Finance Weekly (ID:cjtxzk)
Wen | Shi Sitong
Edited | Sun Yue
The actual controller of Hongkang Life has become chairman Lu Dezhi since the solvency report disclosed in the second quarter of 2018. However, the weekly magazine "Caijing World" reviewed the industrial and commercial information of its shareholders and did not find a clear relationship between these shareholders and Lu Dezhi.
A few days ago, Hongkang Life issued an announcement that due to personal reasons, Lu Dezhi no longer serves as the chairman of the company, a director, and a member of the professional committee under the board of directors, which has once again aroused market attention.
In fact, the situation of Hongkang Life has been intriguing in recent years. Chairman Lu Dezhi became the actual controller for several years without holding shares until this exit; the company's solvency adequacy ratio fell seriously, but the capital increase was repeatedly frustrated, and the capital increase plan was changed 4 times in three years, and there has been no follow-up so far.
And what kind of changes will the change of the chairman bring to Hongkang Life? Market participants believe that this may mean that Hongkang Life will make a move in terms of equity in the future, or it may become an opportunity for it to successfully complete its capital increase.
The chairman of the board of directors was involved in a major corruption case
It is worth mentioning that on January 27, 2022, the anti-corruption feature film "Anti-corruption and Promoting Honesty is Always on the Road" produced by the Hunan Provincial Discipline Inspection Commission was broadcast on Hunan Satellite TV, which told the case of LuPin, secretary of the party group and general manager of Hunan China Tobacco Industry Co., Ltd., who had previously fallen.
After investigation, Lupin violated a number of party disciplines, suspected of accepting bribes of 413 million yuan and embezzling 135 million yuan of public funds, which is the largest amount of money involved in the national tobacco system and job-related crimes in Hunan since the founding of New China. According to the feature film, Lu Dezhi, chairman of Hongkang Life Insurance, was also involved as a key figure.
According to public information, Hongkang Life was established in 2012 with a registered capital of 1 billion yuan, 7 original shareholders, and the legal representative and chairman is Li Anmin. In the three years since its establishment, Hongkang Life has undergone a series of capital increases and equity transfers.
Until June 2015, the shareholding structure of Hongkang Life became: Zhenjiang Herong held 19% of the shares, Zishi Mining held 14.7%, Yaya Oleochemical held 14.5%, Jinpeng Century accounted for 14%, Dinuo Soap Industry accounted for 13.8%, Nantong Fuel and Guangxi Kaiyuan Real Estate accounted for 12%. At that time, Hongkang Life's equity was still relatively dispersed, and there was no actual controller.
In October of the same year, the legal representative and chairman of Hongkang Life was changed from Li Anmin to Lu Dezhi.
According to public information, Lu Dezhi was born in May 1962 and has a doctoral degree. On October 28, 2015, he was approved by the former Insurance Regulatory Commission as the chairman of Hongkang Life Insurance. Since 2008, he has been the chairman of the Huamin Charity Foundation. In addition, Lu Dezhi has another important identity, that is, one of the leaders of the "Xianghui system" capital.
It is worth mentioning that Heilongjiang Zhongbing Mining, one of the original shareholders of Hongkang Life, once had a dispute with Hongkang Life, proposing that Hongkang Life was manipulated by the mysterious actual controller, and this accusation was denied by Hongkang Life.
The actual controller of Hongkang Life, from the solvency report disclosed in the second quarter of 2018, became chairman Lu Dezhi.
However, the weekly magazine "Caijing Tianxia" reviewed the industrial and commercial information of the seven shareholders of Hongkang Life, but did not find a clear correlation between these shareholders and Lu Dezhi.
Until the recent withdrawal of Lu Dezhi from Hongkang Life, Hongkang Life's recently disclosed 2021 4th quarter report showed that its actual controller column once again became "none".
In fact, the change of chairman of Hongkang Life is not without warning. As early as June 2020, Lu Dezhi stepped down as the legal representative of Hongkang Life and was succeeded by Zhou Yuhang, who was only the deputy general manager of Hongkang Life at that time.
According to industry insiders, it is rare for the legal representative to be changed from chairman to deputy general manager, and now it seems that Lu Dezhi's withdrawal may have already been foreshadowed.
On the same day that Lu Dezhi stepped down as legal representative, independent director Sun Jin and directors Sang Liwei, Zhang Yaming, Wei Xueli and others also withdrew, and Sang Liwei and Zhang Yaming were nominated directors by the second and fifth largest shareholders of Hongkang Life, respectively.
Industry insiders believe that this may mean that Hongkang Life will change in equity in the future.
Supervision has tightened, and Hongkang Life's performance has come under pressure
It is understood that Hongkang Life is mainly engaged in Internet insurance, and is praised by the industry as "the most thorough Internet life insurance company", and the main types of insurance include investment-linked insurance and participating insurance. In addition to the headquarters in Beijing, Hongkang Life has only three branches in Henan, Jiangsu and Shanghai.
Perhaps with the strategic advantage of "Internet first", Hongkang Life achieved profitability in the first full year after its establishment, getting rid of the law of "seven flat and eight profits" in the insurance industry. In 2013, the net profit of Hongkang Life was 943,800 yuan, and the operating income exceeded 1 billion yuan.
In the following years, thanks to its betting dividend insurance, investment-linked insurance and bancassurance channels, Hongkang Life's operating income and net profit have maintained an upward trend year by year.
From 2016 to 2019, Hongkang Life achieved operating income of 1.654 billion yuan, 6.675 billion yuan, 7.448 billion yuan and 12.786 billion yuan respectively, and the net profit in the same period was 0.39 billion yuan, 0.79 billion yuan, 166 million yuan and 176 million yuan, respectively, achieving steady growth. However, in contrast, the net profit performance in 2019 was relatively inferior, with only a slight increase of 6.47% year-on-year.
In fact, in recent years, Hongkang Life is facing tremendous pressure and challenges. In 2020, Hongkang Life's operating income fell to 2 billion yuan, while the net profit was only 0.33 billion yuan, both of which shrank by more than 80%, while the insurance business revenue also fell by nearly 35% to 8.258 billion yuan.
Industry insiders pointed out that the sharp decline in the performance of Hongkang Life may have something to do with the tightening of regulatory policies in recent years.
In February 2020, the China Banking and Insurance Regulatory Commission (CBIRC) issued the Notice on Matters Related to Strengthening the Actuarial Supervision of Life Insurance, which strictly adjusted the dividend distribution of participating insurance, clarified the upper limit of the demo interest rate, and unified the dividend distribution ratio to 70%, and the provision was implemented from July of the same year.
Participating insurance is one of the main types of insurance of Hongkang Life, and the impact of this adjustment is self-evident. According to the annual report, in 2019, the top 5 insurance products of Hongkang Life's original insurance premium income were all participating insurance, and the total original premium income reached 11.435 billion yuan, accounting for 90.17% of the company's original premium income. In 2020, only three of the top 5 products in the original premium income accounted for dividend insurance, and the total premium was only 4.603 billion, a contraction of nearly 60%.
Then, with the introduction of new regulations on Internet insurance, Internet insurance sales have also ushered in strong supervision.
In October 2021, the China Banking and Insurance Regulatory Commission (CBIRC) issued the Notice on Further Regulating the Internet Life Insurance Business of Insurance Institutions, which clarifies that insurance companies that have carried out Internet life insurance business should complete the rectification of the existing Internet life insurance business before December 31, 2021, and products that do not meet the conditions are not allowed to operate through Internet channels from January 1, 2022.
At the same time, according to regulatory requirements, the company redefined Internet insurance products. It is clarified that the scope of Internet life insurance products is limited to accident insurance, health insurance (except nursing care insurance), term life insurance, ordinary life insurance with an insurance period of more than 10 years (except term life insurance) and ordinary annuity insurance with an insurance period of more than 10 years.
For Hongkang Life, an "Internet life insurance company" mainly engaged in participating insurance and investment-linked insurance, the situation will undoubtedly be more severe. This means that many of its company's products can not be sold in the Internet channel, industry insiders said that Hongkang Life or will adjust the strategy, the bancassurance channel focus to the force of the traditional generation.
According to the solvency report data, Hongkang Life's insurance business revenue in 2021 was 9.418 billion yuan and net profit was 0.44 billion yuan.
Capital increases have been repeatedly frustrated
On the other hand, with the excessive reliance on bancassurance channels coupled with the aggressive expansion of investment-linked insurance, although the company has ushered in the growth of performance, it is behind the urgency of solvency adequacy ratio.
When Lu De was appointed as chairman, the solvency adequacy ratio of Hongkang Life has declined seriously, and from 2014 to 2017, the company's solvency adequacy ratio was 367.19%, 215.66%, 167%, 123.63%, and has been maintained at about 130% since then until it returned to 162.83% in 2020.
In fact, in order to recover its rapid decline in solvency adequacy ratio, soon after Ludd took office, Hongkang Life began to prepare for the capital increase, but it has not been successful.
In August 2016, Hongkang Life planned to issue an additional 200 million shares, introduce two new shareholders, and intend to increase the registered capital from 1 billion yuan to 1.2 billion yuan, but the capital increase was not completed, and its capital increase plan changed frequently in the following years.
Until the end of 2018, Hongkang Life's capital increase plan was revised for the fourth time, and it was proposed to increase the registered capital from 1 billion yuan to 1.0884 billion yuan, and the new shareholders also underwent several rounds of transformation, but in the end they failed to increase the capital successfully. As of now, the registered capital disclosed on the official website of Hongkang Life is still 1 billion yuan.
Behind the personnel change of the chairman, whether it will be accompanied by the change of equity and become an opportunity for him to complete the capital increase is worth paying attention to.
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