Guosen Securities plans to buy 53% of Vanho, heeding China’s call for brokers to combine

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Shenzhen’s regulator of state-owned assets pushes move under Beijing’s effort to create bigger firms to compete with global leaders

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Investors monitor stock price movements at a securities company in Shanghai on September 24, 2021. Photo: AFP

Zhang Shidongin Shanghai

Published: 4:15pm, 22 Aug 2024

Guosen Securities plans to buy control of a smaller rival in China’s technology hub of Shenzhen, answering the government’s call to consolidate the nation’s 12 trillion yuan (US$1.68 trillion) brokerage industry.

Shenzhen-based Guosen signed an agreement on Wednesday to buy 53 per cent of Vanho Securities in shares, according to a statement to the city’s stock exchange. The financial terms of the purchase will be announced within 10 days, said Guosen.

The takeover is being nudged by Shenzhen’s regulator of state-owned assets, in an attempt to cobble 145 nationwide brokerages with 11.8 trillion yuan of combined assets into fewer, bigger firms to compete with global leaders.

Guosen has not been alone in heeding the call since the State Council issued its injunction in April to nurture world-class investment banks. Zheshang Securities in Hangzhou is awaiting regulatory approval to buy 34 per cent of Guodu Securities in Beijing, while Guolian Securities in Jiangsu’s provincial city of Wuxi announced a plan to pay 29 billion yuan to buy out Minsheng Securities in Beijing. Western Securities in Shaanxi province became the latest to heed the call, with a plan in June to take over Guorong Securities in Inner Mongolia.

An undated photograph of Guosen Securities’ building in Shenzhen. Photo: Handout

Guosen’s shares closed unchanged at 9.04 yuan each on Wednesday before trading was halted on the Shenzhen exchange, raising this year’s gain to almost 6 per cent. Vanho is a non-listed brokerage.