commercial change registration procedures for the above-mentioned equity transfer. The investment income generated by the disposal of Guolianan Fund that year accounted for 6.99% of Guotai Junan’s total annual profit in 2018.
Subsequently, Guotai Junan’s public offering business territory was weaker than many of its peers. In the 2019 annual report, Guotai Junan’s fund management business has only a 20% stake in Huaan Fund’s territory.
Another piece related to public offering is to actively develop the public offering business of Guotai Junan Asset Management. For example, in 2019, Guotai Junan Asset Management was among the first to obtain the pilot qualification for the transformation of large-scale public offerings, and was the first in the industry to complete the transformation of the first public offering of collective products.
Some brokerages believe that looking back, it can be said that Guotai Junan’s series of trading actions are closely related to regulatory policies. From 2017 to 2018, before the sale of Guolianan Fund, Guotai Junan held Guolianan Fund and participated in Huaan Fund, which complied with the regulation of “one participation and one control”. However, at this time, the asset management business of the securities industry is facing a transformation problem. If you want to develop the public offering business of asset management, it will conflict with the “one participation and one control” regulations at that time. Therefore, Guotai Junan chose to sell the equity of Guolianan Fund. The public offering business of Guotai Junan Asset Management can be developed with peace of mind without worrying about the risk of violations.
Facts have proved that Guotai Junan is indeed more enthusiastic about its asset management subsidiary and Huaan Fund than Guolian Fund, the “first Sino-foreign joint venture fund management company in the industry”. For example, Guotai Junan Asset Management has been “rushing” to the forefront of the industry in the development of public offering business, including actively carrying out public offering transformation of large collection products, and actively obtaining public offering fund licenses.
“However, in July 2020, the regulation relaxed the restrictions on ‘one participation and one control’, and some large companies can ‘one participation, one control and one license’, that is to say, the same entity is allowed to control a fund company and a public offering at the same time. As a brand institution, it also participates in a fund company. For Guotai Junan, since all the shares of Guolianan Fund have been sold, it may be possible to quickly win the controlling stake of Huaan Fund during the policy dividend period. Therefore, starting from 2021, Guotai Junan has acquired three consecutive acquisitions. Huaan Fund’s equity, until the realization of holding.” The aforementioned brokerage source said.
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