Zhang Hui, a “veteran” of Zheshang Securities, takes up the post of general manager of Guodu Securities, and the “Zheshang + Guodu” business has been integrated into the focus of the market

Photo source: Visual China

Blue Whale News, February 13 (Reporter Hu Jie)Guodu Securities (870488.NQ) welcomes a new general manager. Recently, Guodu Securities issued an announcement to appoint Zhang Hui, a former veteran of Zheshang Securities, as the company’s general manager.

This personnel move was also regarded by the industry as an important arrangement after Zheshang Securities entered Guodu Securities. It made structural adjustments to the core management team and paved the way for the subsequent in-depth integration of the two institutions.

In December last year, the transfer of 34.25% of the shares of Guodu Securities transferred by Zheshang Securities (601878.SH) was completed, officially becoming the largest shareholder of Guodu Securities. However, it is not easy to move from equity consolidation to deep integration of the business side. It requires going through many processes such as organizational structure adjustment, personnel replacement, and resource allocation. Whether the adjustment period can be successfully passed and operating performance can be improved through further integration of business is also a big test for the management of both parties.

Zhang Hui takes up the post of General Manager of Guodu Securities

One month after leaving Zheshang Securities due to job adjustments, Zhang Hui’s new direction was finally clear.

On February 12, Guodu Securities issued an announcement stating that the board of directors decided to appoint Zhang Hui as the general manager of the company based on the nomination of the board of directors by the Remuneration and Nomination Committee. Since the day Zhang Hui assumed the position of general manager of the company, Li Rui, deputy general manager of the company, no longer performed the position of general manager on his behalf.

As a veteran of the securities industry, Zhang Hui has been deeply involved in the financial industry for more than 30 years.

His public resume shows that Zhang Hui was born in July 1969 and was assigned to the Zhejiang Province Branch of China Construction Bank after graduating from college in 1991. From May 1997 to October 2002, Zhang Hui worked in Zhejiang Province Trust and Investment Co., Ltd.(CCB Zhejiang Trust Reformed), and served as the head of the First Securities Business Department and the head of the Securities Management Department. From October 2002 to August 2005, he served as the head of the Investment Banking Department of Zhejiang Management Headquarters of Hongyuan Securities Co., Ltd. Later, he had working experience in Supor Group and Zhejiang Dajia Holding Group respectively, and also accumulated certain experience in industrial enterprise management.

From August 2007 to January 2025, Zhang Hui took root in Zheshang Securities for nearly 18 years. He has served as general manager of fixed income headquarters, general manager of bond investment banking headquarters, director of bond investment banking headquarters, secretary of the board of directors, vice president, chief risk officer, etc. Until recently joined Guodu Securities.

Guodu Securities said that the appointment of senior executives is in line with its operation and development needs. Zhang Hui’s work experience and management capabilities will have a positive role in promoting the company’s operation and development. Zhang Hui has been engaged in financial management for a long time, has accumulated rich experience in financial and securities management, is familiar with financial and legal knowledge related to the operation and management of securities companies, and has the necessary operation and management capabilities and organizational and coordination capabilities to perform his duties.

Another noteworthy thing is that before Zhang Hui took office, Yang Jiangquan, former general manager of Guodu Securities, resigned in October 2024 after being investigated by the China Securities Regulatory Commission on suspicion of illegal stock holding by employees.

In January this year, due to the imperfect system construction and internal management mechanism for managing employees ‘investment behavior, the internal monitoring and inspection mechanism for employees’ investment behavior was not in place, and the Beijing Securities Regulatory Bureau also issued a warning letter to Guodu Securities.

After Zhejiang Merchants entered the capital, business integration became the focus

Zhang Hui, who has served in the management of Zheshang Securities for a long time, has now been appointed as the general manager of Guodu Securities, or paving the way for the in-depth integration of the two institutions at the subsequent business level. It is reported that while serving as secretary of the board of directors of Zheshang Securities, Zhang Hui also led the preliminary negotiation and coordination of the acquisition project of Guodu Securities.

In recent years, the M & A integration between multiple securities firms has attracted much attention from the market. As an example, Zheshang Securities + Guodu Securities, the advancement speed has exceeded market expectations.

In December last year, Zheshang Securities transferred 34.25% of the shares of Guodu Securities, which meant that Zheshang Securities officially became the largest shareholder of Guodu Securities. It is worth mentioning that it only took about five months from the time the regulatory authorities formally accepted the application of Guodu Securities to change its major shareholder and actual controller in July last year to the completion of the share transfer registration.

Some industry insiders pointed out that in the future, if Zheshang Securities cooperates with the reorganization of the board of directors, it is likely to further become the controlling shareholder of Guodu Securities. Zhejiang Province Transportation Group Co., Ltd., the actual controller of Zheshang Securities, may become the actual controller of Guodu Securities, which is expected to end the long-term state of Guodu Securities without an actual controller.

What the market is more concerned about is, in the long run, whether the two can complement each other’s advantages through further market-oriented integration and achieve a 1+1 2 effect?

From the perspective of business layout, the geographical coverage of the two securities firms is different. Among them, Zheshang Securities, as a listed securities firm in Zhejiang, is mainly deeply involved in Zhejiang and other Yangtze River Delta regions, while Guodu Securities mainly covers northern markets such as Beijing, Tianjin and Hebei. With this acquisition, the two institutions may be able to break geographical restrictions and expand various businesses.

In terms of resource endowment, Guodu Securities has great advantages in public fund business. The company holds 20% of the equity of China-Europe Fund, the leading public offering institution, which is highly attractive. Wind data shows that as of the end of last year, the management scale of China-Europe funds was 528.83 billion yuan, ranking 23rd in management scale; in the same period, the management scale of Zheshang Fund under Zheshang Securities was only 43.013 billion yuan, ranking 89th in management scale, a big gap. After the merger of the two, Zheshang Securities can indirectly obtain equity in China-Europe Funds and take the opportunity to make up for the shortcomings of the public offering business.

However, it is not easy to move from equity consolidation to deep integration of the business side. It is inevitable that we will experience the process of organizational structure adjustment, personnel replacement, and resource allocation. Whether we can successfully pass the adjustment period and improve operating performance through further integration of business may be a challenge for both parties. A big test of management wisdom.

In terms of the latest results, according to unaudited financial reports, Guodu Securities achieved revenue of 1.759 billion yuan in 2024, a year-on-year increase of 37.13%, and net profit of 963 million yuan, a year-on-year increase of 51.5%. Zheshang Securities’s operating income in the first three quarters of 2024 was 11.896 billion yuan, a year-on-year decrease of 5.75%, and its net profit was 1.265 billion yuan, a year-on-year decrease of 4.92%. (Blue Whale News Hu Jiehujie@lanjinger.com)