Ant Consumption Gold's 22 billion capital increase plan was blocked: China Cinda suddenly announced that it would abandon its equity subscription

Economic Observation Network reporter Wang Qing Chongqing Ant Consumer Finance Co., Ltd. (hereinafter referred to as "Ant Consumption Gold") capital increase encountered new variables.

Less than a month after the announcement of a large capital increase, China Cinda (01359. HK), announced on January 13 that the company intends not to participate in its new round of equity subscription after further commercial deliberation.

According to the announcement, the company, as one of the subscribers to the capital increase, entered into an equity subscription agreement with the target company (i.e. Chongqing Ant Consumer Finance Co., Ltd.), other capital increase subscribers and other existing shareholders. According to the share subscription agreement, the target company will issue an additional registered capital of RMB 22 billion to all capital increase subscribers. Among them, the company will invest RMB6 billion to subscribe for 20.000% of the shares of the target company in cash.

After further commercial and prudent consideration, the Company intends not to participate in the share subscription after consultation with the target company, and the equity subscription agreement referred to in the announcement will not be submitted to the company's general meeting of shareholders for consideration. Non-participation in the share subscription will not have a material adverse effect on the Company's operating and financial condition.

In this regard, some market analysts believe that this move may be china cinda out of investment concentration and focus on the main business considerations. If it further participates in the capital increase subscription, its investment in the single target company of Ant Consumption Gold will be relatively concentrated. More importantly, in the past two years, the core requirements of the regulatory authorities for AMC (financial asset management companies) have also focused on the main business of financial asset management.

After the IPO was suspended in 2020, the consumer financial credit products represented by Ant Group's "Huabei" and "Borrowing" were all included in the rectification plan.

In June 2021, Ant Consumption Gold was approved to open for business, and in November of the same year, "Huabei" and "Borrowing" were integrated and became the exclusive consumer financial credit products of Ant Consumption Gold.

According to Dai Zhifeng, chief analyst of the banking industry and head of the financial team of Zhongtai Securities, the overall scale of Huabei and Borrowing is 1.7 trillion yuan (as of the end of June 2020), and it is estimated that 30 billion registered capital can leverage the scale of 1 trillion yuan, and Ant Consumer Finance needs about 51 billion registered capital to undertake the stock scale.

On December 24, 2021, Ant Consumption Issued an additional registered capital of 22 billion yuan to all subscribers of the capital increase, and the registered capital will be increased from 80 yuan to 30 billion yuan after the completion of the capital increase.

Among them, the two original shareholders of Ant Group and Yuyue Medical added registered capital of 11 billion yuan and 1.0978 billion yuan respectively, and China Cinda, Shunyu, Boguan Technology and Yufu Capital added registered capital of 6 billion yuan, 1.8 billion yuan, 1.3222 billion yuan and 780 million yuan respectively.

After the completion of the capital increase, Ant Group holds 50% of the shares, becoming the largest shareholder; China Cinda and its Nanyang Commercial Bank hold a total of 24% of the shares, becoming the second largest shareholder; the remaining shareholders are Sunny Optics, Yuyue Medical, Boguan Technology, Cathay Shihua, Yufu Capital, Ningde Times, Qianfang Technology, and China Huarong.

At that time, China Cinda said that under the background of growing consumer demand and increasingly perfect regulatory system, the scale of the consumer finance industry continued to expand, and the use of financial technology made technology drive financial innovation. The directors believe that Ant Consumption Gold has investment value by virtue of financial technology empowerment, relying on business scenarios and customer traffic.

According to public information, China Cinda was formerly known as China Cinda Asset Management Company, which was established on April 19, 1999, and was also the first financial asset management company established in China, and was listed on the main board of the Hong Kong Stock Exchange in December 2013.

Response:

Chongqing Ant Consumption Gold Company: Respect Cinda's business decision-making Will determine the new capital increase plan as soon as possible to implement rectification

After China Cinda announced that it intended not to participate in the new round of equity subscription of Chongqing Ant Consumption Gold Company, Chongqing Ant Consumption Gold Company said it respected investors' business decisions. The company said that under the guidance of the regulatory authorities, it will actively consult with investors from all sides and continue to determine a new capital increase plan as soon as possible in accordance with the principle of marketization to ensure that the rectification of consumer credit business is in place.