Dongwu Securities Plans to Acquire 83.77% Stake in Donghai Securities to Strengthen Yangtze River Delta Regional Competitiveness through Complementary Business Advantages

Yangtze Business Daily News ● Yangtze Business Reporter Xu Jia

Two major securities firms in Jiangsu Province announce integration plans.

Recently, Dongwu Securities (601555.SH) released a restructuring proposal. The listed company plans to issue shares and pay cash to acquire 83.77% of Donghai Securities, held by 61 trading counterparties, including Changzhou Investment Group Co., Ltd. The company’s stock will resume trading on March 16.

Yangtze Business Daily notes that, supported by policies, mergers and acquisitions have become an effective way for financial institutions to optimize resource allocation and enhance their ability to serve the real economy. Several securities firms have strengthened resource integration through M&A, significantly improving their comprehensive financial services.

This time, the integration of two local legal person securities firms in Jiangsu will complement each other’s strengths in business layout, resource endowment, and service capabilities. It will not only inject stronger financial momentum into Jiangsu and the Yangtze River Delta integration but also provide experience for regional financial resource optimization nationwide.

Based on the total assets data for the first half of 2025, after the transaction, Dongwu Securities’ total assets will reach 228.966 billion yuan, ranking from 22nd to 18th among listed securities firms, comparable to Zhongtai Securities.

Two securities firms’ restructuring plans announced

Before the market opened on March 2, Dongwu Securities suddenly announced that it planned to acquire control of Donghai Securities through issuing shares, and its stock was suspended from trading starting that day.

After several days, on the evening of March 13, the restructuring plan was released. The scope of Donghai Securities’ equity acquisition was confirmed, and trading will resume on March 16.

According to the transaction plan, Dongwu Securities intends to purchase 83.77% of Donghai Securities’ shares from 61 counterparties through issuing shares and paying cash.

Currently, the audit and valuation work for this transaction are not yet complete, and the valuation and pricing of Donghai Securities are not determined. The transaction is not expected to constitute a major asset reorganization.

Yangtze Business Daily notes that, besides the previously confirmed controlling shareholder of Donghai Securities, Changzhou Investment Group Co., Ltd. (hereinafter “Changtou Group”), other counterparties include Shan Jin Jin Control Capital, Changzhou Transportation Construction Investment Development Co., Ltd., Changzhou Urban Construction Group, and Changzhou Industrial Investment Group, all local state-owned enterprises.

In terms of transaction methods, Dongwu Securities plans to acquire a total of 66.5% of Donghai Securities’ shares from 32 counterparties, including Changtou Group and Shan Jin Jin Control Capital, through issuing shares and paying cash, with a ratio of 92% in shares and 8% in cash. For counterparties including Shandong Gold Venture Capital Co., Ltd., all acquisitions will be through issuing shares, totaling 17.28% of Donghai Securities’ shares.

Preliminary estimates suggest that after the transaction, Changtou Group will hold more than 5% of Dongwu Securities’ shares, making it a related party of Dongwu Securities.

The issuance price for this restructuring has been set at the average trading price of Dongwu Securities’ stock over the 20 trading days before the pricing date, at 9.46 yuan per share.

Additionally, lock-up periods for seven counterparties, including Changtou Group, Changzhou Transportation Construction Investment Development Co., Ltd., and Changzhou Urban Construction Group, are all set at 12 months.

Will become a benchmark for cross-city state-owned securities firm integration within the same province

Market observers see this acquisition as more than just a simple merger between two securities firms; it marks a significant step in the industry’s high-quality development through cross-city resource integration within Jiangsu Province.

Yangtze Business Daily notes that, supported by policies, M&A has become an effective way for financial institutions to optimize resources and improve their service to the real economy. Cases such as Guolian Securities + Minsheng Securities, Guotai Junan + Haitong Securities, Western Securities + Guorong Securities, Guoxin Securities + Wanhe Securities, and Zheshang Securities + Guodu Securities have been implemented, strengthening resource integration and significantly enhancing comprehensive financial service capabilities.

However, unlike these cases, Dongwu Securities and Donghai Securities are both local Jiangsu firms. Their integration will help strengthen Jiangsu’s local legal person securities firms and elevate the province’s financial development level.

Dongwu Securities also stated that, after the transaction, it will promote the interconnection and efficient collaboration of financial resources in Suzhou and Changzhou, as well as within the province, deepening the integration of industrial, innovation, and capital chains. This will support industry upgrades and the cultivation of new productive forces in Suzhou, Wuxi, and Changzhou, empower the construction of the Su-Xi-Chang metropolitan area, and better serve the Yangtze River Delta’s integrated development strategy.

From a business perspective, Dongwu Securities and Donghai Securities each have distinct regional layouts, business structures, and customer resources, with strong complementarities. Dongwu Securities has long focused on specialized, differentiated development, with competitive advantages in investment banking, bonds, research, and proprietary trading. Donghai Securities, rooted in Changzhou and deeply engaged in the Yangtze River Delta, has strengths in wealth management, fixed income, futures, and derivatives.

After acquiring Donghai Securities, Dongwu Securities can expand its core base from Suzhou to the Su-Xi-Chang metropolitan area, strengthening its overall competitiveness in the Yangtze River Delta, increasing capital strength, expanding market share, optimizing its business structure, and breaking through development bottlenecks. The combination will also realize advantages in business layout, resource endowment, and service capabilities, generating synergy and improving operational efficiency.

Data shows that from 2023 to the first half of 2025, Donghai Securities achieved operating revenues of 650 million yuan, 1.469 billion yuan, and 815 million yuan, with net profits attributable to shareholders of -492 million yuan, 23.487 million yuan, and 106 million yuan, respectively.

During the same period, Dongwu Securities recorded operating revenues of 11.281 billion yuan, 11.534 billion yuan, and 4.428 billion yuan, with net profits attributable to shareholders of 2.002 billion yuan, 2.366 billion yuan, and 1.932 billion yuan.

As of the end of June 2025, Donghai Securities’ total assets were 57.098 billion yuan, and Dongwu Securities’ were 171.868 billion yuan.

After the simple consolidation, in the first half of 2025, Dongwu Securities’ revenue will reach 5.243 billion yuan, ranking from 20th to 18th among A-share listed securities firms. By the end of the year, Dongwu Securities’ total assets will be 228.966 billion yuan, moving from 22nd to 18th place among listed securities firms, comparable to Zhongtai Securities.