Huizhou Bank faces another shareholder equity transfer.

Economic Observer has noticed that Anhui Dongfeng Electromechanical Technology Co., Ltd. is listing for transfer its held 2.4048 million shares of Huizhou Bank on the Shanghai United Property Exchange, with a deadline of October 11, 2024.

As of September 19, the information has been clicked 1,190 times.

Meanwhile, another auction for 93.5 million non-foreign-listed shares of Huizhou Bank is being conducted on the Alibaba Asset Judicial Auction platform.

It's worth noting that in the first half of this year, several state-owned enterprise shareholders intended to list for sale their held shares of Huizhou Bank.

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The public equity transfer information shows that the shares transferred by Anhui Dongfeng Electromechanical Technology Co., Ltd. account for 0.0001% of the total share capital of Huizhou Bank, with a set transfer base price of 5.362704 million yuan.

After calculation, the transfer price per share is approximately 2.23 yuan.

Once this transaction is completed, Anhui Dongfeng Electromechanical Technology Co., Ltd. will no longer hold any shares of Huizhou Bank.

The shares of Huizhou Bank being auctioned on the Alibaba Asset Judicial Auction platform belong to Zhuji Langsheng Mechanical Technology Co., Ltd., with an auction price set at 282 million yuan, or about 3.01 yuan per share; the equity assessment price is 503 million yuan, or about 5.38 yuan per share, with the auction price being only 56% of the assessment price.

It should be mentioned that this 93.5 million shares were previously auctioned on June 25 and July 16, with starting prices of 352 million yuan and 282 million yuan, respectively, about 3.77 yuan and 3.01 yuan per share, but both failed to sell due to lack of bids.

In fact, several state-owned enterprises have successively transferred their held shares of Huizhou Bank.

Specifically, in March of this year, COFCO Group Limited and COFCO Biotech Co., Ltd. disclosed the transfer of their held shares of Huizhou Bank on the Shanghai United Property Exchange.

COFCO Group Limited plans to transfer 38.1075 million shares of Huizhou Bank, accounting for 0.27% of the total share capital; COFCO Biotech Co., Ltd. plans to transfer 40.3095 million shares of Huizhou Bank, accounting for 0.29% of the total share capital.

The two equity transfers total 78.417 million shares, accounting for 0.56% of the total share capital.

In June and September of this year, Ma'anshan Iron and Steel (Group) Holding Company Limited and Anqing Zhongchuan Diesel Engine Co., Ltd. transferred their held 1.7599 million and 4.3134 million shares of Huizhou Bank at base prices of 15.716 million yuan and 13.275 million yuan, respectively, accounting for 0.0127% and 0.0311% of Huizhou Bank's total share capital, about 8.93 yuan and 3.08 yuan per share.

Ma'anshan Iron and Steel (Group) Holding Company Limited pointed out in the special matter explanation of the equity transfer assessment report that due to the small proportion of shares held, the client and property holding unit have no control over the invested unit and cannot coordinate Huizhou Bank to cooperate with the assessors in conducting on-site investigations of the assets involved in the assessment object.

This assessment is based on the information provided by the holding unit, as well as information obtained from public information channels, to evaluate and estimate the market value of the assessment object.

Shareholders want to liquidate and leave, but finding a qualified equity transferee is not easy.

In the aforementioned equity transfers, several equity transfers have been listed for multiple extensions due to the inability to find interested parties, and Anqing Zhongchuan Diesel Engine Co., Ltd. decided to terminate the transfer project of 4.3139 million shares of Huizhou Bank starting from September 4 due to the failure to collect interested transferees.

A bank insider said that the acceleration of state-owned enterprise equity transfers may be related to the "Limit on Finance Order."

In recent years, the State-owned Assets Supervision and Administration Commission of the State Council has required central enterprises to return to their origins and focus on their main businesses, strictly controlling non-main business investments.

In September 2023, the "Interim Measures for the Administration of State-owned Enterprise Participation" issued by the State-owned Assets Supervision and Administration Commission proposed that, except for strategic holdings or holding periods, state-owned enterprises should withdraw from low-efficiency and ineffective equity participations that have not paid dividends for more than five years, have been losing money for a long time, and are not sustainable, and withdraw from equity investments that are seriously inconsistent with the positioning of state-owned enterprises and do not have competitive advantages, are at high risk, and have difficult-to-understand operating conditions.

In June 2024, the expanded meeting of the Party Committee of the State-owned Assets Supervision and Administration Commission of the State Council called for the implementation of the "Regulations on Accountability for the Prevention and Resolution of Financial Risks (Trial)" to strictly control the increase, and in principle, central enterprises should not set up, acquire, or participate in various financial institutions, and should not participate in or increase holdings in financial institutions that have little effect on the main business industry and have a large risk spillover.

This content is also referred to as the "Limit on Finance Order" by the market.

The pace of state-owned enterprises withdrawing from financial equity is accelerating, involving banks, brokers, insurance companies, funds, leases, futures, and other types of financial institutions.

Within a month of the introduction of the "Limit on Finance Order," the equity of Beijing Life Insurance, Jiangtai Insurance Brokers, and Huatai Insurance was successively listed for transfer.

Jiang Han, a senior researcher at Pangu Think Tank, believes that in addition to the "Limit on Finance Order," shareholders may choose to sell the equity of Huizhou Bank to recover funds, optimize asset allocation, or adjust the investment portfolio due to their own strategic adjustments or financial planning considerations.

In addition, changes in the market environment and the operating conditions of the bank may also affect the decision-making of shareholders.

"The shareholders must also comprehensively assess the profitability, market position, or future development prospects of Huizhou Bank.

If they fail to meet the shareholders' expectations, or if the shareholders find other more attractive investment opportunities, they will inevitably choose to exit," said Jiang Han.

According to the information, Huizhou Bank was established in April 1997, with its headquarters in Hefei, the capital of Anhui Province.

It is a regional joint-stock commercial bank formed by the reorganization of several urban commercial banks and urban credit cooperatives.

In November 2013, Huizhou Bank was listed on the Hong Kong Stock Exchange.

From an operational perspective, Huizhou Bank has maintained stable overall development in recent years.

From 2021 to 2023, the revenue of Huizhou Bank was 35.514 billion yuan, 36.23 billion yuan, and 36.365 billion yuan, with year-on-year growth of 9.98%, 2.01%, and 0.37%; the net profit attributable to the parent company was 11.46 billion yuan, 13.398 billion yuan, and 14.433 billion yuan, with year-on-year growth of 19.76%, 16.90%, and 7.73%.

The 2024 interim report shows that in the first half of the year, Huizhou Bank achieved a revenue of 20.692 billion yuan, a year-on-year increase of 4.57%; the net profit attributable to the bank's shareholders was 8.631 billion yuan, a year-on-year increase of 6.53%.

In terms of asset quality, as of the end of June this year, the non-performing loan ratio of Huizhou Bank was 1.14%, down 0.12 percentage points from the end of last year; the provision coverage ratio was 272.51%, up 0.57 percentage points from the end of last year.

In terms of shareholder structure, as of the end of June 2024, the main shareholders of Huizhou Bank's common stock are the Deposit Insurance Fund Management Co., Ltd. (with a shareholding ratio of 11.22%), Zhongjing Xinhua Asset Management Co., Ltd. and other "Zhongjing" companies (with a combined shareholding ratio of 10.59%), and Anhui Energy Group Co., Ltd. and its subsidiaries (with a combined shareholding ratio of 9.7%).

It is worth mentioning that as the second-largest shareholder of Huizhou Bank, the "Zhongjing" series has been entangled with the bank's board of directors for a long time.

The "Zhongjing" series suddenly attacked the Huizhou Bank shareholders' meeting in June this year, proposing to significantly increase the dividend ratio from the original 15% to 30%, and to trace back to two proposals in 2016.

From the final voting results of the shareholders' meeting, both proposals were not passed.

This is not the first time the "Zhongjing" series has raised objections to the dividend plan.

At the shareholders' meetings in 2016 and 2017, the "Zhongjing" series proposed new plans due to the low dividend ratio of the original plan, but neither was passed.