According to the Zhito Finance APP, on the evening of November 21, GTJA (601211.SH) and Haitong Sec (600837.SH) released a joint circular on the Hong Kong Stock Exchange and a merger and reorganization report (draft) on the Shanghai Stock Exchange, disclosing more details about the share swap absorption merger.

According to the trading plan, GTJA will issue A-share stocks to all shareholders of Haitong Sec's A-shares at a share swap price of 13.83 yuan per share; at the same time, it will issue H-share stocks to all shareholders of Haitong Sec's H-shares at a share swap price of 7.73 Hong Kong dollars per share (based on the average H-share stock transaction price over the 60 trading days prior to the pricing benchmark). The share swap ratio is 1:0.62, meaning each share of Haitong Sec's A-shares or H-shares can be exchanged for 0.62 shares of GTJA's A-shares or H-shares.

As more details are finalized, this merger, the largest A+H bilateral market absorption merger in the history of China's capital markets, is accelerating expansion.

Reshaping the competitive landscape of brokerages and creating an internationally renowned investment bank.

GTJA and Haitong Sec are among the oldest and largest comprehensive brokerage firms in the country, both successfully navigating the entire development process and various cycles of China's capital markets. This transaction is undoubtedly a strong alliance that deserves to be recorded in the annals of capital market history.

With the completion of the merger, the functional positioning of the merged company will be further strengthened. In addition to a significant leap in capital and business strength, the company will also further raise funds to benchmark against international standards, accelerating its progress towards becoming an investment bank with international competitiveness and market leadership.

According to Zhikong Finance APP, as of the end of the third quarter of 2024, after the merger of gtja and haitong sec, the net assets are 341.5 billion yuan and net capital is 177.4 billion yuan, both ranking first in china's securities industry.

Among them, the net asset per share increased from 17.02 yuan to 18.38 yuan, while the debt-to-asset ratio decreased from 75.02% to 72.74%. Stronger capital strength and a more balanced asset-liability structure will significantly enhance the merged company's risk tolerance, improve capital utilization efficiency and fund effectiveness, providing a solid financial foundation for future business expansion and market response.

In addition, based on the total data from 2023, after the merger, the number of retail clients, monthly active retail client APP users, IPO underwriting scale and number, public fund division income, asset custody outsourcing scale, and other important business indicators, as well as the number of outlets in key regions such as cni yangtze index, jing-jin-ji, and cni zhujiang index are all ranked first in china's securities industry.

In the first three quarters of 2024, the net income from investment banking business after the merger of the two companies is 3.1 billion yuan, net interest income is 4 billion yuan, and the scale of loaned funds is 145.8 billion yuan, all ranking first in china's securities industry.

On the other hand, gtja will also raise no more than 10 billion yuan in funds based on this stock swap absorption merger, which is planned to be used for the international business, trading investment business, digital transformation construction, and to supplement operating funds after the merger, helping the merged company accelerate the creation of a leading investment bank and enhance the service capabilities to the real economy.

In this regard, industry insiders believe that both gtja and haitong sec are large comprehensive brokerages, and this merger aligns with the strategic development direction of both companies, benefiting both parties to share professional capabilities and client resources, enhance customer service capabilities, improve centralized management levels and operational efficiency; it also facilitates complementary advantages, improves layouts in key areas, key industries, and key regions, comprehensively enhances risk resistance, strengthens core competitiveness, and better fulfills responsibilities and missions, enhancing service capabilities to the real economy.

Seize historical development opportunities to help build a strong financial nation.

In October last year, the central financial work conference emphasized the importance of capital markets from the perspective of top-level design, proposing to 'accelerate the construction of a strong financial country', 'cultivate leading investment banks and investment institutions', and 'support state-owned large financial institutions to excel and strengthen', emphasizing the need to 'unswervingly follow the path of financial development with Chinese characteristics.'

As a financial powerhouse, it should possess a series of key financial core elements. Strong financial institutions are not only the cornerstone and support force for promoting high-quality economic and social development but also an important vehicle for maintaining financial stability and enhancing national comprehensive strength.

In April of this year, the State Council released the new 'National Nine Articles,' proposing to 'support leading institutions in enhancing core competitiveness through mergers and acquisitions, organizational innovation, and other means.' The China Securities Regulatory Commission also concentrated on issuing related supporting policy documents, clearly stating the goal of 'forming 2 to 3 investment banks and investment institutions with international competitiveness and market leadership by 2035.'

Against this backdrop, the strong alliance between gtja and haitong sec precisely meets this historic development opportunity in the industry.

According to gtja and haitong sec, after the merger, the company will establish a new corporate governance structure, management structure, development strategy, and corporate culture. Based on corporate governance requirements and overall operational goals and strategic planning, a comprehensive integration of business, assets, finances, personnel, and institutions will be conducted to promote effective business integration and enhance overall profitability.

In terms of business synergy, both parties will also fully integrate to promote the release of synergies. For example, in capital utilization, taking advantage of both existing platforms and capital strengths, further optimizing asset allocation, improving capital utilization efficiency, and enhancing business scale and operational performance.

In terms of service capability, both parties will integrate business resources, optimize business structure, leverage scale effects, achieve coordinated development of businesses and complementary advantages, enhance service capabilities, improve operational efficiency, and build comprehensive leading core competitiveness. In terms of operational management, both will leverage their talent advantages and management experience to improve governance levels and management efficiency, lower operational costs, fully release synergy effects, and accelerate the process towards becoming a first-class investment bank with international competitiveness and market leadership.

Currently, China's capital markets possess the world's largest and most active investor group. The merger is expected to reshape the competitive landscape of the industry and form a diversified financial product and service system that meets investor needs.