China Fund News Jiang You
A leading brokerage giant with a market value of more than 100 billion yuan, Huatai Securities' overseas layout has undergone major changes.
Huatai Securities intends to sell the entire stake in AssetMark, a U.S.-controlled subsidiary, in a transaction that is expected to receive about US$1.793 billion (about 13 billion yuan) in cash. This amount of money is also a large amount for the head brokerage Huatai Securities. The sale of this asset, which was purchased in 2016, has also brought good income to Huatai Securities, and the proceeds from this transaction are expected to be about 795.73 million US dollars (equivalent to about 5.8 billion yuan).
On the evening of April 25, Huatai Securities announced that it intends to sell all the shares of AssetMark, a turnkey asset management platform of its U.S. holding subsidiary, to the fund of the private equity investment management company GTCR, for a consideration of $35.25 per share, and Huatai Securities is expected to receive about $1.793 billion in cash. Upon completion of the transaction, AssetMark will be delisted from the NYSE, subject to the approval of the relevant regulatory authorities and other closing conditions.
According to the announcement, AssetMark is a leading turnkey asset management platform in the United States, mainly serving independent investment advisers, providing them with a series of services such as investment strategy and portfolio management, customer relationship management, asset custody and other services and advanced and convenient technology platforms.
At the end of October 2016, Huatai Securities completed the acquisition of AssetMark. AssetMark has maintained its momentum and was listed on the New York Stock Exchange in July 2019. As of around 10 p.m. Beijing time on April 25, AssetMark shares were trading near $34, with a total market capitalization of $2.5 billion.
AssetMark's operating income in 2023 was $709 million and net profit was $123 million, both of which were good year-over-year growth. It is understood that AssetMark currently manages assets of about $117 billion.
Regarding the sale of AssetMark, Huatai Securities said that Huatai Securities sold its entire equity interest in AssetMark in consideration of the current competitive landscape of the turnkey asset management platform industry and the needs of the company's international business further development. On the one hand, it helps to achieve a higher return on investment, maximize the interests of the company and shareholders, and on the other hand, it is conducive to the company to further optimize the allocation of assets and resources.
Huatai Securities said that after the acquisition, it also fully learned from the business model of the turnkey asset management platform industry and the successful experience of AssetMark, actively promoted the company's platform development and the transformation and upgrading of wealth management business, and achieved the strategic goals set when acquiring AssetMark.
After more than 7 years of acquisition, the acquisition has achieved good returns, and will continue to enhance the breadth and depth of integration into the global mainstream market
Huatai Securities said that after the completion of the transaction, the company expects to receive about $1.793 billion in cash, which will be used to replenish the company's working capital and other general corporate purposes. According to the currently available financial information, the company's income from this transaction in 2024 (pre-tax in consolidated statements) is expected to be approximately US$795.73 million, and the specific data is subject to the 2024 financial report. From the completion of the acquisition at the end of October 2016 to the sale now, Huatai Securities has obtained a good return.
Although the U.S. holding subsidiary will be sold this time, for Huatai Securities, which is "committed to becoming a first-class investment bank with both local advantages and global influence", the pace of internationalization is expected to continue.
After being listed on the A-share market in 2010, Huatai Securities was listed on the H-share market in 2015. Since then, the pace of internationalization has not stopped, and in 2019, it issued its first GDR under the Shanghai-London Stock Connect mechanism, becoming the first Chinese financial enterprise to be listed in Shanghai, Hong Kong and London.
According to reports, Huatai Securities takes Huatai International as a platform and the Hong Kong market as a bridgehead, and the number of IPO sponsors in 2023 will rank first among Chinese securities firms in Hong Kong. The U.S. subsidiary was established in 2018 and has since been granted a number of important business licenses, and the Singapore subsidiary has been established to expand its international business into the Southeast Asian market. In recent years, in the complex and volatile global market environment, the compound annual growth rate of Huatai International's total assets has reached 8.8% in the past three years, and the total assets will exceed HK$200 billion by the end of 2023.
Huatai Securities said that the company will unswervingly deepen cross-border integration and linkage, continue to improve the breadth and depth of integration into the global mainstream market, actively deploy emerging markets, and strive to build a first-class investment bank with both local advantages and global influence, so as to better help Chinese enterprises "go global" and foreign investors "come in".
At the close of trading on April 25, Huatai Securities' A shares were reported at 13.31 yuan, up 0.23%, and the company's total market value was 120.2 billion yuan.
Editor: Captain
Review: Xu Wen