The closing prices of A-shares of the two brokerages have been the same for 4 consecutive trading days

National Business Daily

2024-05-14 22:22Published on the official account of Sichuan Daily Economic News

Reporter: Wang Haimin Editor: Zhao Yun

Recently, a number of mergers and acquisitions have continued to advance in the industry, and the market's attention to the brokerage sector has also risen.

In recent trading days, there has been a rather "bizarre" scene in the A-share brokerage sector, from May 8 to May 13, for four consecutive trading days, the closing prices of Guotai Junan and Huatai Securities were completely consistent.

Although it is not ruled out as a pure coincidence, the reporter of "Daily Economic News" noticed that this phenomenon has aroused heated discussions among investors in the stock bar in recent days. Many netizens believe that this may be releasing some kind of "merger" signal. At present, such speculation seems to be unfounded.

A number of industry insiders told reporters that from a realistic point of view, the possibility of mergers and acquisitions between the two brokerages is low.

Other industry insiders believe that these two brokerages belong to two different state-owned asset systems, and the internal situation is more complex and difficult to integrate. In contrast, there is a higher likelihood of a merger between brokerages under the same state-owned assets system.

According to public information, at present, Shanghai SASAC has Haitong Securities, Guotai Junan, Huaxin shares and other listed securities companies. Huatai Securities is owned by the State-owned Assets Supervision and Administration Commission of Jiangsu.

From May 8 to May 13, for four consecutive trading days, the closing prices of Guotai Junan and Huatai Securities' A-shares were exactly the same, which caused heated discussions among investors on social media such as stock bars. Visual China Diagram

There is a lot of discussion on social platforms

On May 8, Guotai Junan and Huatai Securities both closed at 13.71 yuan, on May 9, both closed at 13.80 yuan, on May 10, both closed at 13.88 yuan, and on May 13, both closed at 13.95 yuan.

On May 14, the closing price was finally different, Guotai Junan closed at 13.93 yuan, and Huatai Securities closed at 14.01 yuan.

Guotai Junan was listed on the A-share market in June 2015, and Huatai Securities was listed on the A-share market in February 2010. Choice data shows that since June 2015, in more than 2,000 trading days, the closing price of A-shares of these two companies has only seen 5 "crashes", of which 4 "crashes" have occurred in the last few trading days, so it is indeed a very unlikely event.

The reporter of "Daily Economic News" noticed that in recent days, the above situation has caused a lot of discussion on social platforms where investors such as stock bars gather. Many investors commented that this may be sending some kind of "merger" signal.

However, most of the speculations and comments from the above-mentioned investors lack actual basis.

The reporter noticed that since 2023, many investors have asked Huatai Securities whether it has any plans for mergers and acquisitions on the interactive platform. In this regard, Huatai Securities' answer on the interactive platform is usually that if there are major matters such as mergers and acquisitions in the future, the company will fulfill its information disclosure obligations in a timely manner in strict accordance with relevant regulations. Up to now, neither Guotai Junan nor Huatai Securities has disclosed any relevant mergers and acquisitions.

In short, the succession of coincidences came to an end on May 14. The above phenomenon is also limited to A-shares, and the closing prices of H-shares of the two companies have not been the same in recent trading days.

The industry has experienced four rounds of mergers and acquisitions

Catalyzed by policies, since 2024, mergers and acquisitions in the securities industry have been a major focus of the capital market, and it is also a trend to support leading securities companies to become bigger and stronger through mergers and acquisitions. However, up to now, some medium-sized securities companies have substantial mergers and acquisitions in the securities industry, such as Guolian Securities and Zheshang Securities, which are in action.

In the past 30 years, the securities industry has experienced four rounds of mergers and acquisitions, one of which is the "separate operation" mergers and acquisitions in 1995~2002; The second round is the "comprehensive management" merger and acquisition tide in 2004~2006; The third round is the "one participation and one control" merger and acquisition tide in 2008~2010; The fourth round is the wave of "market-oriented" mergers and acquisitions from 2012 to the present.

Historically, many of the current leading securities firms have seized policy opportunities to develop and grow through mergers and acquisitions, and CITIC Securities is one of the typical cases. Guotai Junan and Huatai Securities have also enjoyed M&A dividends in their respective development processes. In 1999, Guotai Junan Securities was established by Guotai Securities and Junan Securities through new merger, capital increase and share expansion; In 2005~2006, Huatai Securities acquired Asia Securities and United Securities.

From the perspective of the history of mergers and acquisitions in the securities industry, the largest number of cases is the acquisition of small brokerages by large brokerages. The merger between two large brokerages with a small difference in size often involves complex situations and there are no shortage of failures. For example, in September 2004, CITIC Securities made an offer to acquire GF Securities, and the two brokerages were of comparable size at that time. This move was resisted by GF Securities employees, and Shenzhen Jifu Venture Capital Co., Ltd., which was established by GF Securities employees, implemented an anti-takeover plan. Subsequently, through a series of shareholding increases, the "anti-takeover alliance" jointly formed by Liaoning Chengda, Jilin Aodong and Shenzhen Jifu formed an absolute controlling position in GF Securities. In October 2004, CITIC Securities' acquisition plan failed.

According to media reports, in 2002, there was news in the industry that Guotai Junan would acquire Orient Securities, and under the resolute resistance of the then management of Orient Securities, the Shanghai Municipal Financial Working Committee rejected Guotai Junan's plan to acquire Orient Securities.

In addition, even in some of the merger cases that have been successful so far, the implementation process has not been smooth sailing. For example, after CIC Securities was acquired by CICC, it experienced a painful period of massive personnel loss.

At present, the volume of Guotai Junan and Huatai Securities is also relatively close, and in recent years, the competition for the second position in the industry has been around the two brokerages. Choice data shows that from 2018 to 2022, Guotai Junan's net profit ranked second in the industry for 4 years, and from 2021, Huatai Securities has stood in the third position in the industry. However, the 2023 annual report shows that Huatai Securities has surpassed Guotai Junan, and its performance ranking has risen to second in the industry. In the first quarter of 2024, due to the more decline in the performance of Huatai Securities, Guotai Junan regained the second position in the industry. In addition, in terms of revenue scale, the two brokerages have also been relatively close in recent years.

Regarding the above phenomenon and the possibility of a merger between Guotai Junan and Huatai Securities, the chief of a brokerage non-bank told the "Daily Economic News" reporter: "It is unlikely that a merger between these two brokerages will occur, and I have asked many people. ”

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