Haitong Chairman Steps Down as Mega Merger Approaches

Published: Jan. 14, 2025 1:09 a.m. GMT+8

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Signage at the Haitong Securities Tower in Shanghai, China, on Friday, Sept. 6, 2024. Photo: Bloomberg

The chairman of Haitong Securities Co. Ltd. has resigned from his position in the run-up to the company’s mega merger with Guotai Junan Securities Co. Ltd. that could create China’s biggest brokerage.

Shanghai-listed Haitong announced Monday that Zhou Jie, its chairman since 2016, has stepped down from all positions in the company. Li Jun, Haitong’s general manager will take over his duties on a temporary basis.

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Zhou Jie, chairman of Haitong Securities, resigned amid a merger with Guotai Junan that could form China's largest brokerage with 300.8 billion yuan ($41 billion) in net assets.
Zhou will become chairman of Shanghai International Group, the controlling shareholder of both firms, and is expected to join the new entity's board.
Haitong, previously successful, faces declining profits, seen as needing rescue, while the merger awaits regulatory approval.

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Haitong Securities Co. Ltd.: Haitong Securities Co. Ltd., once a successful Chinese securities firm, has faced declining profits, with a significant 84.6% drop in 2023 to 1 billion yuan. Amid mounting bad debts and asset impairments, it is set to merge with Guotai Junan Securities, creating China's largest brokerage. The merger is seen as a strategic move, possibly as a bailout for Haitong, and is awaiting regulatory approval.

Guotai Junan Securities Co. Ltd.: Guotai Junan Securities Co. Ltd., headquartered in Shanghai, is merging with Haitong Securities to form China's largest brokerage. It is backed by Shanghai's government and the controlling shareholder, Shanghai International Group, will also control the new merged entity. The merger appears to be part of a strategy to "rescue" the financially troubled Haitong, suggesting Guotai Junan's stronger position in the deal.

Morgan Stanley: The article mentions that the merger between Haitong and Guotai Junan will create a brokerage powerhouse with the potential to compete with global heavyweights like Morgan Stanley and Goldman Sachs Group Inc.

Goldman Sachs Group Inc.: The article mentions Goldman Sachs Group Inc. as a global heavyweight brokerage that the newly merged entity of Haitong and Guotai Junan could potentially compete with, following their merger to create China's largest securities firm.

Citic Securities Co. Ltd.: Citic Securities Co. Ltd. is currently China’s largest securities company but will be overtaken by the new merged entity of Haitong and Guotai Junan, which will have 300.8 billion yuan ($41 billion) in net assets. The newly merged brokerage is expected to surpass Citic Securities by that measure, as reported based on the firms’ third-quarter reports.

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