Late-night breaking news! Huijin plays its trump card: CICC's "Swallowing the Elephant" behind the trillion-yuan strategy

On the night of November 19th, a major announcement suddenly emerged from the Chinese securities industry!

CICC, Dongxing Securities, and Cinda Securities, all controlled by Central Huijin Investment, simultaneously announced significant asset restructuring, with the three brokerages set to achieve a "three-in-one" merger, becoming another "brokerage aircraft carrier" in China.

Based on the number of employees reported in 2024, the combined total of employees from CICC, Cinda Securities, and Dongxing Securities will reach 19,985, surpassing the employee numbers of Guotai Junan, Huatai Securities, CITIC Securities, and China Galaxy during the same period, closely trailing the industry leader, CITIC Securities.

CICC expressed optimism to Wall Street Journal and Zhitongcaijing, stating, "The business advantages and characteristics of CICC naturally complement those of the other two securities firms."

However, the industry sees that with CICC merging with Dongxing and Cinda, the ranking of brokerages is further changing, with an increasing number of brokerage firms with total assets exceeding one trillion emerging, making the current wave of brokerage mergers comparable to the peak period in the early 2000s.

Details of the Restructuring Worth Noting

According to the announcement, the restructuring method involves CICC planning to absorb and merge Dongxing Securities and Cinda Securities through the issuance of A-shares to all A-share shareholders of Dongxing Securities and Cinda Securities.

It is noteworthy that all three brokerages are companies under the actual control of Central Huijin Investment, effectively merging three brokerages under the same actual controller into one.

This merger model is quite similar to the merger of Guotai Junan and Haitong Securities into Guotai Haitong, which also involved brokerages under the same actual controller.

According to the new "National Nine Articles" and the China Securities Regulatory Commission's "Opinions on Strengthening the Supervision of Securities Companies and Public Funds to Accelerate the Construction of First-Class Investment Banks and Investment Institutions (Trial)," support will be given to leading institutions to enhance their core competitiveness through mergers and acquisitions and organizational innovation, aiming to form 2-3 investment banks and investment institutions with international competitiveness by 2035.

Clearly, the merged "CICC + Dongxing + Cinda" has a greater possibility of entering the aforementioned ranks.

Trillion-Level Brokerages "Surface"

If we align the timeline of the third quarter of 2025, the merger proposal of CICC, Dongxing Securities, and Cinda Securities has already revealed a competitive new landscape in the industry.

From a financial metrics perspective:

CICC achieved an operating income of 20.761 billion yuan in the first three quarters of this year, a year-on-year increase of 54.36%; the net profit attributable to shareholders reached 6.567 billion yuan, a year-on-year increase of 129.75%. As of the end of the third quarter, the total assets of this giant reached 764.941 billion yuan.

Dongxing Securities reported a revenue of 3.610 billion yuan in the first three quarters, a year-on-year increase of 20.25%; the net profit attributable to shareholders was 1.599 billion yuan, a year-on-year increase of 69.56%, with total assets of 116.391 billion yuan.

Cinda Securities recorded a revenue of 3.019 billion yuan in the first three quarters, a year-on-year increase of 28.46%; the net profit attributable to shareholders was 1.354 billion yuan, a year-on-year increase of 52.89%, with total assets of 128.251 billion yuan.

If we sum the balance sheet sizes of the three brokerages after the merger, the future total assets of the giant brokerage will exceed 1,009 billion yuan, with net profits approaching 10 billion in the first three quarters of this year, all ranking among the industry's top players In terms of total assets, the combined size of "CICC + Dongxing + Cinda" is sufficient to rank fourth in the Chinese securities industry, only behind CITIC Securities, Guotai Junan, and Huatai Securities.

According to the ranking of net profit attributable to shareholders after the merger of the third quarterly reports, "CICC + Dongxing + Cinda" ranks behind CITIC Securities, Guotai Junan, Huatai Securities, China Galaxy, and GF Securities, entering the top six in the industry.

Based on the number of employees in the 2024 report, CICC, Cinda Securities, and Dongxing Securities have 14,523, 2,792, and 2,670 employees respectively. The total number of employees for the three merged brokerages is 19,985, which exceeds the same period's Guotai Junan, Huatai Securities, CITIC Securities, and China Galaxy, closely following CITIC Securities, which has over 20,000 employees, ranking second in the industry.

CICC Responds Late at Night

CICC stated to Wall Street News and Zhitong Finance: "CICC's business advantages and characteristics naturally complement those of the other two securities companies."

Regarding the complementarity, CICC explained: The deep accumulation of networks, clients, and capital resources by Dongxing Securities and Cinda Securities will leverage CICC's comprehensive investment banking, professional investment, cross-border trading services, and wealth management capabilities to create complementary advantages.

"After the share swap, leveraging the expertise of the two asset management companies' shareholders in the field of non-performing asset disposal, CICC can further deepen its service capabilities in debt restructuring, risk resolution, and industrial investment banking, expanding the collaborative incremental space for new types of investment banking business," CICC stated.

Regarding the actions after the merger, CICC indicated: It will enhance capital strength, achieve client resource integration, and further consolidate its leading advantage in the competitive landscape of the securities industry.

Major Changes in Industry Landscape

This round of mergers involving the Huijin system may also put pressure on other large brokerages that have not merged. With the increasing enthusiasm for industry restructuring, new "aircraft carriers" are expected to emerge in the future.

Currently, there are many companies under the same actual controller or with common substantial shareholders, making further changes in the industry landscape quite likely.

Additionally, the shareholders and related institutions of Guotai Junan, CICC, and others that merged at the beginning of this year still have "follow-up" assets, which may prolong the heat of subsequent mergers in the securities industry.

Trading Suspension for the Three Involved Companies

CICC, Dongxing Securities, and Cinda Securities have all announced: In light of the significant uncertainties surrounding the aforementioned matters, to ensure fair information disclosure, protect investors' interests, and avoid abnormal fluctuations in the company's stock price, A-shares will be suspended from trading starting from the opening of the market on November 20, 2025 (Thursday).

It is worth noting that CICC emphasized in the announcement: "This restructuring involves the simultaneous absorption and merger of two A-share listed companies by A+H share listed companies, with many involved matters and a relatively complex process. According to the relevant regulations of the Shanghai Stock Exchange, the suspension period is expected to be no more than 25 trading days."

Furthermore, CICC's announcement also pointed out: The specific cooperation plan for this restructuring will be based on the transaction documents further signed by the three parties