“Direct Hit” Guotai Haitong Performance Conference: Subsidiaries to Aim for “Clear Plans” by Year-End, HuaAn and Haitong Fund Integration to Yield Strong Synergies

Guotai Haitong held its first annual performance conference after the merger on March 31. At this highly anticipated performance conference, Chairman Zhu Jian, President Li Junjie, Vice President, Chief Risk Officer, and Board Secretary Nie Xiaogang, Vice President and Chief Financial Officer Zhang Xinjun, Vice President Han Zida, and other management members responded to market concerns regarding integration progress, merger synergies, balance sheet expansion space, wealth management business development, and subsidiary positioning. Relevant executives stated at the conference that the Guotai Haitong merger has initially achieved a "1+1>2" effect, and there is still room for balance sheet expansion in the future. Chairman Zhu Jian also reminded the market to rationally view the approximately 6 billion yuan negative goodwill profit arising from the merger, emphasizing that building a first-class investment bank is a "marathon." Furthermore, important information such as the integration progress of the company's subsidiaries was also mentioned at this performance conference, including the integration progress and future goals of the two public funds, HuaAn and Haitong. Rationally View "One-Time Gains" Regarding the impressive profits in the first year after the merger, Chairman Zhu Jian specifically reminded investors at the conference of the special factors behind the statements: Guotai Haitong's negative goodwill from the merger in 2025 brought approximately 6 billion yuan in recognized profit after tax, which is not comparable in 2026. He hoped investors would focus more on the growth of net profit attributable to parent company after deducting non-recurring items. Zhu Jian emphasized that in the face of high expectations from all sectors of society for the new company after the merger, the management has a clear understanding. Venturing into and building a first-class investment bank is definitely a marathon-style long-distance run, not a short-term sprint. Compared to international top investment banks with nearly a century of history and deep heritage, and compared to the best practices of domestic leading peers, Guotai Haitong is still very young and has significant gaps. It needs continuous effort and perseverance. It must not only be large in scale but also strong in professional services and excellent in governance structure. He expressed the hope to learn from and surpass peers, advance hand in hand, and jointly contribute to building a stronger investment bank and making more effective contributions to the market, rather than competing for short-term superiority. Grasping "Three Shifts" Amidst "Stable Progress Upward" At the beginning of the "15th Five-Year Plan" period, the market is highly focused on the outlook of the capital market as assessed by leading investment banks. Zhu Jian provided a clear expectation at the conference, believing that China's macroeconomic economy will achieve stable progress with positive advancements and enhanced quality and efficiency. The current policy orientation is also centered around this goal. Against this backdrop, the current emphasis on the capital market is unprecedented. The capital market is expected to achieve new and higher-quality development through further comprehensive deepening of reforms, enhancing resilience and vitality, balancing investment and financing functions, and strengthening the institutional inclusiveness and adaptability of capital market development. Therefore, he believes that a stable and upward market trend is highly probable. Against this backdrop, he proposed that securities companies must achieve "three accelerated shifts." A shift from simply pursuing scale and profit expansion to prioritizing "function first"; a shift from homogeneous operations to differentiated development; and a shift from simple price competition to creating greater value for clients, achieving a win-win for buyers and sellers. This is the future development direction. Seizing the Opportunity of "Deposit Migration" Under the low-interest rate environment and the market hot topic of "deposit migration," wealth management business became a focus of investor inquiries. President Li Junjie revealed the latest highlight data. After several years of high growth, the company's buy-side advisor-managed assets have reached nearly 80 billion yuan, and it continued to grow in the first quarter, with product holding scale exceeding 650 billion yuan and growing rapidly. Facing the strong demand for multi-asset allocation from residents, the company will continue to enhance its value creation capabilities. First, by improving the customer service system; second, by implementing the company's "All in AI" strategy to enhance the efficiency and capabilities of advisor services; and third, by strengthening global asset allocation capabilities. In terms of proprietary and trading business, Vice President and Chief Financial Officer Zhang Xinjun also disclosed impressive data. In 2025, the company seized market opportunities, with net income from trading and investment business reaching 25.4 billion yuan, a year-on-year increase of 72%. The company ranked first in market-making for the STAR Market, and its ETF market-making trading volume has exceeded one trillion yuan. Looking ahead to this year, he believes that the national economic development remains stable and positive, and the foundation for the healthy development of the capital market is constantly solidifying, providing a favorable environment for the company's trading business. Accelerating Subsidiary Integration Zhu Jian stated that in 2026, the company will promote integration and synergy in depth to accelerate the realization of merger efficiencies. The integration at the parent company legal entity level was largely completed in 2025, and the next step is to further deepen integration. At the same time, the company will accelerate the integrated development of various subsidiaries. He also revealed that the China Securities Regulatory Commission has given a 5-year transition period for the integration of type-similar subsidiaries. This transition period can be considered quite long, or not too long, so it is necessary to seize the time to put the integrated development of various subsidiaries on the important agenda. Various subsidiaries are expected to have clear plans and begin implementation in 2026, which will enable the continuous release of the effects of company integration. This will further smoothly and deeply release the synergistic effects and the "1+1>2" efficiency of customer service brought about by integration and synergy, while also promoting it smoothly and orderly. He also mentioned that there are currently two Apps. On the basis of integrating the core trading systems, the migration of App clients is also expected to be smooth. At the same time, the company will further tap the value of existing customers, guided by the promotion of new strategies and culture, to solidly advance the release of potential and value enhancement. HuaAn and Haitong Funds "Complement Each Other" Regarding the integration progress of HuaAn Fund and Haitong Fund (two public funds), which investors are keenly interested in, Vice President and Board Secretary Nie Xiaogang clearly stated that the company is actively promoting the integration development path of HuaAn Fund and Haitong Fund, and has studied various feasible plans, evaluating their respective advantages, characteristics, and complementarity. The company will continue to promote the formulation of relevant plans to facilitate the future development of its public fund business. During the transition period, both companies will resolutely focus on the high-quality development of their main businesses and fulfill their operational responsibilities, which will not affect their core business operations. In terms of evaluation, HuaAn Fund's diversified development strategy has achieved remarkable results, with its gold ETF scale ranking first in the industry. Haitong Fund has performed relatively well in pension asset management, reaching a new historical high in scale. Its bond ETF scale has ranked first in the industry for five consecutive years. Therefore, the two subsidiaries have strong complementarity in business capabilities and license qualifications. He reiterated that the formulation of relevant plans is being accelerated, and all possibilities are being considered. He believes that after the integration of the two subsidiaries, significant synergistic effects will be generated, making them one of Guotai Haitong's most important subsidiaries. Furthermore, in terms of international layout, the company has not only clarified its plan to increase capital to its overseas subsidiaries (having injected HK$3.9 billion into Guotai Haitong Financial Holdings) but will also continue to increase capital subsequently. It also emphasizes that the ROE of overseas businesses is currently significantly higher than that of domestic businesses. Increasing overseas capital injection is a strategic choice and a allocation demand, aimed at better serving "Invest in China" and "China Investment." Maintaining a High Dividend Payout Ratio Regarding dividends and market value management, Nie Xiaogang stated that both the former Guotai Junan, Haitong, and the current Guotai Haitong have always attached great importance to investment returns and have consistently committed to enhancing the company's long-term investment value by building intrinsic value. They utilize regular dividends, mergers and acquisitions, equity incentives, and share repurchases to reflect the company's investment value. In terms of share repurchases, 67.52 million A-shares were repurchased in 2025, with an amount close to 1.2 billion yuan. In terms of dividends, the company adheres to multiple dividend distributions per year, maintaining a high dividend payout ratio, which consistently ranks among the top among leading securities firms. In 2025, the company conducted an interim dividend for the second consecutive year, resulting in a full-year dividend payout of 0.5 yuan per share (tax inclusive). The combined amount of share repurchases and dividends in 2025 accounted for nearly 47% of the net profit after deducting non-recurring items, meaning almost half was returned to investors. Continuously Strengthening Market Value Management The management also stated that in the future, regarding the overall market value management, they will continue to attach importance to and strengthen market value management. On the basis of continuously enhancing intrinsic competitiveness, they will study various methods of market value management, including improving ROE levels and enhancing the core competitiveness of major businesses. Under appropriate circumstances, high-quality balance sheet expansion will also be an effective means of enhancing market value management. In terms of share repurchases, Guotai Haitong will, based on market conditions and the company's financial situation, choose appropriate times and, if necessary, take measures such as share repurchases, without affecting the company's operations. In terms of dividends, the company insists on building a long-term, stable, and sustainable shareholder value return mechanism, enhancing the stability, continuity, and predictability of dividends, adhering to multiple dividend distributions per year, and maintaining a high dividend payout ratio. Addressing market concerns about the leverage ratio and balance sheet expansion space of leading securities firms, Zhang Xinjun provided some solid data. In 2025, the company's leverage ratio reached 4.62 times, and its lent funds exceeded 250 billion yuan (an increase of over 40% year-on-year). Zhu Jian further added that the total credit line for the new company can exceed the simple sum of the former Guotai Junan and Haitong. Currently, the total credit lines from major counterpart banks, both domestic and foreign, for the company's various entities significantly exceed the sum of the individual credit lines of the former Guotai Junan and the former Haitong. Additionally, as assets grow, the cost of debt can be further reduced. Before the merger, Guotai Junan's leverage had already exceeded 4.8 times, even reaching 5 times. There is still room for balance sheet expansion. Risk Disclosure and Disclaimer Markets are risky, and investment requires caution. This article does not constitute personal investment advice, nor does it consider the specific investment objectives, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are suitable for their specific circumstances. Investment based on this is at the user's own risk.