Yusys Technologies "rubs on" the concept of debt, and Baidu "sits on" to enjoy the wealth of the sky?

After the press conference of the Ministry of Finance, the topic of chemical debt quickly detonated the market, and Yusys Technologies, as one of the bank's IT solution providers, became the first batch of beneficiaries, which also made the company's stock price rise all the way, and Baidu, as the company's third largest shareholder, also benefited a lot.

The high popularity of chemical debt has driven a number of related enterprises, and Yusys Technologies is one of them.

On October 12, at the press conference of the State Council Information Office, the topic of Minister of Finance Lan Fo'an's topic on chemical debt quickly detonated market enthusiasm, and unexpectedly, Yusys Technology in the financial IT track became a "big winner" with an announcement.

According to the announcement issued by Yusys Technologies, on October 8, Yusys Technologies and Fujian AMC Xiamen Asset Management established a joint venture company to participate in the disposal of non-performing assets by using the company's financial technology attributes. Affected by this news, the company's stock price rose sharply.

Yusys Technology's outstanding performance in the secondary market has undoubtedly made the company's shareholders a lot of money, as one of its "old partners" Baidu. Even without considering dividends and the previous cash-out of more than 100 million, the market value of Baidu's current holdings of Yusys Technology shares still exceeds its original investment of 600 million.

Yusys Technologies, which took the "fast train" of chemical debt

After the fermentation of the weekend, the concept of chemical debt quickly detonated the market.

Last Saturday, at the press conference of the State Council Information Office, Minister of Finance Lan Foan introduced the relevant situation of "increasing the countercyclical adjustment of fiscal policy and promoting high-quality economic development", including the incremental policy of supporting local governments to resolve government debt risks.

At the meeting, Minister of Finance Lan Foan announced a major favorable policy, planning to replace the hidden debt of local governments by increasing the debt limit, providing strong support for resolving debt risks.

At the same time, expressions such as "it is proposed to increase the limit of large-scale debt at one time to replace the stock of implicit debt of local governments" and "one of the measures with the greatest support for debt introduced in recent years" have also attracted the attention of all parties.

The sudden good news also allowed Yusys Technology, which happened to start the layout in this field, to catch the "fast train". According to the announcement released by Yusys Technologies on October 8, the company signed the "Strategic Cooperation Agreement between Beijing Yusys Technology Group Co., Ltd. and Xiamen Asset Management Co., Ltd." with Xiamen Asset Management on December 20, 2023.

Yusys Technology has also attracted the attention of many investors, according to the flush data, on October 14, Yusys Technology achieved a 20cm limit, on October 15, once a limit, and then fell to a certain extent, as of the close of 25.88 yuan / share, an increase of 15.38%. So far, Yusys Technology has soared 131.7% in the past 11 trading days.

For Yusys Technologies, the field of chemical debt is undoubtedly a big cake. After combing through the content of the announcement, it can be seen that since January 2021, the China Banking and Insurance Regulatory Commission has begun to pilot the transfer of non-performing loans, allowing the transfer of non-performing assets of a single household to public and individual batches, providing policy support for the transfer and circulation of non-performing assets of personal loans.

In December of the following year, the policy was further relaxed, expanding the scope of pilot institutions and increasing the liquidity of the market. In this context, in 2023, the transaction volume of the batch transfer business of personal non-performing loans will increase significantly, with the number of listings and transactions, the number of non-performing loans involved, the total outstanding principal and principal and interest all increasing significantly, and the total transfer price will also reach 4.644 billion yuan.

By September 2024, the number of institutions involved in the transfer of non-performing loans has expanded to 958, including banks, asset management companies, consumer finance companies, auto finance companies, financial leasing companies, trust companies and other types of financial institutions.

A series of data after the start of the pilot work show that the non-performing personal loan market has gradually shown its huge potential and broad prospects, and the number of pilot business institutions and accounts has continued to expand, becoming a new market with a scale of over one trillion yuan with potential opportunities.

In order to further capture the market demand, Yusys Technologies chooses to use technology services to help the personal loan non-performing asset disposal business market, and intends to participate in the transfer, revitalization and resolution of the personal loan non-performing asset disposal business process through the integration of multiple technologies and related products such as artificial intelligence, big data, and cloud platform with the business.

Baidu behind stealth

More than four years after taking a stake in Yusys Technology, Baidu has enjoyed this wave of soaring stock prices.

On January 7, 2020, Yusys Technologies announced that it had received a strategic investment from Baidu. At that time, the two sides said that they would cooperate in key areas such as financial cloud, big data, artificial intelligence, and blockchain, promote the large-scale implementation of cloud + AI in the financial industry, and accelerate the intelligent upgrading of the financial industry.

According to the content of the Share Purchase Agreement signed by related parties such as Yuanchuang Gene and Everbright Gene, Baidu acquired 15410227 shares held by Yuanchuang Gene and 7446915 shares held by Everbright Gene at a price of 600 million, that is, a total of 22857142 shares of listed companies, accounting for 5.71% of the company's total share capital.

Due to Yusys Technology's 2021 distribution plan of 2.7 yuan for every 10 shares and 10 additional shares, Baidu's shareholding has become 36.5714 million shares, so its shareholding cost has also decreased.

In November 2022, Baidu reduced its holdings of 1,016,900 shares of Yusys Technology shares (accounting for 0.14301% of the company's total share capital) through block trading, and according to the disclosed information, the average price of its reduction was 16.2 yuan per share, and it successfully cashed out about 16.47 million yuan.

From February 6, 2023 to February 10, 2023, Baidu reduced its holdings of 6,094,100 shares of the company (accounting for 0.8570% of the company's total share capital) through block trading.

Specifically, Baidu reduced its holdings by 2 million shares at a price of 16.74 yuan per share, 2.5 million shares at a price of 17.61 yuan per share, 1 million shares at a price of 17.47 yuan per share, and 594,000 shares at a price of 16.97 yuan per share, totaling about 105 million yuan.

In addition, from 2020 to 2024, Yusys Technologies will pay dividends once a year, with 10 distributions of 1.5 yuan, 10 distributions of 2.7 yuan, 10 distributions of 2 yuan, 10 distributions of 1.4 yuan, and 10 distributions of 2 yuan.

Combined with the shares held by Baidu in each dividend period, a simple calculation can show that Baidu benefited 3.43 million, 6.17 million, 7.31 million, 3.58 million and 5.12 million respectively, totaling 25.61 million.

This means that up to now, Baidu has made a profit of more than 140 million through dividends and cash-out, so far, Baidu still has 25.6 million shares of Yusys Technology, the third largest shareholder of the company, accounting for 3.64% of the company's total share capital.

Combined with the closing price of 25.88 yuan per share of Yusys Technology on October 15, the value of Yusys Technology shares still held by Baidu is about 663 million, exceeding its initial investment.

In fact, the cooperation between Baidu and Yusys Technologies does not stop there, in 2023, Yusys Technologies will become the first batch of ecological partners of Baidu Wenxin Yiyan, giving priority to internal testing experience and access to the comprehensive capabilities of "Wenxin Yiyan", and working with Baidu to create the first application of "Wenxin Yiyan" in financial business scenarios.

For Yusys Technologies, Baidu is not only a shareholder, but also an important partner. At the same time, under the layout of Hong Weidong, the founder of Yusys Technologies, the company is developing in a more diversified direction.

Hong Weidong's diversified layout

Yusys Technologies began to diversify its layout early.

In 1990, at the age of 24, Hong Weidong graduated from the Department of Automation of Tsinghua University and worked for Seacom (China) Co., Ltd. for several years. It wasn't until 1999 that Hong Weidong decided to give up a stable job and a good salary to start his own financial IT service company. In 1999, he founded Beijing Yusys Hongtai Technology Development Co., Ltd. (the predecessor of Yusys Technology) and served as CEO.

According to public information, Yusys Technologies has gradually developed from a hardware system supplier in the early stage of its business to a comprehensive financial IT service provider, providing comprehensive financial products and solutions for the banking industry, and at the same time has comprehensive capabilities in consulting, implementation and operation and maintenance IT in-depth service provider, and is now one of the largest financial technology solution market leaders in China.

Yusys Technologies became the first Chinese fintech company to be listed on the NASDAQ in March 2007, and although it was later privatized and delisted, in 2018, Hong Weidong successfully led the company to the A-share Growth Enterprise Market.

It is worth mentioning that the company has acquired a number of high-quality enterprises in the form of equity participation and holding, and established a joint venture with 3i Infotech Group, one of the four major software providers in India, in 2008, taking the step of international development, and forming strategic partners with many internationally renowned companies such as Huawei, IBM, HP, and Oracle.

Hong Weidong, who has "pulled Yusys Technologies big" all the way, is naturally well versed in the essentials of enterprise development, so while deepening cooperation with Baidu, the company also signed a HarmonyOS ecological cooperation agreement with Huawei. The two parties will focus on HarmonyOS NEXT's native application development, compatibility and adaptation, ecosystem cooperation, and market expansion in financial business scenarios. At present, the company is not only the ecological market service provider of Huawei Developer Alliance, but also the first batch of HarmonyOS development service providers.

At the same time, thanks to Hong Weidong's diversified layout, in the research and development of LLM large model applications, 24H1 Company has completed the docking of various large model products, and built a large model capability platform, on this basis, it has completed the research and development of the intelligent Q&A platform from 0 to 1, and has begun to deeply integrate with various business scenarios such as employee assistants and agent assistants in the financial industry.

In addition, the recent explosion of cross-border payment is also one of the areas of Yusys Technologies' layout. The company's products and businesses have participated in the CIPS system, and in the past few years, there have been relevant cases and experience, and have successfully supported a number of commercial banks and related financial institutions to access the CIPS system, as well as business logic processing templates in commercial banks.

With the spread of Hong Weidong's diversified layout, the company's performance may be further improved.