Recently, Chinese officials** announced a major news that three asset management companies, China Oriental, Cinda and Great Wall, will be integrated into CIC.
The news had a wide impact on China's financial markets.
Prior to this, China Huarong, one of the four major asset management companies, has been incorporated into CITIC Group and recently changed its name to CITIC Financial Assets.
If this news is confirmed, it will mark the retirement of the four major asset management companies established 25 years ago to solve the non-performing assets of the four major state-owned commercial banks. Therefore, some Chinese mainland** exclaimed "the end of an era".
However, it is worth noting that on January 29, this report from Xinhua Finance was no longer accessible. Although the headline of the article can still be found through the Google search engine, clicking on the link will prompt you with a "page does not exist or has been deleted" prompt.
Xinhua Finance Network is a direct agency of China's official Xinhua News Agency, which is responsible for the construction and operation of a national financial information platform.
It is rare for the relevant reports to be deleted immediately after this breaking financial news.
At the Fortune Innovation Forum 2024 on Fortune's Chinese website, experts from financial academia and industry shared their views on the topic of "China's three major asset management companies (AMCs) will be merged into China Investment Corporation (CIC)".
Wang Yanxing, a senior researcher at the Chongyang Institute for Financial Studies at Renmin University of Chinese, pointed out that Huarong and Cinda, which have been listed on the Hong Kong Stock Exchange, have performed poorly. He further mentioned that the share price of CITIC Financial Assets*** is only 035 Hong Kong dollars, China Cinda's share price is only 077 Hong Kong dollars, while China Huarong appeared as high as 1029 in 20200.3 billion yuan loss. He said this level of share prices, whether it represents a value bottom for an investment or a precursor to a possible delisting, creates uncertainty for investors.
In addition, Wang Yanxing also expressed concern about the other two AMC companies that have not yet been listed on the Hong Kong Stock Exchange.
Against this backdrop, the shift in de facto control of the Big Four AMCs could reveal potential problems for new holders, such as CIC or CITIC Group, as they conduct a rigorous scrutiny of their loans, investments, and regulatory records.
Another industry insider, MS Black, also expressed his views in the comment area. She believes that as an AMC of an asset management company, the main type of assets under management is non-performing assets.
After Huarong's problems were highlighted, the risks of the AMC industry have been presented to the public and regulators.
She also mentioned that the earnings warnings issued by two of the big four AMCs in the past few years show the industry's woes.
As a result, she speculated that the merger of the three AMCs into CIC could be a measure taken by regulators to guard against potential risks in the AMC industry.