Haier reduced its holdings in CICC and cashed out tens of billions, and the post-70s financial "young women" turned to big health, and their ambitions still need to be paid

The IFC is the tallest building on Hong Kong Island and an iconic view of Victoria Harbour, where CICC's Hong Kong office is located. Source: Visual China

Author | Wen Shijun

Edit | Chen Fuye

Produced by | Prism Tencent Xiaoman Studio

On the evening of Friday, January 5, the head brokerage CICC (China International Capital Corporation Limited) announced a shareholder reduction plan, and the shareholder "Haier Jinying Holdings" plans to reduce its stake by no more than 2% in the next three months. In the 2023 interim report, Haier is the third largest shareholder of CICC, holding 4.2% of the shares.

Haier has reduced its holdings of CICC shares four times, with a total of 7.418 billion yuan in cash. If calculated according to the market value on January 5, the amount of the reduction will exceed 3.5 billion yuan, and the cumulative reduction will exceed 10 billion.

On January 8, when the market opened after the weekend, CICC's share price fell 5.87%, and its market value evaporated by 10.33 billion yuan in one day, ranking fourth among A-share brokerages after the total market value fell to China Securities Construction Investment.

Who is the main body of this reduction, "Haier Jinying Holdings"?

Behind the kingdom of home appliances, Haier has its financial sense. Starting from the urban credit cooperative of "Hai Yongheng" in 1996, to the establishment of Haier Financial Holding in 2014, and then to the IPO of the card position in 2020. Along the way, Haier has been involved in banking, insurance, trust, securities, financial leasing, small loans, consumer finance, financial factoring, PE, VC, third-party payment, wealth management platform, clearing platform, asset trading platform, P2P, consumer finance and other financial formats, with total assets exceeding 100 billion yuan.

But the policy winds have changed. In September 2020, the State Council issued the Decision on the Implementation of the Administration of Access to Financial Holding Companies, and on the same day, the People's Bank of China (PBOC) issued the Trial Measures for the Supervision and Administration of Financial Holding Companies, requiring that "without the approval of the PBOC, it shall not be registered as a financial holding company, and the words "financial holding" and "financial group" shall not be used in the name of the company.

The sense of smell has always been sensitive, and "Haier Financial Holdings" has adjusted accordingly.

In June 2021, the listed company Commodity City (600415. SH) signed an Equity Transfer Agreement with Haier Financial Holdings, and Haier Financial Holdings sold its Internet payment license, Express Pass, for 449 million yuan.

In December 2021, Haier Financial Holdings changed its name to Haier Jinying Holdings, and removed all expressions related to finance from the company's business scope, but retained "engaging in investment activities and financial consulting with its own funds".

In fact, as of January 2014, the central bank had only accepted applications from five financial holding companies, but only three had been approved for licensing – CITIC Financial Holdings, Beijing Financial Holdings, and China Merchants Financial Holdings. The applications of Everbright Financial Holding and Wanxiang Holdings have not yet been approved.

The post-70s "female young marshal", the trader behind the withdrawal of CICC

Haier is the "original shareholder" of CICC.

In April 2018, Central Huijin listed a 9.5% stake in CICC at a price of 5.412 billion yuan and demanded a lump sum payment. The amount of funds is not small, but as media reports at the time said that "real estate and Internet companies are not good, (Central Huijin) has not many options", Haier Financial Holding took advantage of the trend.

At the time of CICC's A-share IPO in 2020, Haier Financial Holding was the second largest shareholder after Central Huijin.

As a benchmark institution for Chinese securities firms, CICC has attracted much attention. Haier's reduction of holdings also seems to demonstrate its determination to "return to industry". In addition to this reduction, the previous four reductions were announced in June and December 2022, and May and August 2023. Reducing holdings in an orderly manner to avoid too much volatility in the stock price, after all, it is not good for shareholders.

What's more, with more than 5 billion yuan to achieve the card position IPO shares, reduce the shareholding to 2.2%, you can get back more than 10 billion. In 5 years, the cash recovered has been twice as much as invested.

In fact, if we take a look at the trader behind this, Haier's former financial "young marshal" Tan Lixia's words, we may have a better understanding.

In an article published on Haier's official website at the end of 2014, Tan Lixia recalled that many peers felt that no matter whether it was the finance department, the CFO, or the financial director, they were often not valued by the leaders in the organization. Because if the financial system can create value for the organization, then they will definitely welcome and value finance.

Taking out more than 5 billion cash at a time to enter the head brokerage is value-added, so exiting to make money is also value-added, and cashing out a payment license that is not profitable is also value-added. The underlying logic behind this is the same.

Tan Lixia is the "old Haier", who joined Haier in 1992 at the age of 22, when Haier had just merged Qingdao Electric Freezer Factory and Qingdao Air Conditioner Factory to establish Haier Group.

In 1997, Zhang Ruimin led the establishment of the Overseas Promotion Headquarters of Haier Group to promote internationalization, and Tan Lixia joined it as a "young man". Five years later, Tan Lixia became the head of Haier Group's overseas headquarters and entered the management team. At the turn of the century, before and after China's accession to the WTO, China's economy began to be more connected with the world, and Tan Lixia undoubtedly chose a track that could "produce results".

In 2006, at the age of 36, Tan Lixia became Haier's chief financial officer. Subsequently, China ushered in another round of financial sector expansion cycle. In 2014, Haier Financial Holding was established, and Tan Lixia, as the chief financial officer, became the chairman of Haier Financial Holding and led a series of subsequent capital operations.

But with the contraction of Haier's financial tentacles, Tan Lixia is transforming again. On October 13, 2023, Tan Lixia stepped down as chairman of Haier Jinying Holdings, and was succeeded by Zhang Lei, who was born in the 80s.

The transformation of big health is also an "investment" idea, and financial leasing is still increasing capital

Tan Lixia is now the vice chairman of the board of directors and executive vice president of Haier Group, and her future focus is "big health". Zhang Lei's original identity is the general manager of Haier Financial Leasing Co., Ltd. and the general manager of Haier Financial Factoring (Chongqing) Co., Ltd.

Behind the change of identities between the two is the next move of Haier Capital Bureau.

A senior executive who used to be responsible for finance and capital operation transformed into a big health, and investment and mergers and acquisitions may be a familiar path.

On December 30, 2023, Shanghai RAAS (002252. SZ) announced that Haier and Grifols, an international blood product giant, signed a "strategic cooperation and share purchase agreement", Haier or its designated party will acquire 20.00% of the total share capital of Shanghai RAAS held by the latter at a consideration of 12.5 billion yuan.

At the same time, Grifols entrusted 6.58% of the voting rights corresponding to the remaining shares of Shanghai RAAS to Haier for a period of 10 years. In this way, Haier has 26.58% of the voting rights of Shanghai RAAS, and has become the actual controller of China's "Blood King".

According to the announcement of Shanghai RAAS, it currently has four blood product production bases in Shanghai, Zhengzhou, Hefei and Wenzhou, and its products cover three categories: albumin, immunoglobulin and coagulation factors. As of February 2023, the company and its subsidiaries and grandchildren have 42 apheresis stations, distributed in 11 places in Guangxi, Hunan, Hainan, Shaanxi, Anhui, Guangdong, Inner Mongolia, Zhejiang, Hubei, Jiangxi and Shandong.

According to the announced price, the transfer price for Haier to purchase Shanghai RAAS per share is about 9.4 yuan. On the first trading day after the announcement, Shanghai RAAS closed at 7.46 yuan per share. Haier is a premium acquisition.

In the market transaction, the price is naturally determined by the market. Behind the high consideration paid by Haier is the relatively special scarcity of blood products and the relatively stable profitability of Shanghai RAAS. According to the information disclosed by Shanghai RAAS in investor communication activities, from January to September 2023, the company's operating income was 5.935 billion yuan, an increase of 19.87%, and the net profit attributable to shareholders of listed companies was 1.788 billion yuan, an increase of 11.46%.

Before becoming the owner of Shanghai RAAS, Haier already had two listed health companies: Haier Biomedical (688139. SH), and in the same year, Yingkang Life (300143. SZ）。

In the subsequent press release, Tan Lixia, on behalf of Haier Health, expressed her stance on the merger and acquisition: the key process of going deep into the core areas of medical and health care.

Zhang Lei took over as chairman of Haier Jinying, and the strategic direction is also obvious.

On December 15, 2023, the official website of Haier Industrial Finance announced that after the shareholders' research and decision, the registered capital of Haier Financial Leasing will increase from the current 2.79 billion yuan to 5 billion yuan, and the first phase of paid-in capital increase will be 1 billion yuan.

The most direct mode of financial leasing is that the lessor (such as Haier Financial Leasing) purchases the goods from the supplier, and the lessee (Haier's financial leasing customer) pays rent to the lessor to lease the goods, and after the lease expires, the lessee can buy out the goods, and the ownership of the goods is transferred from the lessor to the lessee.

In essence, financial leasing is a kind of debt financing tool and an important "shadow bank". According to the data, as of the end of September 2023, the balance of financial leasing contracts nationwide was about 5.77 trillion yuan.

At the same time, financial leasing companies are also important participants in the bond market, and it is a routine operation to securitize their own debts and expand capital leverage. According to incomplete statistics from the author of "Prism", the current bond scale with Haier Financial Leasing as the main issuer is 5.76 billion yuan.

The main controlling shareholder of Haier Financial Leasing is Haier Jinying Holdings, which we are familiar with, holding 37.65% of the shares. This means that Haier has taken out another 376.5 million yuan of real money this time.

Of course, this money is also to "create value-added and value-added", and to continue to make money. However, the financial leasing business is more deeply related to the "industry", which is consistent with the policy direction.

The capital increase of Peking University Founder Life Insurance is still paying for the layout 22 years ago

On December 27, 2023, the official website of the State Administration of Financial Supervision and Administration issued an approval, agreeing to the capital increase of Peking University Founder Life. The registered capital increased from 2.88 billion yuan to 4.58 billion yuan, and the original shareholders and capital contribution ratio remained unchanged.

The consolidated capital increase was 1.7 billion yuan, according to the shareholding ratio of shareholders, "New Founder Group" held 51% of the shares, the Japanese Meiji Yasuda Life held 29.24% of the shares, and Haier Jinying held 19.76% of the shares, and Haier Jinying increased its capital by about 336 million yuan.

This capital increase may be difficult to associate with "value-added", and it is more about continuing to pay for the aftermath of the "Founder" thunderstorm.

With the imprisonment of former CEO Li You, the public snatching of documents, and a series of incidents such as the school's Peking University assets and Peking University Founder going to court, in December 2019, Founder Group's final debt exploded. In February 2020, the Beijing No. 1 Intermediate People's Court ruled that Founder Group entered into the judicial reorganization procedure. At this time, the Founder Group system includes more than 400 companies, including a number of financial institutions and listed companies. Peking University Founder Life Insurance is an important insurance company

Founder Group is a "sale-type reorganization", that is, the relatively high-quality assets in the enterprise that can continue to operate are sold and continue to operate. In January 2022, the regulatory approval approved Ping An Life as the main body to establish the "New Founder Group" and undertake the corresponding assets - this is the major shareholder of Peking University Founder Life.

However, Haier Jinying's 19.76% stake in Peking University Founder has a much longer history. In 2002, Haier and New York Life established a joint venture between Haier New York Life Insurance Co., Ltd., with Chinese and American shareholders holding 50% of the shares, becoming the first batch of joint venture insurance enterprises after China's accession to the WTO, and also the focus of Haier's first batch of capital layout.

In 2010, U.S. capital withdrew and Japanese capital entered. New York Life sold its stake to Haier and Japan's Meiji Yasuda Life Insurance. Haier became the majority shareholder and the company was renamed Haier Life.

But just like today, Haier's "obsession" with the license plate is not deep, and it advances and retreats quickly. In April 2012, Founder Group became the controlling shareholder of 51% of the shares through the purchase of Haier's shares, and changed its name to Peking University Founder Life Insurance. In December 2022, New Founder Group officially took over the 51% stake.

Financial data show that as of the end of 2022, Peking University Founder Life Insurance has accumulated a loss of 1.737 billion yuan. This increase is not enough to cover this figure.

However, the purpose of the capital increase is not simply to cover the loss, but to alleviate the solvency pressure of Peking University Founder Life. The solvency of an insurance company, in short, is whether it has sufficient assets to pay off its insurance premiums and claims.

According to the requirements of the State Administration of Financial Regulation, the core solvency adequacy ratio of insurance companies shall not be less than 50%, and the comprehensive solvency adequacy ratio shall not be less than 100%. According to the solvency report for the second quarter of 2023, the two indicators of Peking University Founder Life Insurance are 19.77% and 39.53% respectively.

Peking University Founder Life Insurance said that the main reason for the failure to meet the solvency standard was the significant impairment of related claims with Founder Group. At present, the company is actively coordinating with the three shareholders to promote the capital increase. The aftermath of the "thunderstorm" of the Founder Department has not subsided, and of course it is impossible for Peking University Founder Life to be alone.

For enterprises that do not meet the standards, they are the objects of "key care" of supervision. In addition to restricting the remuneration of directors, supervisors and senior executives, and restricting the distribution of dividends to shareholders, it can also directly put forward requirements such as increasing capital and ordering the adjustment of management personnel.

In September 2023, Peking University Founder Life announced the proposal of the "Peking University Founder Life 2023 Capital Increase Plan". The plan received regulatory approval at the end of last year, and it can be expected that its solvency data in the fourth quarter is expected to turn from negative to positive.

The license has been preserved, but there is still a long way to go. For Haier, such a "historical burden" is also paying for the "ambitions" of the past.