Since resuming trading on October 10, $Guotai Junan (601211.SH)$Please use your Futubull account to access the feature.$Haitong (600837.SH)$ it has hit the limit up for two consecutive days. In the Hong Kong stock market $GTJA (02611.HK)$ it surged more than 55% in a single day. $HAITONG SEC (06837.HK)$ Increased by over 95%.

On the evening of October 11th, both companies simultaneously released announcements on the abnormal fluctuations in stock trading. Following a self-examination by the companies and written confirmation to the shareholders, it was confirmed that apart from the disclosed planned share swap absorption and merger of Haitong Securities by Guotai Junan and related fundraising, there were no other significant undisclosed information.

Both companies remind investors to pay attention to market trading risks, make rational decisions, and invest cautiously.

Resuming trading with two consecutive daily limit up movements, announcements from Guotai Junan and Haitong Securities.

Guotai Junan issued an announcement on the abnormal fluctuations in stock trading. Following a self-examination by the company and written confirmation to the controlling shareholder and actual controller, Shanghai International Group Co., Ltd., it was confirmed that apart from the already disclosed planned share swap absorption and merger of Haitong Securities and related fundraising, there were no other significant undisclosed information.

Haitong Securities' announcement stated that, following a self-examination by the company and written confirmation to the largest shareholder, Shanghai Guosheng (Group) Co., Ltd., as of the date of this announcement, apart from the disclosed planned share swap absorption and merger with the Guotai Junan and related fundraising, there were no other significant undisclosed information.

The closing prices of Guotai Junan and Haitong Securities A-share stocks had cumulative deviation values exceeding 20% on October 10th and 11th, two consecutive trading days. According to the relevant rules of the Shanghai Stock Exchange Trading Rules, this situation falls under abnormal fluctuations in stock trading. Both companies advise investors to pay attention to market trading risks, make rational decisions, and invest cautiously.

Haitong Securities and Guotai Junan also stated that they operate in the capital market service industry, and their business operations are highly correlated with the macroeconomic environment and capital market trends. Changes in macroeconomic policies, macroeconomic performance, adjustments in securities industry regulations, and fluctuations in the capital market will all impact the companies' operational performance, prompting investors to pay attention.

Strong alliances, complementary advantages, and equal mergers.

Recently, the much-anticipated merger and reorganization of gtja and haitong securities has made significant progress. On October 9, the merger and reorganization plan of gtja and haitong securities was released, and trading is set to resume on October 10.

According to the information received by the Securities Times, in this transaction, based on the principles of strong alliance, complementary advantages, and equal merger, Guotai Junan will absorb and merge Haitong Securities by stock swap. After the merger, the company will further strengthen its functional positioning, take serving the construction of a financially strong country and Shanghai International Financial Center as its responsibility, benchmarking international first-class standards, and accelerate towards becoming an investment bank with international competitiveness and market leadership.

According to the merger plan, the exchange price for gtja's A shares is ¥13.83 per share, and for haitong securities' A shares, it is ¥8.57 per share. The exchange ratio between haitong securities and gtja is 1:0.62, meaning every 1 share of haitong securities can be exchanged for 0.62 shares of gtja shares of the same class. In addition, dissenting shareholders of gtja meeting the conditions will be provided with the right to request acquisition, while dissenting shareholders of haitong securities meeting the conditions will be provided with the option of cash, with prices based on the highest trading price of A shares and H shares of the last 60 trading days before the board of directors' announcement date, fully reflecting the protection of small and medium shareholders.

It is worth noting that based on this exchange merger, gtja plans to issue no more than 10 billion yuan of A shares to its controlling shareholder, Shanghai State-owned Assets Operation Co., Ltd., to raise matching funds. The controlling shareholder aims to increase its holdings of gtja shares by net asset value per share, above the pre-suspension stock price, and commits not to reduce holdings within 5 years.

Donghai Securities' chief non-banking analyst Tao Shengyu pointed out that the starting point of this merger and reorganization is to build a first-class investment bank under the strategy of a financially strong country and the promotion of the construction of the Shanghai International Financial Center. There are still three stages of tasks to be completed, including completing corporate governance procedures, involving further deliberation by the board of supervisors, board of directors, employee representative assembly, and shareholders' general meeting; regulatory review, including reviews by the Shanghai Stock Exchange, Hong Kong Stock Exchange, and the securities regulatory authorities in both places; and trade settlement, further completing the merger, new stock issuance, and raising matching funds.

"Under the top-level design, the efficiency of business advancement is expected to improve, as evidenced by the unexpectedly rapid progress of the proposal in just one month. The accelerated pace of the subsequent process is worth looking forward to. In addition, regarding the market's focus on 'one stake, one control, one license,' the short-term focus remains on the development of their respective businesses, and there will be a certain transitional arrangement for future resource integration." Tao Shengyu stated.

Shanxi Securities' non-banking analyst Liu Li believes that the securities industry sector is currently influenced by three driving forces: the market's own oversold rebound under a combination of policies; improved market sentiment and trading activity under bull market expectations leading to better business performance; and the expectation of mergers and reorganizations under the creation of a first-class investment bank in the industry. Therefore, both companies are expected to have room for upward adjustment after resuming trading.

China International Capital Corporation believes that the merger of GTJA and Haitong Securities as the first A+H listed brokerage in the securities industry may serve as a template for potential future industry consolidation, or may help accelerate industry supply-side reform.

Editor/Somer