Bulletin: Haitong Securities To Take Profit Hit Up Front, Ahead Of Merger - S&P Global Ratings’ Credit Research

Bulletin: Haitong Securities To Take Profit Hit Up Front, Ahead Of Merger

Bulletin: Haitong Securities To Take Profit Hit Up Front, Ahead Of Merger - S&P Global Ratings’ Credit Research
Bulletin: Haitong Securities To Take Profit Hit Up Front, Ahead Of Merger
Published Jan 26, 2025
2 pages (1126 words) — Published Jan 26, 2025
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Abstract:

HONG KONG (S&P Global Ratings) Jan. 27, 2025--Haitong Securities Co. Ltd.'s coming profit hit is likely part of a strategy to clean up its balance sheet before the proposed merger with Guotai Junan Securities Co. Ltd. In our view, this exercise will lay a good foundation for the creditworthiness of the merged group. Haitong released a profit warning on Jan. 24, 2025, indicating the Shanghai-based securities firm made a loss of about Chinese renminbi (RMB) 2.7 billion in the fourth quarter of 2024. This comes after losses in the third quarter that we estimate at RMB1.6 billion. In our view, Haitong is likely writing off chunks of its legacy portfolio in Hong Kong, which has been dragged down by China's

  
Brief Excerpt:

...January 26, 2025 HONG KONG (S&P Global Ratings) Jan. 27, 2025--Haitong Securities Co. Ltd.'s coming profit hit is likely part of a strategy to clean up its balance sheet before the proposed merger with Guotai Junan Securities Co. Ltd. In our view, this exercise will lay a good foundation for the creditworthiness of the merged group. Haitong released a profit warning on Jan. 24, 2025, indicating the Shanghai-based securities firm made a loss of about Chinese renminbi (RMB) 2.7 billion in the fourth quarter of 2024. This comes after losses in the third quarter that we estimate at RMB1.6 billion. In our view, Haitong is likely writing off chunks of its legacy portfolio in Hong Kong, which has been dragged down by China's property market turmoil. By taking more pain up front, Haitong would enter into the proposed merger with less baggage. We rate Haitong (###/Developing/A-2) one notch lower than Guotai Junan (###+/Stable/A-2). The transaction could close over the next six months....

  
Report Type:

Bulletin

Issuer
Haitong Securities Co. Ltd.
GICS
Investment Banking & Brokerage (40203020)
Sector
Global Issuers
Country
China
Region
Emerging Markets
Format:
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Cite this Report

  
MLA:
S&P Global Ratings’ Credit Research. "Bulletin: Haitong Securities To Take Profit Hit Up Front, Ahead Of Merger" Jan 26, 2025. Alacra Store. May 05, 2025. <http://www.alacrastore.com/s-and-p-credit-research/Bulletin-Haitong-Securities-To-Take-Profit-Hit-Up-Front-Ahead-Of-Merger-3313741>
  
APA:
S&P Global Ratings’ Credit Research. (). Bulletin: Haitong Securities To Take Profit Hit Up Front, Ahead Of Merger Jan 26, 2025. New York, NY: Alacra Store. Retrieved May 05, 2025 from <http://www.alacrastore.com/s-and-p-credit-research/Bulletin-Haitong-Securities-To-Take-Profit-Hit-Up-Front-Ahead-Of-Merger-3313741>
  
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