"Investor Network" Wu Wei
Recently, the China Securities Regulatory Commission (CSRC) officially accepted the administrative license application of Debang Securities Co., Ltd. (hereinafter referred to as "Debang Securities") for the change of more than 5% equity; Shandong State-owned Assets may replace Oriental Industrial Venture Capital Co., Ltd. (hereinafter referred to as "Industrial Investment") to become the owner of Debang Securities.
Tianyan check shows that Oriental Industrial is 100% owned by Oriental Guangxin Technology Development Co., Ltd. (hereinafter referred to as "Oriental Guangxin"), and after penetration, Guo Guangchang, the "Fosun system" boss, holds 85.3% of the equity of Oriental Guangxin; Oriental Industrial holds 97.94% of the equity of Debang Securities; Therefore, Debang Securities is an important financial asset under the "Fosun System".
With the support of "Fosun System", Debang Securities has been able to develop rapidly, especially in the bond underwriting business. In 2017, the net income from bond underwriting of Debang Securities was 861 million yuan, ranking among the top 10 in the industry. However, after the outbreak of the "Wuyang Bonds" incident in 2018, the rapid development trend of Debang Securities has been interrupted since then, and due to the follow-up compensation of "Wuyang Bonds", Debang Securities' revenue and profits have declined sharply.
The actual controller Guo Guangchang and the "Fosun System" controlled by him have also sold a large number of their assets in recent years due to liquidity pressure. Shandong state-owned assets took over Guo Guangchang's holding of Debang Securities for more than 20 years, can Debang Securities be reborn?
Origin: borrowing chickens to lay eggs for the final result
In China, securities licenses are not easy to obtain, and as of now, there are only more than 140 securities companies registered in China. In order to establish Debang Securities, Guo Guangchang and the "Fosun System" controlled by him made great efforts.
In 2003, with the approval of the China Securities Regulatory Commission, after merging the securities department of the former Shenyang Trust and Investment Company, the securities department of the former Shenyang International Trust and Investment Company, the securities department of the former Dandong International Trust and Investment Company and the securities department of the former Fushun Trust and Investment Company, Debang Securities was jointly funded by Shanghai Yuyuan Tourism Mall Co., Ltd. (formerly known as Yuyuan Co., Ltd.), Shanghai Fosun Industrial Investment Co., Ltd. (hereinafter referred to as "Fosun Investment"), Shanghai Shenxin (Group) Co., Ltd. and Tianjin Jinyao Group Co., Ltd. The registered capital is 1.008 billion yuan. At the time of establishment, the registered place was Shenhe District, Shenyang City, and the registered place was changed to Putuo District, Shanghai in February 2007.
After the establishment of Debang Securities, Yuyuan Co., Ltd. (600655. SH) and other platforms controlled by Fosun have successively transferred the equity transferred by shareholders such as Dandong State-owned Assets Management Center and Fushun Rongda Investment Co., Ltd., and the shareholding of Yuyuan Co., Ltd. has also increased from 30% at the beginning of its establishment to 32.73%.
Subsequently, shareholders such as Yuyuan Co., Ltd. and Fosun Investment transferred their holdings of Debang Securities to Industrial Investment. By 2013, the registered capital of Debang Securities had increased to 1.69 billion yuan, and the shareholder Industrial Investment held 93.64% of the company's shares and was the controlling shareholder of the company. In 2014, Debang Securities held its founding meeting and the first general meeting of shareholders, and changed it to a joint-stock company as a whole. Although the equity of the minority shareholders of Debang Securities has been adjusted since then, the status of the controlling shareholder of Industrial Investment has not changed.
Source: Company announcement
According to Jiemian News, as early as 2007, Debang Securities had an IPO plan, at that time, Fang Jiachun, then chairman of Debang Securities, publicly said: "We will make every effort to promote the IPO work in 2007 and achieve a successful listing as soon as possible." However, public information shows that it was not until 2017 that Debang Securities made great achievements in the bond underwriting business that the company entered into a partnership with Haitong Securities (600837. SH) signed a listing counseling agreement.
In 2018, the "Wuyang Bonds" incident officially broke out, and in July 2021, Haitong Securities officially terminated the listing guidance of Debang Securities due to the impact of the "Wuyang Bonds" compensation and the sharp reduction in bond underwriting income. The fate of Debang Securities has also undergone drastic changes due to the "Wuyang Bonds".
Fate: Both encountered "heart-warming things"
The domestic securities industry has a high degree of industry concentration, and the head securities companies have huge advantages in securities brokerage, investment banking, asset management and other businesses, so small and medium-sized securities companies are vying to develop their own characteristic businesses, and Debang Securities is no exception.
Debang Securities, which does not rank too high in revenue and net assets, regards large investment banks and its bond underwriting business as the company's characteristic business. In 2016, the amount of bonds underwritten by Debang Securities was 112.336 billion yuan, ranking 14th, up 12 places from the previous year. In 2017, the amount of corporate bond underwriting was 267.240 billion yuan, ranking fourth, second only to CITIC Securities (600030.SH), China Securities Construction Investment (601066. SH), China Merchants Securities (600999. SH）。
However, in the process of bond underwriting, Debang Securities failed in the "Wuyang Bond" incident. "Wuyang Bonds" refers to the two bonds "15 Wuyang Bonds" and "15 Wuyang 02" issued by Wuyang Construction underwritten by Debang Securities in August 2015. At the beginning of 2016, Wuyang Construction was criticized by the Zhejiang Provincial Securities Regulatory Bureau and the Shanghai Stock Exchange for the inconsistency between the actual use of the raised funds and the prospectus. In the same year, due to disputes involving project engineering, Wuyang Construction was included in the list of dishonest judgment defaulters in national courts for many times.
In August 2017, Wuyang Construction defaulted on its debts, and the China Securities Regulatory Commission announced that it would be investigated; In July 2018, the certificate committee issued an administrative penalty decision against Wuyang Construction, which showed that Wuyang Construction fraudulently obtained the approval of the company's bond issuance by defrauding it with false declaration documents.
Specifically, when preparing the 2012-2014 financial statements, Wuyang Construction inflated the company's profits by "offsetting" the accounts receivable and accounts payable of the construction projects it undertook, and at the same time inflated the accounts receivable and accounts payable. Through the above methods, Wuyang Construction's annual inflated net profit from 2012 to 2014 was not less than 31 million yuan, 65 million yuan and 155 million yuan respectively, and the cumulative inflated profit was 250 million yuan. If the profits are not inflated, the profits of Wuyang Construction will not be enough to pay the interest of the corporate bonds for one year, so it will not meet the conditions for bond issuance.
As an intermediary, Debang Securities has an unshirkable responsibility in the "Wuyang Bond" incident. Therefore, after the trial of the case was concluded, the court sentenced Chen Zhizhang, chairman of Wuyang Construction, Debang Securities, and Daxin Certified Public Accountants to bear joint and several liability for the principal and interest of debts totaling 740 million yuan from 487 natural person investors, and AllBright Law Firm and Dagong International Credit Rating Co., Ltd. were jointly and severally liable for the above debts within the range of 5% and 10% respectively.
Choice data shows that from 2017 to 2021, the net income of Debang Securities' bond underwriting was 861 million yuan, 115 million yuan, 196 million yuan, 76 million yuan, and 47 million yuan respectively, ranking 3rd, 32nd, 31st, 61st, and 64th in the industry. No data have been available since 2022.
After the decline in bond underwriting income and the fulfillment of compensation obligations, Debang Securities' net profit has shown a significant downward trend since 2017. In 2021 and 2022, the company will have losses of 454 million yuan and 90.9424 million yuan respectively. In 2024, Debang Securities will also become the executor together with Chen Zhizhang, Qian Zhiliang, and Daxin Certified Public Accountants due to compensation issues.
Data source: Tianyancha
In addition to Debang Securities' "stepping on thunder", Guo Guangchang and his "Fosun System" are also struggling due to debt pressure. After the debt pressure erupted in 2022, Guo Guangchang has sold his shares in a number of "cash cows", including Nanjing Iron and Steel, Jianlong Shares, and Yuyuan Shares, in exchange for liquidity; It also recently sold its stake in the Belgian insurance company Ageas.
After planning the development route of the enterprise, Guo Guangchang said, "In the future, Fosun will focus on two main businesses, namely biomedicine and cultural tourism, and embark on the road of asset-light operation. ”
Fate: When the catastrophe comes, they fly separately
"Fosun System" is under liquidity pressure, and Debang Securities, which has not made strong money in recent years, has naturally been inserted as a "grass mark" by Guo Guangchang. As early as June 2023, there were media reports that Shandong Finance Investment Group Co., Ltd. (hereinafter referred to as "Shandong Finance") and other Shandong state-owned assets planned to acquire part of the equity of Debang Securities from "Fosun", and eventually control Debang Securities.
Tianyancha shows that from April to May 2023, Industrial Investment has pledged a total of 1.857 billion yuan of capital contribution of Debang Securities to local state-owned units in Shandong Province such as Shandong Finance, Jinan Financial Holding Group Co., Ltd., and Jinan Kejin Investment Management Co., Ltd.; The amount of capital pledged by Industrial Investment accounted for 48.97% of the paid-in capital of Debang Securities.
It should be noted that before Shandong State-owned Assets completed its holding of Debang Securities, there had been great changes within Debang Securities. Since 2023, Ren Zhiqiang, director of the research institute of Debang Securities, Wu Kaida, and Hua Xiaowei, deputy directors; Li Ning, Chief Technology Officer (CTO) and General Manager of the Science and Technology Center and Information Technology Department; Chief economist Lu Zhe and other senior executives of business departments have successively jumped to other brokerages.
In addition to the backbone of the business department, according to Jiemian News, Debang Securities has also fallen into a layoff turmoil; The company's business line adjustment involves investment banking business, wealth management, research institutes and other departments. According to Choice data, as of the end of 2023, the number of employees in Debang Securities is 1,507, and at present, the latest data is 1,237.
According to the data, at present, in Shandong Province, only Zhongtai Securities (600918. SH), if the acquisition of Debang Securities by Shandong State-owned Assets is successfully implemented, Shandong State-owned Assets will add another securities company. At the end of October 2023, the Central Financial Work Conference proposed for the first time to "cultivate first-class investment banks and investment institutions, and at the same time, small and medium-sized financial institutions should base themselves on the local area and carry out characteristic operations." ”
With the support of policies, the equity change and integration of small and medium-sized securities firms are accelerating. Recently, Guolian Securities (601456. SH) in connection with the proposed acquisition and integration of Minsheng Securities; Zheshang Securities (601878. SH) has also won the shares of Guodu Securities (870488) several times, and after the completion of the transaction, Zheshang Securities will become the largest shareholder of Guodu Securities.
In the case of increasing concentration in the securities industry, after Shandong state-owned assets became the owner, Debang Securities, which left the "Fosun system", still needs to deal with new challenges. (Produced by Thinking Finance)■