Increasing holdings twice in three days! Anhui State-owned Assets Supervision and Administration Commission invests nearly 500 million yuan, firmly optimistic about Hua'an Securities

Listing | Zhongfang.com

Review | Li Xiaoyan

Recently, Hu’an Securities has been actively engaging in capital operations, entering a critical development window. The company’s controlling shareholder, Anhui State-owned Capital Operation Holding Group Co., Ltd. (referred to as “Anhui Guokong Group”), has made three consecutive rounds of share increases. Through convertible bond acquisitions and conversions, they have invested nearly 500 million yuan in total, demonstrating a firm confidence in the company’s long-term value with real capital. This move effectively alleviates the repayment pressure at bond maturity, stabilizes the equity structure, and lays a solid foundation for the company’s expansion into capital-intensive businesses. Amid the high-quality transformation wave in the brokerage industry, Hu’an Securities is forging a unique development path that combines stability and growth.

On March 3rd, Hu’an Securities announced a new share increase plan. Anhui Guokong Group intends to continue increasing its holdings from March 4th to 6th by purchasing Hu’an convertible bonds and converting them into shares, with an amount not less than 100 million yuan and not exceeding 200 million yuan. Just two days earlier, the controlling shareholder quickly completed the previous round of share increases, investing about 283 million yuan in just two trading days, converting approximately 44.5673 million shares, accounting for 0.94% of the total share capital. Earlier, Anhui Guokong Group completed its first small-scale test from February 26th to 27th, involving about 4.5076 million yuan. From tentative positioning to large-scale implementation and rapid additional investments, these three rounds of operations are progressing in a layered, clear rhythm, forming a precise and efficient capital strategy.

This series of increases coincides with a critical point as Hu’an convertible bonds approach maturity. Data shows that Hu’an convertible bonds will mature on March 12, 2026, with a redemption price of 107 yuan per bond (including tax). As of the end of 2025, the unconverted balance was about 2.799 billion yuan; under continuous promotion by the controlling shareholder, it has decreased to 1.782 billion yuan as of March 3rd. After the third round of increases, the unconverted scale will further shrink significantly. For listed companies, the controlling shareholder actively undertaking bond conversions can significantly reduce the cash flow impact of large-scale repayments at maturity, optimizing financial structure; for shareholders, this move effectively hedges the risk of equity dilution caused by concentrated bond conversions, consolidates the position of the state-owned controlling shareholder, and balances stable governance with capital efficiency.

Compared to conventional methods such as direct secondary market purchases or targeted private placements, this “bond purchase + conversion” approach is more market-oriented and gentle. It achieves the goal of increasing holdings while reducing short-term impacts on secondary market stock prices, reflecting the mature capital operation capabilities and sense of responsibility of state-owned shareholders. Currently, the valuation of the brokerage industry remains at historically low levels. The controlling shareholder’s counter-cyclical increase not only affirms the company’s fundamentals but also provides strong market support, signaling long-term optimism and confidence in holding.

From an industry perspective, increasing local state-owned capital in brokerage shares has become a trend. Southwest Securities’ 6 billion yuan private placement and Tianfeng Securities’ 4 billion yuan private placement have both received strong support from local state-owned capital, with long-term lock-in periods, highlighting the strategic importance of the brokerage sector to state assets. In the context of wealth management transformation and expansion into capital-intensive businesses, net capital has become a key indicator of core competitiveness for brokerages. High-growth sectors such as investment banking, derivatives, cross-border business, and proprietary trading all rely on sufficient capital support. Continued capital injection by state-owned entities reflects their recognition of the pivotal role brokerages play in serving the real economy and regional industrial upgrades, using capital empowerment to strengthen and optimize local financial institutions.

Hu’an Securities is currently in a period of simultaneous business expansion and capital replenishment, with a series of strategic layouts steadily advancing. In January, the company announced plans to invest 26.4616 million yuan to increase its stake in Huafu Fund by 2%, achieving control and enhancing its wealth management portfolio. In February, the company was approved to inject 500 million Hong Kong dollars into its Hong Kong subsidiary Hu’an Financial Holdings to accelerate cross-border business development. Meanwhile, the company continues to deepen its focus on hard technology equity investments, participating in key projects like Changxin Technology, leveraging Anhui’s “chip, display, automotive, and energy” industrial cluster to create a “investment + investment banking + research” three-pronged model. These initiatives are capital-consuming, long-term value-driven businesses that require stable capital support and shareholder backing. The controlling shareholder’s timely additional investments are just right.

In terms of performance, Hu’an Securities is expected to achieve high-quality growth in 2025. The performance brief shows that the company’s total operating revenue for the year reached 5.064 billion yuan, a year-on-year increase of 30.94%; net profit attributable to shareholders after non-recurring gains and losses was 2.078 billion yuan, up 40.64%, with both scale and growth rate ranking among the industry’s top. All business segments are working synergistically: brokerage, credit, and proprietary trading contribute steadily, while investment banking has seen explosive growth, with first-half revenue of 111 million yuan, a year-on-year increase of 214.50%. Although investment banking revenue is currently based on a low base and accounts for a small proportion of total revenue, ongoing regional resource releases and deep integration of the “three-in-one” model are expected to rapidly address shortfalls and become new growth engines.

Of course, the company also faces some stage-specific challenges. Industry-wide, market volatility, declining commission rates, and intensified competition still pose uncertainties for brokerage performance; internally, the scale of investment banking remains behind leading firms, and the long cycle and slow returns of capital-intensive businesses demand higher risk management and capital allocation capabilities. Additionally, after bond conversion, the total share capital will increase, potentially diluting earnings per share in the short term. Overall, these challenges are industry-wide and part of development, unlikely to alter the company’s long-term positive trend.

Looking ahead, Hu’an Securities’ development logic is clear and promising. On the capital side, continuous support from the controlling shareholder will strengthen the equity structure and facilitate smoother capital replenishment channels, providing ample resources for expansion; on the business side, wealth management, cross-border finance, and industrial investment banking will flourish, closely aligning with Anhui’s innovation-driven industrial upgrade; on governance, the combination of state-owned background and market-oriented mechanisms will balance prudent operation with innovative vitality. Under the triple drives of state backing, performance support, and strategic clarity, the company is expected to seize opportunities amid industry segmentation, transitioning from a regional leader to a nationally recognized boutique brokerage with distinctive features.

This nearly 500 million yuan increase is not just a capital move but marks the beginning of Hu’an Securities’ new development stage. With enhanced capital strength, optimized business structure, and deepened regional advantages, Hu’an Securities will better serve as a leading local financial institution, contributing to the real economy and technological innovation, while achieving synchronized growth in both market value and intrinsic value, creating long-term stable returns for investors.