Hunan Finance's acquisition of Dazhihui's "suspension of review" was misinterpreted – it's not dead, review can resume with updated materials

Cailian Press, March 16 — (Reporter Lin Jian) How should the suspension of review be understood? The announcement from Xiangcai Shares on March 15 titled “Notice of Suspension of Review Received from Shanghai Stock Exchange for the Need to Update Declaration Documents and Financial Data” has raised many concerns, with some voices claiming the merger has fallen through. Clearly, this is a misinterpretation based on literal reading; the transaction process has not experienced any substantive changes.

Many investors express concern over this suspension of review

First, it must be clarified that Xiangcai’s merger with Dazhihui has indeed been suspended, but this is temporary. The announcement’s wording should not be misunderstood.

A suspension of review does not mean the process is terminated. It is a pause in the review process, and once issues are rectified and materials supplemented, an application can be immediately resubmitted to resume the review. The review process will then continue.

Termination of review, on the other hand, means the process is completely ended, and the transaction is declared failed. There is a fundamental difference between the two. This is a normal part of the merger review process and does not imply any substantive flaws in the transaction, nor does it mean the listed company or the other party have violated regulations. It also should not be equated with the termination of the transaction.

Why suspend the review? The reason lies in the timeliness of the declaration documents.

On one hand, the valuation report submitted for this transaction was valid until March 14, 2026. By the time the SSE made the suspension decision, this valuation report had officially expired. On the other hand, the latest audited financial statements referenced in the transaction were as of June 30, 2025, and this financial data will officially expire on March 31, 2026. Both core documents are in an expired state. According to regulatory requirements, they need to be updated and resubmitted for approval.

Cases triggered by document expiration issues are very common, especially from January to March each year, with peaks in February and March. The main reason is the audit cycle of annual reports and the validity period of financial and valuation data. Since 2025, over 50 similar procedural suspension cases involving Xiangcai Shares have been recorded on the SSE website, with 15 cases since 2026, including Bohai Auto, Shitou Shares, Huamao Technology, and others.

Reviewing announcements on the SSE website reveals many suspension notices

The announcements show that once all relevant supplementary updates are completed, Xiangcai Shares will immediately submit the updated application documents to the SSE and simultaneously request to resume the review process for this transaction. According to interviews, the review is expected to resume in April this year.

Why did this turn into a misunderstanding?

Many investors ask: since updating the expired materials is straightforward, why was the suspension of review initiated? The merger and restructuring review in capital markets has strict requirements on document timeliness. Once the core declaration documents expire, the review loses access to accurate and valid data. Continuing the review would violate regulatory standards and could compromise the fairness of the transaction. Suspension is the only compliant procedural choice.

This suspension was entirely within the expectations of all parties involved and is a necessary step in the process, not an unexpected negative event. Why did a routine compliance operation turn into a hotly debated misunderstanding? Mainly because the market is not familiar with the merger review process. In this transaction, the SSE only suspended the review; it did not indicate any substantive obstacle to the transaction, nor did it criticize the transaction plan or merger logic. The market misinterpreted the procedural pause as a failure of the deal, which is a mistake.

Additionally, the validity periods of valuation reports and financial statements are clearly defined. Listed companies and intermediaries are aware of these deadlines from the start of the application. The related update work has long been planned and is not a last-minute emergency.

The review is about to resume

Regarding this suspension, sources say that the involved parties have quickly initiated response measures, and the core materials are being updated in an orderly manner.

Xiangcai Shares’ announcement states that the company has teamed up with brokers, accountants, appraisers, and other intermediaries to fully promote the update of the valuation report and the supplementary audit of financial data. All processes are proceeding as planned. Once all updates are completed, the company will immediately submit the revised application documents to the SSE and request to resume the review.

From the perspective of the transaction itself, Xiangcai’s merger with Dazhihui represents a deep integration of securities brokerage licenses and fintech platforms, aligning with the trend of “Finance + Technology” in capital markets. Public information indicates that, so far, the cooperation intentions of all parties remain unchanged, the merger plan has not been adjusted, and there are no disagreements on key terms.

So, after the materials are updated, will the review smoothly resume? Past cases show that mergers suspended solely due to document expiration, once the materials are supplemented and regulatory checks are passed, have a very high success rate of resumption, with the review process typically quickly continuing.

What is the current status of the Xiangcai-Dazhihui merger?

In the first half of 2025, Xiangcai initiated plans to acquire Dazhihui through a share swap and raise supporting funds. After completion, this will help Xiangcai Securities achieve a leap in wealth management and other sectors.

On one hand, leveraging Dazhihui’s extensive experience in internet traffic operations and fintech R&D, Xiangcai Securities aims to expand client outreach, optimize online service scenarios, and make wealth management services more precisely tailored to different investor needs.

On the other hand, the collaboration in product systems and data technology will promote the transformation of Xiangcai Securities’ wealth management services from traditional to intelligent, enhancing customer experience and loyalty.

For more interpretations of this merger, Caixin has analyzed in articles such as “Is the Next ‘East Money’ Coming? Five Key Insights into Xiangcai’s Share Swap Merger with Dazhihui,” “As the Merger Advances, Xiangcai Securities’ Brokerage Profits Tripled, Highlighting ‘Finance + Wealth Management’ Model,” and “New Developments in ‘Xiangcai + Dazhihui’: ‘AI Investment Advisory’ May Not Be Far Off.”

Once the updated declaration materials are submitted and the review is resumed, if there are additional inquiries, Xiangcai will need to respond accordingly. After approval, the transaction will be submitted to the CSRC for registration. After receiving the registration approval, subsequent steps include shareholder meetings, share exchange, and new share listing registration, ultimately completing the merger.

(Cailian Press, Reporter Lin Jian)