Bulletin: Haitong's Losses Unlikely To Derail Guotai Junan Merger - S&P Global Ratings’ Credit Research

Bulletin: Haitong's Losses Unlikely To Derail Guotai Junan Merger

Bulletin: Haitong's Losses Unlikely To Derail Guotai Junan Merger - S&P Global Ratings’ Credit Research
Bulletin: Haitong's Losses Unlikely To Derail Guotai Junan Merger
Published Nov 04, 2024
2 pages (1092 words) — Published Nov 04, 2024
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Abstract:

HONG KONG (S&P Global Ratings) Nov. 4, 2024--Haitong Securities Co. Ltd.'s latest losses will not likely deter a proposed merger with Guotai Junan Securities Co. Ltd. (GTJA). A successful merger could benefit Haitong, despite pressure on its earnings since 2022. This is due to GTJA's stronger credit profile. Haitong's legacy portfolio in Hong Kong was likely the main reason for its losses, in our view. Profits at the parent level are recovering. We believe an accelerated cleanup of this portfolio will set a good foundation for the merged entity. We estimate the Shanghai-based securities firm (BBB/Developing/A-2) booked a consolidated loss of about Chinese renminbi (RMB) 1.4 billion in the third quarter of 2024, following its results release on Oct. 30,

  
Brief Excerpt:

...November 4, 2024 HONG KONG (S&P Global Ratings) Nov. 4, 2024--Haitong Securities Co. Ltd.'s latest losses will not likely deter a proposed merger with Guotai Junan Securities Co. Ltd. (GTJA). A successful merger could benefit Haitong, despite pressure on its earnings since 2022. This is due to GTJA's stronger credit profile. Haitong's legacy portfolio in Hong Kong was likely the main reason for its losses, in our view. Profits at the parent level are recovering. We believe an accelerated cleanup of this portfolio will set a good foundation for the merged entity. We estimate the Shanghai-based securities firm (###/Developing/A-2) booked a consolidated loss of about Chinese renminbi (RMB) 1.4 billion in the third quarter of 2024, following its results release on Oct. 30, 2024. This contrasts with our estimate of consolidated net income of about RMB4.6 billion for GTJA (###+/Stable/A-2) during the quarter. The proposed merger is a strategic move the Shanghai government is taking to create...

  
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's Losses Unlikely To Derail Guotai Junan Merger" Nov 04, 2024. Alacra Store. May 05, 2025. <http://www.alacrastore.com/s-and-p-credit-research/Bulletin-Haitong-s-Losses-Unlikely-To-Derail-Guotai-Junan-Merger-3278721>
  
APA:
S&P Global Ratings’ Credit Research. (). Bulletin: Haitong's Losses Unlikely To Derail Guotai Junan Merger Nov 04, 2024. New York, NY: Alacra Store. Retrieved May 05, 2025 from <http://www.alacrastore.com/s-and-p-credit-research/Bulletin-Haitong-s-Losses-Unlikely-To-Derail-Guotai-Junan-Merger-3278721>
  
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