New Progress In The Merger Of Guotai Junan And Haitong Securities

HONG KONG, Nov 24, 2024 - (ACN Newswire) - On November 21, Guotai Junan Securities (2611; 601211) and Haitong Securities (6837; 600837) announced significant progress in their merger,
issuing a joint circular to further clarify
the
details of merger and reorganization. In addition, Guotai Junan plans to raise up to RMB 10 billion to support the development of key business areas following the merger.

This merger holds significant symbolic importance,
not only
is it
the largest A+H dual-market merger in the history of China's capital market and the largest integration case of listed brokerage firms in the A+H
market, but it is also the first restructuring
case
of a leading brokerage firm under the latest
version
of Several Opinions of China's State Council on Further Promoting the Healthy Development of the Capital Market. Upon completion, the total assets and net assets of the merged entity will rank No.1 in China's securities industry.

Strong
Alliance
to Lead the Industry

According to the joint circular, as of the end of the third quarter of 2024, the combined net assets of the two companies
amounted to RMB 341.5 billion and the net capital amounted to RMB 177.4 billion, ranking No.1 in China's securities industry.
In the first three quarters of 2024, the combined net income from investment banking business amounted to RMB 3.1 billion, net interest income amounted to RMB 4.0 billion and the scale of funds raised amounted to RMB 145.8 billion, all ranking No.1 in China's securities industry.

After the merger, the two companies will unleash
win-win synergies in terms of capital utilization, service capability
and operational management. The merged entity will establish a new corporate governance structure, management framework, development strategy, and corporate culture. In accordance with
the requirements of corporate governance,
and based on the overall business objectives and strategic planning, it
will conduct a comprehensive integration of its business, assets, finances, personnel, and institutions, so as to
promote effective integration
of its
business and enhance
its
overall profitability.
At the same time, the post-merger
company will also have
stronger capital strength and a more balanced asset-liability structure, which will significantly enhance its risk tolerance, improve the efficiency of capital utilization, and the effect of capital utilization, thus
providing a solid financial foundation for future business development
and market response.

Integration and Reorganization to Achieve
Synergies

Both Guotai Junan Securities and Haitong Securities are large comprehensive
financial institutions, with leading positions in capital scale, profitability and
comprehensive capabilities. While both
companies
has their
own business focus, the merger will significantly enhance their comprehensive competitiveness, facilitate
the integration of resources
and
strategies, and complement
each other's
advantages to further strengthen their business capabilities.

Based on the aggregate figures in 2023, the two companies
will rank first in the industry
after the merger in terms of the number of retail customers,
the number of monthly active app users for retail customers,
the scale and number of IPO underwriters, the revenue from public fundraising positions, the scale of custodian outsourcing and other important business indicators, as well as the number of outlets in key regions such as the Yangtze River Delta, Beijing-Tianjin-Hebei, and the Pearl River Delta. Relying on a stronger and more stable customer base, more professional and comprehensive service capabilities, and more intensive and efficient operation management, the post-merger company will continue to enhance its retail, institutional and corporate customer service capabilities, and continue to increase customer stickiness and market share by capitalizing on its branding effect and economies of scale.

Raising RMB 10 Billion to Accelerate
the
Construction
of International World-Class Investment Bank

This time, Guotai Junan will raise a matching fund of not more than RMB 10 billion, which will be used for the internationalization of the post-merger company's business, trading and investment business, digital transformation and construction, and replenishment of working capital, so as to accelerate the development of the post-merger company into a first-class investment bank and enhance the ability to serve the real economy.

The post-merger company will comprehensively enhance its cross-border and global integrated capabilities in financial services, improving the linkage between its domestic and overseas businesses, resources and markets, so as to better participate in global competition and resource allocation on behalf of the Chinese financial industry in the global financial arena. This will help provide high quality global wealth management, investment management and cross-border financing services for global retail, corporate and institutional customers, striving to become a world-class investment bank that can meet various cross-border financing and global assets allocation demands from customers.

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