Zhong Guo Jing Ying Bao·2025-11-20 04:16Core Viewpoint - The merger of China International Capital Corporation (CICC), Dongxing Securities, and Xinda Securities marks a significant consolidation in the securities industry, expected to create a new major player with total assets exceeding 1 trillion yuan [2][3]. Group 1: Merger Announcement - CICC, Dongxing Securities, and Xinda Securities announced a suspension of trading starting November 20, with the suspension expected to last no more than 25 trading days [1]. - The merger involves CICC acquiring Dongxing and Xinda through a share exchange, indicating a strategic move towards consolidation in the securities sector [1][2]. Group 2: Financial Metrics Post-Merger - If the merger is successful, the combined total assets of the three firms will reach 1,009.58 billion yuan, making it the fourth-largest securities firm in China, following CITIC Securities, Guotai Junan, and Huatai Securities [2][3]. - The combined revenue of the three firms is projected to be 27.39 billion yuan, with a net profit attributable to shareholders of 9.52 billion yuan [3]. Group 3: Individual Company Performance - CICC reported a revenue of 20.76 billion yuan for the first three quarters of 2025, a year-on-year increase of 54.36%, with a net profit of 6.57 billion yuan, up 129.75% [3]. - Dongxing Securities achieved a revenue of 3.61 billion yuan, reflecting a 20.25% increase, and a net profit of 1.60 billion yuan, up 69.56% [3]. - Xinda Securities recorded a revenue of 3.02 billion yuan, a 28.46% increase, with a net profit of 1.35 billion yuan, up 52.89% [4]. Group 4: Strategic Rationale - The merger is characterized as a "big" acquiring "small," which is expected to yield greater synergies due to the distinct business focuses of the firms involved [5][6]. - CICC is recognized for its strengths in investment banking and cross-border business, while Dongxing Securities focuses on asset management and wealth management, and Xinda Securities specializes in mergers and restructuring [6]. Group 5: Central Huijin's Role - Central Huijin, the controlling shareholder of the three firms, is initiating a new round of consolidation in the securities sector, having previously controlled several other securities firms [7][8]. - Central Huijin holds significant stakes in multiple securities firms, indicating a strategic push for consolidation within its portfolio [8]. Group 6: Industry Context - The merger occurs amid a broader trend of consolidation in the securities industry, driven by regulatory support for larger firms and the need for enhanced competitiveness [9]. - Recent mergers in the industry, such as Guolian Securities and Minsheng Securities, signal a shift towards larger, more capable entities in the market [9].