"Investor's Network" Meng Xing
Cindat Life's 10 billion capital increase plan will finally be implemented at the beginning of 2024.
A few days ago, Wusan Zhongda Group Co., Ltd. (hereinafter referred to as "Wusan Zhongda", 600704. SH) announced that Cindat Life Insurance Co., Ltd. (hereinafter referred to as "Cindat Life") received the "Reply of the Zhejiang Supervision Bureau of the State Financial Supervision and Administration on the Change of Registered Capital and Shareholders of Cindat Life Insurance Co., Ltd." issued by the Zhejiang Supervision Bureau of the State Financial Supervision and Administration of the People's Republic of China, approving the change of the registered capital of Cindat Life Insurance Co., Ltd. of about 10.204 billion yuan.
According to the announcement, Wusan Zhongda previously increased its capital with Hangzhou City Investment Group Co., Ltd., Hangzhou Xiaoshan Environment Group Co., Ltd., and Hangzhou Xiaoshan Qianjiang Century City Equity Investment Co., Ltd. to invest in Xintai Life Insurance, with a capital increase of no more than 9.374 billion yuan, of which the company increased its capital with its own funds of no more than 6.065 billion yuan. After the capital increase, the company holds 33.00% of the equity of Cindat Life, and the company's nominee directors do not exceed one-third of the total number of board members, and the company does not control Cindat Life, and Cindat Life is not included in the company's consolidated financial statements.
Introduce four new shareholders
According to the data, Xintai Life Insurance was established in May 2007 and is the first local legal person life insurance company in Zhejiang. The company operates various types of life insurance business, and has the ability to invest in credit bonds, equity investment, direct stock investment, real estate investment and other fields, with investment assets of about 200 billion yuan as of the end of June 2023.
Headquartered in Hangzhou, Zhejiang, the company is a leader in China's supply chain integration services, one of the first batch of national supply chain innovation and application demonstration enterprises, and has been ranked among the world's top 500 companies for 12 consecutive years. According to the development strategy of "one body and two wings", the company carries out a more active, focused and effective series of management and investment activities around the integrated service of smart supply chain, and shapes the industrial pattern of strategic coordination, cycle hedging and industry-finance interaction in accordance with the implementation path of "thinking with supply chain, integrating the industrial chain, and building a large ecosystem of products", and strives to build a "big and strong, rich and beautiful" respected excellent listed company.
Before the capital increase of Wusan Zhongda and other companies into Xintai Life Insurance, the shareholders of the company holding more than 5% of the shares were Deposit Insurance Fund Management Co., Ltd., China Insurance Security Fund Co., Ltd., and Beijing Jiusheng Asset Management Co., Ltd., with shareholding ratios of 34.70%, 34.70%, and 19.80% respectively.
In recent years, the Deposit Insurance Fund and the Insurance Security Fund have played a great role in resolving the risks of financial institutions. Insurance protection funds have appeared among the shareholders of insurance companies such as Zhonghui Life Insurance, Ruizhong Life Insurance, and Haigang Life Insurance, while deposit insurance funds have invested in Mengshang Bank, etc., and it is rare for them to directly invest in insurance companies.
In October last year, Cindat Life Insurance announced that the company held the second extraordinary general meeting of shareholders in 2023 on September 28, 2023, and deliberated and approved the "Proposal of Cindat Life Insurance Co., Ltd. on Changing the Registered Capital and Amending the Articles of Association", agreeing that the company will issue about 5.204 billion new shares, with a subscription price of RMB 1.8011 per share, and the registered capital of the company will be changed from RMB 5 billion to about RMB 10.204 billion.
According to the announcement, the voting result of the meeting was about 36.59 shares agreed, 990 million shares opposed, and 0 shares abstained.
It is worth noting that the number of shares held by Beijing Jiusheng Asset Management Co., Ltd., the original shareholder of Cindat Life, is exactly 990 million shares.
According to the announcement issued by Wushan Zhongda, Wusan Zhongda, Hangzhou City Investment Group, Hangzhou Xiaoshan Environmental Group and Hangzhou Xiaoshan Qianjiang Century City increased their capital by about 6.065 billion yuan, 1.654 billion yuan, 1.029 billion yuan and 625 million yuan respectively, with shareholding ratios of 33%, 9%, 5.60% and 3.40% respectively, with a total shareholding of 51%.
In this capital increase, the Deposit Insurance Fund, the Insurance Security Fund and other original shareholders of Cindat Life Insurance did not participate, and the shareholding ratio will be diluted. After the completion of the capital increase, the deposit insurance fund and the insurance security fund will hold 17% of the shares, ranking the second and third largest shareholders.
or complement each other's strengths
For this capital increase, Wusan Zhongda pointed out in the announcement that the company's participation in the capital increase and investment in Xintai Life Insurance will help further optimize the layout of the company's financial industry, promote the close integration of insurance funds across cycles and low-cost advantages with the company's pension service industry, explore and practice the business model of "pension + insurance", and help the development of the common wealth pension industry. In addition, on the basis of complying with regulatory requirements, we will promote the integrated development of insurance investment business with the company's smart supply chain integration services and investment in emerging industries, and steadily enhance the core competitiveness of the company's financial services.
In May last year, Wusan Zhongda replied to investors' questions about the operation of the pension sector on the SSE interactive platform, the company said that the pension sector has been developed for 5 years, and the occupancy rate of the three major high-end pension institutions is close to full, and it has now achieved profitability.
Some analysts said that through the capital increase, Wusan Zhongda and Xintai Life Insurance may complement each other's advantages and lay out in the direction of "insurance + pension" that small and medium-sized insurance companies have always been unable to afford.
From the perspective of the operating conditions of Cindat Life, the announcement issued by Wusan Zhongda shows that the business channels of Cindat Life are mainly bancassurance channels, supplemented by economic agency and individual insurance channels, and each channel develops in a balanced manner. Cindat Life Insurance has 3 subsidiaries, 18 branches, 79 central branches and subordinate branches, and 162 fourth-level institutions, basically covering major premium provinces with relatively active economic development and high insurance depth. Cintai Life has nearly 10,000 employees, serves more than 2.5 million customers, and has a scale premium of about 50 billion yuan in 2022.
According to the announcement, according to the unaudited statements of Cindat Life, as of the end of June 2023, the total assets of Cindat Life were 221.775 billion yuan, the total liabilities were 220.016 billion yuan, and the net assets were 1.759 billion yuan. From January to June 2023, the company's operating income was 35.666 billion yuan, and the net loss was 478 million yuan. According to the relevant provisions of the Notice of the China Insurance Regulatory Commission on Matters Concerning the Optimization of the Discount Rate Curve Used in the Evaluation of Insurance Contract Liabilities, the unexpired liability reserve of Cindat Life's traditional insurance increased by about 880 million yuan, resulting in a loss in the first half of the year. In the long run, this part of the increase in the unexpired liability reserve will be gradually released in the future insurance period, which will be reflected in future profits.
According to the solvency report for the third quarter of 2023, the company achieved operating income of 44.691 billion yuan in the first three quarters of last year, and the company did not announce its net profit.
In terms of solvency, as of the end of the third quarter of last year, Cindat Life's core solvency adequacy ratio and comprehensive solvency adequacy ratio were 106.27% and 121.88% respectively, meeting regulatory requirements.
In addition, Cindat Life has not disclosed a comprehensive risk rating for several quarters. According to the solvency report for the third quarter of last year, in accordance with the relevant requirements of the "Evaluation Index for Comprehensive Risk Rating (Classification Supervision) of Insurance Companies" and the technical guidelines for data submission, the company has completed the data submission of the comprehensive risk rating in the second quarter of 2023 on time through the "C-ROSS II Regulatory Information System" of the China Banking and Insurance Regulatory Commission.
A number of insurance companies "replenish blood"
Entering 2024, in addition to Cindat Life's capital increase trend, Huatai Life Insurance, Changjiang Property Insurance and other insurance companies have disclosed their approved capital increase or proposed capital increase plans.
On January 2, the State Administration of Financial Supervision and Administration agreed to increase the registered capital of Huatai Life Insurance from 3,632.5 million yuan to 4,312.5 million yuan, and on January 5, Three Gorges Life announced that it had received regulatory approval to increase the registered capital from 1 billion yuan to about 1.537 billion yuan.
On January 15, Changjiang Property Insurance announced that the company's 5th extraordinary general meeting of shareholders in 2023 deliberated and approved the latest capital increase and share expansion plan. Hubei Hongtai Group actually subscribed for 732 million additional shares of the company, and Changjiang Industrial Investment subscribed for 255 million shares.
From the perspective of the whole year of 2023, the demand for capital replenishment of insurance companies continues to be high. According to incomplete statistics, in 2023, a total of 24 insurance companies, including China Life Property Insurance, Sunshine Insurance, and CPIC Property Insurance, have been approved for 26 capital increases, with a scale of more than 40 billion yuan. Among them, Chinese Life (Overseas) and Taikang Pension have completed two capital increases. In addition, 17 insurance companies, including Aixin Life Insurance and CITIC Prudential Life Insurance, have disclosed capital increase plans and are waiting for regulatory approval.
In addition to "replenishing blood" by increasing capital, insurance companies also replenish funds through bond issuance. According to Wind statistics, insurance institutions will issue a total of 112.17 billion yuan of bonds in 2023, an increase of 399.6% over 2022.
Some analysts pointed out that in 2023, the significant growth of the scale of insurance companies' "blood replenishment" will be affected by many factors, including intensified market competition, pressure on solvency adequacy ratio, increased volatility of investment income, stricter financial supervision, and pressure on business growth. Looking forward to 2024, the growth trend of insurers' capital replenishment scale may be strengthened due to factors such as the capital gap caused by the delay in the switching period of the second generation and second phase of the solvency rules. (Produced by Thinking Finance)■