① Dalian Jinyun surpassed Dalian Wanda Group's shareholding and became the largest shareholder of Centennial Life; ② After this capital increase and share transfer, Centennial Life still had 17 shareholders, and the equity structure was scattered; ③ At the end of the first quarter of 2023, Centennial Life's net assets had fallen to -420 million yuan and was insolvent.
Financial Services Association, May 8 (Reporter Xia Shuyuan) Taking advantage of the “low altitude economy,” Wanfeng Aowei (002085.SZ), as a flying car concept stock, has been bought by a large number of investors, yet insurance capital took the opportunity to reduce its holdings at a high level when its stock price soared.
According to the latest announcement, Centennial Life, the second largest shareholder of Wanfeng Aowei, recently reduced its holdings of the company's shares by 9 million shares through a centralized bidding transaction. According to reports, the average price of this holdings reduction was 1,488 yuan/share, and 100 Years Life has cashed out 134 million yuan at a high level.
According to statistics from the Financial Federation reporter, since 2023, Centennial Life has frequently reduced its stock holdings of many listed companies and returned funds. It is worth noting that at a time when heavy stock holdings are being reduced frequently, Centennial Life has implemented its first capital increase in 8 years. With local state-owned assets taking over, can Centennial Life, which is already seriously insolvent, overcome difficulties and usher in a new turning point?
Centennial Life reduced its holdings of Wanfeng Aowei and cashed out hundreds of millions of yuan. Since 2023, it has frequently divested its heavy holdings
According to Wanfeng Aowei's latest announcement, Centennial Life reduced its holdings of Wanfeng Aowei by 9 million shares from April 24 to 29, at an average price of 14.88 yuan/share. The reduction ratio was 0.42%, and the estimated reduction amount reached 134 million yuan.
After this round of holdings reduction, Centennial Life's shareholding ratio in Wanfeng Aowei fell to 8.44%, and the corresponding market value of shares held was 2,937 billion yuan.
In response to the reason for this holdings reduction, Wanfeng Aowei said it was based on Centennial Life's asset allocation requirements and related investment decisions.
According to reports, Centennial Life has held shares in Wanfeng Aowei for close to 9 years. In 2015, Centennial Life “held a license” to buy about 5% of Wanfeng Aowei's shares, then gradually increased its positions.
Wanfeng Aowei's 2024 quarterly report shows that by the end of March, 100 Years Life occupied two seats among the top five shareholders of the company. Among them, Centennial Life Insurance Co., Ltd. - Traditional Insurance Products ranked as the company's second largest shareholder, with a shareholding ratio of 6.78%; Centennial Life Insurance Co., Ltd. - Dividend Insurance Products was the fourth largest shareholder of the company, with a shareholding ratio of 2.09%.
In fact, in addition to Wanfeng Aowei, Centennial Life also frequently reduced its holdings of other heavy stocks.
Specifically, as of the first quarter of 2023, 100 Years Life's long-term equity investment shares include Jiazawa New Energy and Macalline.
On November 2, 2018, according to an announcement issued by Jiazawa Xinneng, due to the completion of liquidation and cancellation of Ningxia Kexinyuan Mining Investment, 100 Years Life allocated 98.3059 million shares of Jiaze Xinneng, with a shareholding ratio of 5.0857%.
As of the third quarter of 2023, 100 Years Life's shareholding ratio in Jiaze Xinneng has dropped to 4.04%.
Red Star Macalline's 2023 annual report shows that products under Centennial Life have withdrawn from the top ten shareholders of Macalline. At the end of the period, only 12.544,600 shares of shares held in ordinary accounts, credit accounts, and loans were not yet returned.
Furthermore, in January 2024, as a shareholder holding 272 million shares of Shengli Precision (002426.SZ), Centennial Life plans to reduce its holdings of the company's shares by no more than 344.151,000 shares through centralized bidding within 3 months after 15 trading days from the date of disclosure of the announcement.
However, unlike Wanfeng Aowei's strong stock price performance as a “low altitude economy,” the heavy stock stocks mentioned above by Centennial Life have not performed well. Take Jiazawa Xinneng as an example. When Centennial Life “passively listed,” the stock price of Kaze Xinneng was 4 yuan-5 yuan/share. By the close of trading on May 8, the stock price of Jiazawa Xinneng was only 3.49 yuan/share, a drop of more than 15%.
The performances of Red Star Macalline and Shengli Precision were not as good as expected. In 2023, Red Star Macalline's revenue fell by nearly 20%, and net loss exceeded 2.2 billion yuan. The performance forecast shows that Shengli Precision's losses will expand further in 2023, with an estimated loss of 750 million to 950 million yuan.
After 14 years, net operating assets fell to -420 million yuan. Can the insolvent Centennial Life get out of trouble?
Centennial Life was founded in 2009 and is headquartered in Dalian. It is the first Chinese life insurance legal entity in Northeast China. Its initial sponsors include Dalian state-owned enterprises, Guodian Electric Power, Dongfang Asset Management, and Huaxin Trust.
Five years before establishment, 100 Years Life had a total loss of 1,694 billion yuan. From 2014-2015, Dalian Wanda Group gradually increased its holdings of Centennial Life by taking over shares transferred by Guodian Electric Power and other companies, becoming the company's largest shareholder holding 11.55% of the company's shares. Since then, Centennial Life began turning a loss into a profit.
According to financial data, in 2015-2021, Centennial Life's net profit was 32 million yuan, 207 million yuan, 351 million yuan, 697 million yuan, 223 million yuan, 802 million yuan and 588 million yuan, respectively.
It is worth noting that in 2022, Centennial Life's performance declined sharply, with losses reaching 2,709 million yuan. Net assets also plummeted from 8.166 billion yuan at the end of the fourth quarter of 2021 to 323 million yuan at the end of the fourth quarter of 2022, a one-year contraction of 96%.
Industry insiders said that aggressive insurance product design has led to a high debt-side withdrawal rate, compounded by investment-side losses, which is the main reason why Centennial Life's liquidity is under pressure.
According to the joint credit evaluation analysis, from the investment side, in 2022, due to a sharp decline in interest income from bonds and realized returns on stocks, the scale of 100 Year Life's investment income declined markedly; at the same time, due to the large scale of losses in the fair value of financial assets that can be sold, the equity scale of 100 Year Life owners was greatly eroded.
According to the solvency report, in 2022, Centennial Life's return on net assets was -64.94%, and the return on total assets was -1.11%. In the first quarter of 2023, Centennial Life still did not turn a loss into a profit. It continued to lose 1.05 billion yuan, and its net assets fell further to -420 million yuan, making it completely “insolvent”.
In addition to a sharp loss in net profit and a sharp decline in net assets, Centennial Life is also under pressure to supplement its core capital.
In the first quarter of 2023, Centennial Life's comprehensive solvency ratio and core solvency adequacy ratio dropped to 102.59% and 64.43% respectively, approaching the “red line” of supervision. The comprehensive risk rating was C, making it an insurer with poor solvency standards.
However, regulatory “treatment” also arrived in a timely manner. On May 8, 2024, the Dalian Regulatory Bureau approved a letter of approval and agreed to increase Centennial Life's capital by 110 million yuan and change the registered capital from 7.794.8 billion yuan to 7.904.8 billion yuan.
Meanwhile, the Dalian Regulatory Authority also approved the transfer of 800 million shares held by Dalian Rongda Investment Co., Ltd. to Dalian State-owned Financial Capital Operation Co., Ltd. (hereinafter referred to as “Dalian Jinyun”).
After this capital increase and equity transfer, Dalian Jinyun quickly surpassed the shares held by Dalian Wanda Group and became the largest shareholder of Centennial Life. It is worth noting that, including Dalian Jinyun, Centennial Life still has 17 shareholders.
With the entry of state-owned assets in Dalian and frequent reductions in heavy stock holdings and cash out, can the insolvent Centennial Life get out of trouble?
An industry insider said, “Currently, most shareholders of Centennial Life's housing enterprises are burdened with debt and are in deep trouble. The entry of state-owned assets in Dalian may only be the first step in this risk mitigation work. At present, although Dalian Jinyun has become the largest shareholder, the shareholding ratio is only 11.51%, and the shareholding structure of Centennial Life is still quite scattered.”