Shareholders' meeting passed, Guolian Securities and Minsheng Securities "efficiently integrated" to take another step

Less than a month since the acquisition plan was announced, Guolian Securities has made further progress in acquiring Minsheng Securities. On September 4th, Guolian Securities announced that according to the resolutions of the first extraordinary general meeting of shareholders in 2024, all proposals and sub-proposals related to the acquisition of Minsheng Securities have been approved. The proposal was put forward on August 8th this year, when Guolian Securities announced its intention to acquire 99.26% of Minsheng Securities' shares for a total price of 29.492 billion yuan through the issuance of shares and other means. It is worth mentioning that the remaining 0.74% of shares not yet acquired are pledged and frozen shares held by the FANHAI Group, which will not participate in the transaction and will not affect the overall acquisition. Based on the pricing of 29.492 billion yuan for the acquisition of 99.26% of Minsheng Securities' shares as proposed in the "Draft", the corresponding reference total value of Minsheng Securities is 29.712 billion yuan, equivalent to a PB ratio of approximately 1.86 times. According to Wind data, Minsheng Securities achieved operating income of 3.799 billion yuan and a net profit attributable to the parent company's shareholders of 681 million yuan in 2023; while during the same period, Guolian Securities achieved operating income and net profit attributable to the parent company's shareholders of 2.955 billion yuan and 671 million yuan, respectively. As of the end of 2023, Minsheng Securities had net assets and total assets of 15.828 billion yuan and 599.42 billion yuan, respectively; while Guolian Securities had net assets and total assets of 18.124 billion yuan and 87.129 billion yuan during the same period. Based on the above data estimates, the combined net assets of the two securities firms at the end of the previous year had already reached 33.952 billion yuan, surpassing the 24th place in the industry ranking by Guojin Securities; while the total assets were close to 150 billion yuan, surpassing Zhejiang Securities at the time to rank 22nd in the industry. According to the procedures, Guolian Securities will submit relevant materials to the exchange within 3 working days after the shareholder meeting resolution date, and the integration of the two securities firms is entering the final stage of regulatory review. An insider close to Guolian Securities revealed that the efficient progress of this acquisition is mainly due to two factors. "On the one hand, this transaction requires approval from the Jiangsu Provincial State-owned Assets Supervision and Administration Commission. The speed of approval can be so fast, showing the supportive attitude of the Jiangsu Provincial State-owned Assets towards this merger and acquisition," the aforementioned insider close to Guolian Securities pointed out. "On the other hand, the shareholders of Guolian Securities also have a good expectation for this transaction and have reached a consensus." Another investment banker close to the transaction pointed out that since securities industry integration often requires prior communication with regulators, with sufficient preparation, it is expected that the relevant regulatory review will be relatively efficient. "Because securities industry integration is currently encouraged by regulators and the industry, and is also a measure to achieve industry consolidation and accelerate supply-side reforms, it is expected that this transaction will be relatively efficiently promoted without any special variables," the investment banker mentioned. In fact, the expectations for the consolidation of the securities industry, which is currently operating at the bottom, are indeed accelerating. Since last year, cases such as "Ping An + Founder", "Pacific Securities + Huachun Securities", "Guolian + Minsheng", "Zhejiang Securities + Guodu Securities", and even recent cases like "Western Securities + Guorong Securities" and "Guosen + Wanhe" have been quietly advancing In the industry's view, the implementation of relevant integration cases will further heat up the wave of securities firms' integration. "At present, it is the bottom of the industry. Promoting industry integration against the cycle actually helps to increase industry concentration and promote high-quality development of the industry," said a non-bank financial analyst at a medium-sized securities firm in Beijing