The troubled Asia-Pacific Property Insurance has had its equity put up for auction again.

Recently, the JD.com asset trading platform disclosed that Chongqing Three Gorges Fruit Industry Group (referred to as 'Three Gorges Fruit Industry') will auction 10% equity of Asia-Pacific Property Insurance held by them on November 18th by the Qingdao Intermediate People's Court.

The starting price of this equity is 0.13 billion yuan, with an assessment price of 0.186 billion yuan.

This is the second time Three Gorges Fruit Industry has faced public auction of Asia-Pacific Property Insurance equity.

In 2022, Shenzhen Intermediate People's Court had also previously sold 1.68% equity of Asia-Pacific Property Insurance held by Three Gorges Fruit Industry on the Alibaba Asset Judicial Auction Platform.

Over 2 years, this equity has been through 3 failed auctions, with a starting price at a 20% discount yet still difficult to find buyers, eventually it was ruled to be transferred to Shaanxi International Trust A (000563.SZ) as debt repayment.

In the 2015 shareholder 'shuffle', Three Gorges Fruit Industry spent 0.28 billion yuan to acquire 14% equity of Asia-Pacific Property Insurance.

As of October 24, 1.68% of the equity has been owned by Shaanxi International Trust, 10% is about to face judicial auction, and the remaining 2.32% has already been frozen.

Amid the market downturn, Asia Pacific Property & Casualty Insurance's PB (Price-to-Book ratio) continues to decline.

Based on historical auction prices, the initial auction PB in 2022 was still 1.7, but by October this year, it had dropped to 0.78.

However, the actual PB may be even lower.

Multiple judicial auction platforms show that the failure of the auction of Asia Pacific Property & Casualty Insurance's equity has become the norm.

In 2020-2021, the 17.3% equity and 2.7% equity of China Union Holdings (referred to as 'China Union') in Asia Pacific Property & Casualty Insurance have both been auctioned multiple times but ended up being transferred to Minsheng Trust with a 'debt-for-equity swap'.

From the current situation, the market is not enthusiastic about the upcoming auction of 10% equity, with only 195 people observing and no bidders.

Asia-Pacific Property and Casualty Insurance had previously stated that the company is actively promoting the war-waging work, but it seems to have little effect at the moment.

Insiders in the industry pointed out that currently, small and medium-sized insurance companies frequently encounter cold reception of equity, which is related to poor corporate governance and declining profitability.

The predecessor of Asia-Pacific Property was 'Minan Property Insurance Co., Ltd.', which has been established for over 80 years since 1943.

After the shareholder 'shuffle' in 2015, XinHualian, Yili Resources Group, Three Gorges Fruit Industry, along with 'Fanhai Group'-owned Wuhan Central Business District (referred to as 'Wuhan Zhongshang') took over equity stakes with proportions of 20%, 15%, 14%, and 51% respectively.

After holding shares for 5 years, all 5 shareholders encountered changes.

XinHualian's 20% equity, after multiple failed auctions, was 'swapped for debt' and transferred to Minsheng Trust under Wuhan Zhongshang, but this transfer has not received regulatory approval to date;

Following the debt crisis of 'Fanhai Group', Wuhan Zhongshang's 51% equity was frozen in 2022, later appearing as pledged collateral in the creditor transfer notice published by Great Wall Assets;

In the same year, Wuhan Zhongshang was reported by the former China Banking and Insurance Regulatory Commission as one of the 'fifth batch of major illegal and non-compliant shareholders'.

As of the end of the second quarter of 2024, only 1.68% of the equity held by shaanxi international trust in the equity structure of Asia-Pacific Property Insurance is in a normal state, while the remaining 98.32% are either pledged or frozen.

The impact of equity status on corporate governance is inevitable.

The current board of directors of Asia-Pacific Property Insurance has 9 directors, including Chairman Zang Wei, Vice Chairman Liu Guosheng, President Yu Haibo, and Director Li Shuxiao. All 4 directors are nominated by the major shareholder, Wuhan Zhongshang.

According to the 'Regulations on the Supervision of Major Shareholders' Actions in Banks and Insurance Institutions (Trial)', when the number of pledged shares by a major shareholder of an insurance institution exceeds 50% of the shares held, the major shareholder and its nominated directors cannot exercise voting rights at shareholders' (general) meetings and board meetings.

This also means that nearly half of the directors of Asia-Pacific Property Insurance do not have voting rights.

With frequent 'thunderstorms' among shareholders, the operational capability of Asia-Pacific Property Insurance has also faced challenges.

From 2015 to 2021, revenue continued to grow from 2.522 billion yuan to 6.094 billion yuan, then fell to 5.389 billion yuan in 2023.

But the profit-making ability has always been limited.

From 2017 to 2020, net profit increased from 0.014 billion yuan to 0.061 billion yuan; subsequently fluctuated, resulting in losses in 2021 and 2023.

From 2014 to 2023, Asia Pacific Property & Casualty Insurance has accumulated a net loss of 1.647 billion yuan.

In the first half of 2024, Asia Pacific Property & Casualty Insurance's insurance business revenue decreased by 6.93% year-on-year to 2.875 billion yuan, while net profit attributable to the parent company turned from a loss of 0.036 billion yuan to a profit of 0.003 billion yuan.