The merger and restructuring of Guotai Junan and Haitong Securities, which has attracted wide attention, ushered in significant progress. On October 10, Haitong Securities and Guotai Junan resumed trading, and H-share stocks opened 134.35% and 106.17% higher respectively, and A-share stocks opened with a daily limit. Previously, due to the planning of major asset restructuring, Haitong Securities, Guotai Junan A shares, and H shares have been suspended since September 6. Now, at the same time as the resumption of trading, the relevant content disclosed by the two brokerages also shows that the exchange ratio of Haitong Securities and Guotai Junan's A shares and H shares is 1:0.62, that is, every 1 share of Haitong Securities shares can be exchanged for 0.62 shares of Guotai Junan shares. In the eyes of industry insiders, the two-word A-share stocks of the two brokerages have a one-word limit and a huge number of closed orders, which means that the market is unanimously bullish, and there may be a trend in the future.
Image source: Straight Flush iFinD
The resumption of trading rose sharply
After nearly a month of suspension, the market rose sharply at the opening. On October 10, Haitong Securities and Guotai Junan resumed trading, and H-share stocks opened 134.35% and 106.17% higher respectively, and A-share stocks closed the daily limit and continued until the morning close. As of the close of the morning, Haitong Securities and Guotai Junan's H-share stocks rose 102.37% and 68.99% respectively, and the A/H premium rate reached 44.6% and 33.12% respectively.
Previously, due to the planning of major asset restructuring, Guotai Junan, Haitong Securities A shares, and H shares have been suspended since September 6. During the suspension period, the A-share CSI All-Index Securities Index rose by 47.46%. On October 9, the two companies simultaneously issued merger and reorganization related plans and joint announcements on the Shanghai Stock Exchange and the Hong Kong Stock Exchange, and planned to resume trading on October 10, 8 trading days earlier than the expected suspension time of the previous A-share announcement on October 22.
On October 9, Guotai Junan and Haitong Securities also issued a plan for Guotai Junan to absorb and merge Haitong Securities through a share swap and raise supporting funds and related party transactions (hereinafter referred to as the "plan"). It is mentioned that Guotai Junan will absorb and merge Haitong Securities by issuing A-shares to all A-share exchange shareholders of Haitong Securities and H-shares to all H-share exchange shareholders of Haitong Securities, and at the same time issue A-shares to raise matching funds.
Specifically, the share exchange ratio between Haitong Securities and Guotai Junan is 1:0.62, that is, every 1 A share of Haitong Securities can be exchanged for 0.62 A shares of Guotai Junan, and every 1 H share of Haitong Securities can be exchanged for 0.62 H shares of Guotai Junan. Guotai Junan's H-share exchange price is HK$7.73 per share on the 60 trading days prior to the pricing reference date, and the H-share exchange price of Haitong Securities is HK$4.79 per share based on the above exchange ratio. In terms of A-shares, Guotai Junan's A-share exchange price was 13.83 yuan/share, and Haitong Securities' A-share exchange price was 8.57 yuan/share.
On the basis of this share exchange and absorption merger, Guotai Junan intends to issue no more than 10 billion yuan of A-shares to the controlling shareholder Shanghai State-owned Assets Management Co., Ltd. to raise matching funds. The controlling shareholder increased its holdings of Guotai Junan shares with net assets per share, which was higher than the stock price before the suspension, and promised not to reduce its holdings within 5 years.
Guo Shiliang, a financial commentator, said that the trend of Guotai Junan and Haitong Securities' A-share stocks has a one-word daily limit, as well as a huge number of closed orders, which means that the market is unanimously bullish, and there may be a trend in the future.
A strong combination
From the date of the merger and closing, the surviving company after the merger will inherit and undertake all the assets, liabilities, business, personnel, contracts, qualifications and all other rights and obligations of Haitong Securities; After the closing date, Guotai Junan will go through the industrial and commercial change registration procedures related to the company name and registered capital, and Haitong Securities will cancel its legal personality. After the merger, the company will adopt a new company name, and take a series of measures to establish a new corporate governance structure, management structure, development strategy and corporate culture in accordance with the applicable laws and regulations at that time and the specific circumstances of this merger.
It is worth mentioning that Tianyancha intellectual property information shows that in September this year, Guotai Junan applied for registration of 20 related trademarks such as "Guotai Haitong", "Haitong Guotai", "Haitong Guojun" and "Guotai Junan Haitong", which are internationally classified as financial property management, office supplies, advertising sales, etc., and the current trademark status is pending substantive examination.
The above-mentioned plan also mentions that after the merger, the main business of the surviving company will remain unchanged, and the core competitiveness will be significantly enhanced in terms of capital strength, customer base, service capabilities and operation management, and at the same time, it will have a stronger and more stable customer base, more professional and comprehensive service capabilities, and more intensive and efficient operation and management.
From the perspective of business, the merger of the two brokerages is conducive to building an industry leader. According to the data at the end of June 2024, the total assets, net assets attributable to the parent company, and net capital of the two companies after the merger are 1,619.5 billion yuan, 331.1 billion yuan, and 177.2 billion yuan, respectively, ranking first in the industry. According to the annual data of 2023, after the merger, the net income of the company's agency trading business, net income of futures brokerage business, and financial business will all rank first in the industry; The total IPO underwriting volume of the two companies in 2023 ranks first in the industry, leading the second place by more than 50%; After the merger, the company's 2023 public offering revenue and custody outsourcing scale will rank first in the industry.
Some insiders pointed out that the merger will achieve a strong alliance, based on Shanghai's high degree of openness, strong economic vitality, rich industrial resources, strong scientific and technological innovation strength and other good foundations, make good use of first-class financial infrastructure and human resources, but also fully rely on the industry's leading advantages, actively grasp policy opportunities, optimize financial supply, better play the role of direct financing "service provider", capital market "gatekeeper", social wealth "manager", accelerate the development of international competitiveness and market leadership of investment banks. Inject strong impetus into the innovation and development of the capital market and securities industry.
Guo Shiliang said that the merger of the two major brokerages has set off a wave of brokerage mergers, strong alliances, complementary advantages, a good start for other brokerage stocks, it is expected that the future of brokerage stock merger tide will continue to be staged, brokerage asset restructuring to release reform dividends, stimulate stock prices to rise. In the medium and long term, stock prices are mainly affected by performance, and performance is the key to affecting stock prices.
Beijing Business Daily reporter Li Haiyuan