Founder Securities 1.09 Billion Shares Flow Auction, Two Potential Buyers Have Not Sold, Securities Industry Said The Starting Price Is Too High

On June 21, Founder Securities (601901. SH) announced that 1.09 billion shares of the company's equity were eventually sold out because no one offered.

A month ago, 1.09 billion shares of Founder Securities "appeared" on the Alibaba judicial auction platform, with a starting price of 8.876 billion yuan.

The stock rights of the securities companies which are very rich in gold are not accepted.

According to public information, the shares of this judicial auction are all shares held by Beijing Zhengquan Holding Co., Ltd. (hereinafter referred to as "Zhengquan Holdings"), the second largest shareholder of Founder Securities, accounting for 13.24% of the total equity of Founder Securities.

After the relevant equity flow auction, on June 22, the stock price of Founder Securities fluctuated, falling by 1.8%. The company's shares fell 1.06% to 9.34 yuan / share by midday.

According to the regulations, the price of the second auction can be reduced as appropriate

Based on the initial auction price, the price of Founder Securities per share is 8.15 yuan, which is 91.2% of the closing price of 8.93 yuan / share on the day of the company's equity auction on May 21. In recent months, the stock price of Founder Securities has recovered, standing at the 9 yuan / share level.

"We can't judge the auction price by the market price. If such a large proportion of shares are transferred, there will be further discount." For the current equity flow auction of Founder Securities, some people in the securities industry said the auction price was too high.

The 13.24% equity of Founder Securities in this auction is all shares held by Zhengquan holding, the second largest shareholder of the company.

From 2008 to 2014, Guo Wengui, the former actual controller of Zhengquan Holding Co., Ltd., who was already at large, decided to purchase the equity of national securities in the name of Zhengquan holdings and realize the control in the name of Zhengquan holding. In the process of acquiring National Securities equity and increasing capital and shares, Guo Wengui intervened in a series of abnormal ways to threaten and crowd out competitors, which finally made Zhengquan holding realize the purpose of controlling national securities.

Subsequently, Zhengquan holdings also pushed for the merger and reorganization of national securities by Founder Securities. In order to ensure the smooth implementation of the restructuring plan, Zhengquan holdings repeated its old technology, forcing other shareholders of national securities to give up capital increase. Before the merger with Founder Securities, Zhengquan holdings already held 84.4% of the national securities. During this period, Zhengquan holdings also took more than 2 billion yuan of national securities for investment.

A series of illegal and criminal acts made Zhengquan holding company bear the charge of forced trading and withdrawing capital. It also led to the auction of its shares in Founder Securities.

However, according to the provisions of the Supreme People's Court on the auction and sale of property in the civil execution of the people's court, after the property of the person subjected to execution is sealed up, detained or frozen, the people's court shall timely auction, sell off or take other enforcement measures. Among them, the first auction shall not be lower than 80% of the assessed price or market price. If there is no auction, the reserve price can be reduced as appropriate, but the amount reduced each time shall not exceed 20% of the previous reserve price.

If the second auction still fails, the court may price the assets to the applicant for enforcement or other enforcement creditors to pay off the debts. If the assets cannot be delivered to pay off the debts, a third auction shall be held within 60 days. If the auction fails again, the relevant assets will be sold off by the court.

"The assets of Founder Securities are undoubtedly of high quality. In addition to the securities business license, its subsidiaries also hold various kinds of licenses such as public offering and futures." The securities industry said.

According to the public information, in 2020, Founder Securities achieved a revenue of 7.542 billion yuan, an increase of 14.36% over the same period last year. The net profit attributable to shareholders of listed companies was 1.096 billion yuan, an increase of 8.82% over the same period of last year. In the first quarter of 2021, the company achieved operating revenue of 2.049 billion yuan, with a year-on-year growth of 5.83%, and a year-on-year increase of 134.53% to 889 million yuan.

According to the latest data released by China Securities Association, by the end of 2020, the total assets and net assets of Founder Securities reached 10.492 billion yuan and 3.871 billion yuan respectively, ranking 19th and 15th in the industry. The company's revenue and net profit indicators ranked 19th and 33rd respectively in the industry.

In addition, Founder Securities also holds wholly-owned founder underwriting sponsor, founder Hesheng investment, Founder Securities Investment, founder Hong Kong holding, while holding two subsidiaries of Founder medium-term futures and founder Fubang fund. Its licenses cover investment banking, futures, public offering, private placement and overseas business.

Ping An and Cinda may have purchase intention

It is the high-quality assets of Founder Securities that China Cinda has been seeking for part of the equity of Founder Securities.

In addition to the above 1.09 billion shares auctioned, Zhengquan holding holds the remaining 710 million shares of Founder Securities, which has been awarded by Dalian intermediate people's court to compensate for the civil creditor's rights of 6.09 billion yuan enjoyed by guoxintuo Co., Ltd. (hereinafter referred to as "guotongtuo") for Zhengquan holding. According to the trust contract, To distribute the trust interests to the trust beneficiary China Cinda Asset Management Co., Ltd. (hereinafter referred to as "China Cinda") in the original state of the trust property, and distribute 710 million shares of the company to China Cinda. The company has submitted the relevant application to the CSRC, and the matter is still in the process of examination and approval.

Some people close to China Cinda said that the reason why China Cinda accepted the equity of Founder Securities as the distribution scheme of trust benefits was also in favor of its high-quality assets as a licensed securities company“ Personally, I expect Cinda will do more financial investment and will not take Founder Securities all the time. "

At present, Cinda securities, a subsidiary of China Cinda securities company, has submitted an application for listing to the regulatory authorities to rush for a shares in person, which has limited demand for the resources of listed securities companies.

In addition to China Cinda, Ping An Group, which is responsible for the bankruptcy and reorganization of Founder Securities parent company, may also be interested in related assets.

On April 30, the bankruptcy reorganization draft of Founder group published by Ping An Group on the official website of Shanghai Stock Exchange showed that the company said it would authorize Ping An Life to acquire 51.1% - 70% of the equity of new Founder group at the consideration of 37.05 billion yuan - 50.75 billion yuan. After the reorganization, Ping An of China will take control of new Founder group.

Ping An Group will also acquire equity, creditor's rights and other assets in the medical, financial, information technology, education, commerce and real estate sectors of new Founder group. Among them, the financial sector mainly takes Founder Securities Co., Ltd. and founder Life Insurance Co., Ltd. of Peking University as the core subjects, and its business scope covers securities, futures, funds, insurance and other fields.

"The market is speculating that in order to Ping An Securities will backdoor Founder Securities Listing, the two securities companies will have further integration space." Some people in Beijing securities industry said.

On May 20, at the online performance presentation meeting held by Founder Securities, investors asked whether Ping An group had sent people to settle in Founder Securities.

In this regard, Shi Hua, chairman of Founder Securities, said that in the pre transition period before the court's ruling, in order to do a good job in the operation and supervision of Founder group, the investor observers entered the site under the permission of the manager, mainly to understand the management's supervision on Founder Group and its subsidiaries, but did not express opinions or participate in decision-making.

As for whether there is a possible merger opportunity for the company, Shi Hua only said that the draft reorganization plan of Founder group still needs to be deliberated by the creditors' meeting and the court's ruling, and there is still uncertainty. Please pay attention to the company's announcement for the follow-up progress.