The Zhitong Finance App learned that on April 25, the State Council issued a report on the research, processing and rectification of the opinions on the review of the special report on the management of state-owned assets of financial enterprises. The report shows that efforts are being concentrated to build a “national team” for the financial industry. Research and draft action plans to strengthen the management of state-owned financial capital, promote large-scale state-owned financial enterprises to target world-class financial enterprises, highlight their main business, improve their expertise, and continuously enhance their competitiveness and international influence. Research and formulate guiding opinions to promote high-quality development in the insurance industry, etc., and promote the standardized development of non-bank financial institutions. Promote leading securities companies to become stronger and better, and support the Shanghai and Shenzhen stock exchanges to build world-class exchanges.

On the same day, Guolian Securities issued an announcement stating that the company is currently planning a major asset restructuring plan involving the acquisition of control of Minsheng Securities by issuing A-shares and raising supporting capital at the same time. The deal is still in the planning stage and is expected to constitute a major asset restructuring. Following the application, trading of the company's shares will be suspended from the opening of the market on April 26. It is expected that trading will not be suspended for more than 10 trading days.

In fact, the upper management has repeatedly pushed leading brokerage firms to become better and stronger. In October 2023, the Central Financial Work Conference first proposed the mission goal of “cultivating first-class investment banks and investment institutions”. In November of the same year, the Securities Regulatory Commission stated that it would support leading securities companies to improve and strengthen through business innovation, group management, mergers, acquisitions and restructuring, etc., to build first-class investment banks, and play an important role in serving the main force of the real economy and maintaining financial stability.

Recently, Article 5 of the new “National Nine Rules” issued by the State Council mentions “promoting the high-quality development of securities fund institutions”, “supporting leading institutions to enhance their core competitiveness through mergers, acquisitions, restructuring, organizational innovation, etc., and encouraging the differentiated development and characteristic operation of small and medium-sized institutions.”

As regulatory policies and related documents continue to be introduced, the atmosphere of mergers, acquisitions and restructuring in the securities industry is heating up. The acquisition of Minsheng Securities by Guolian Securities also means that the securities restructuring led by this major policy has officially begun.

According to market movements, apart from the restructuring of Guolian Securities and Minsheng Securities, combinations such as “Zheshang+Guodu,” “Huachuang+Pacific,” and “Fangzheng+Ping An” are all continuing to advance.

Shen Bing, director of the Securities Regulatory Commission's agency department, said that at present, there are 43 listed securities companies in China, with total assets accounting for 77% of the entire industry. In 2023, operating income and net profit account for 70% and 77% of the industry, respectively. Scale and strength play an important role in the industry. However, judging from recent regulatory practices, listed securities companies are still facing the problem of “big but not strong”, and there is still a big gap from the standards and requirements of top investment banks and investment institutions in terms of development philosophy, investor protection, internal control and governance, and information disclosure.

Guotai Junan Securities pointed out that industry integration is expected to accelerate, and it is expected that the introduction of policies will be more beneficial to leading brokerage firms that operate in a professional and compliant manner. The “Nine Rules of the New Country” will strengthen supervision, push the securities fund industry back to its roots, and support leading institutions to enhance their core competitiveness through mergers, acquisitions, restructuring, and organizational innovation. Industry integration is expected to accelerate, which will further benefit leading brokerage firms with specialized capabilities and compliant management.

GF Securities believes that in the context of a stricter regulatory environment, brokerage mergers and acquisitions have become the focus of market attention. In addition to small and medium-sized brokerage firms themselves seeking breakthroughs and development, if the central and local levels guide or promote the integration and acquisition of affiliated securities companies, it is expected to drive the evolution of the industry pattern.

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CITIC Securities (06030): The company is mainly engaged in investment banking, wealth management, asset management, financial markets and other related financial services. The company was awarded the title of “2018 Best Investment Bank” by Euromoney in 2018. In 2018, the company received the Best Broker, “Belt and Road” Best Bank, Best Securities Underwriter, Best Equity Securities Issuer, Best M&A Deal Award, and Best Corporate Bond Award from Finance Asia.

CICC (03908): The company is the first Sino-foreign joint venture investment bank in China, providing comprehensive, one-stop comprehensive investment banking services for domestic and foreign enterprises, institutions and individual customers. The company has a comprehensive and balanced business structure including investment banking, stock business, fixed income business, investment management business, wealth management business and research business. The company has repeatedly won awards such as “China's Best Investment Bank”, “Best Sales Service Team”, and “Most Influential Research Institution” in well-known media such as “Asian Finance”, “Institutional Investors”, and “Asian Money”.

Haitong Securities (06837): The company's main business includes wealth management, investment banking, asset management, trading and institutions, financial leasing, etc. In the first half of 2023, Haitong Kaiyuan won awards such as “2022 Best Private Equity Investment Institution No. 18”, “2022 Top 10 Best Private Equity Fund Subsidiaries in China”, and “China's Best Investment Institution in the Field of Integrated Circuits and Semiconductors for the Year 2022 to 2023”.

Guolian Securities (01456): Guolian Securities is planning to acquire control of Minsheng Securities and raise supporting capital by issuing A-shares.