Tomorrow resumes trading! CICC merges with Dongxing and Cinda plan implemented: the exchange price is set at 36.91 yuan/share

On December 17th, CICC officially disclosed the restructuring plan for the share swap absorption merger with Dongxing Securities Co., Ltd. and Cinda Securities. The stocks of the three companies will resume trading on December 18th. This is the most significant merger event in the brokerage sector recently, involving A+H share listed companies simultaneously absorbing two A-share listed companies.

According to the plan, the share swap price for CICC's A-shares is set at 36.91 yuan/share, and each share held by A-share shareholders of Dongxing Securities and Cinda Securities can be exchanged for 0.5188 shares of CICC's A-shares. Dongxing Securities and Cinda Securities also announced on the same day that they had reviewed and approved the restructuring plan, with their stocks resuming trading on December 18th. The three companies have been suspended from trading since November 20th, and this resumption is close to the 25 trading day suspension limit set by the Shanghai Stock Exchange.

Before the announcement, the news had already begun to circulate in the market. In the afternoon of the 17th, brokerage stocks surged across the board, with Huatai Securities rising over 9% at one point, GF Securities rising over 5%, and CITIC Securities in Hong Kong rising over 4%. The securities ETF surged over 3% at one point, with a net inflow of over 2.9 billion yuan in nearly 60 trading days. Multiple broad-based ETFs saw increased trading volume, with the CSI 300 ETF trading over 900 million yuan in half an hour.

According to Securities China, based on static data estimates for the first three quarters of 2025, the merged CICC is expected to have an operating income of approximately 27.4 billion yuan, while its capital scale will significantly increase, making it the fourth brokerage in the industry with total assets exceeding one trillion yuan, and its net asset ranking will also rise to fourth place. The audit work related to this transaction has not yet been completed, and CICC will hold a board meeting in due course to make supplementary resolutions on related matters and submit them for shareholder meeting review. The transaction still requires the corresponding approvals, permits, or registrations before it can be implemented.

Restructuring Plan Officially Disclosed

CICC held a board meeting on December 17th to review and approve the plan for the share swap absorption merger with Dongxing Securities and Cinda Securities. According to the announcement, the share swap price for CICC's A-shares is set at 36.91 yuan/share, and A-share shareholders of Dongxing Securities and Cinda Securities can exchange their shares for CICC's A-shares at a ratio of 1:0.5188.

The three companies have been suspended from trading since the market opened on November 20th due to the restructuring matters. At the company's request, CICC's A-shares will resume trading on December 18th.

CICC stated in the announcement that the audit and other related work for this transaction have not yet been completed, and the board of directors has decided not to convene a shareholder meeting to review the related matters at this time. After the relevant work is completed, the company will hold a second board meeting in due course to make supplementary resolutions on related matters and will timely issue a notice for convening a shareholder meeting. The transaction plan still requires the corresponding approvals, permits, registrations, or consents before it can be officially implemented According to a previous article from Wall Street News, on November 19, the Huijin system brokerage landscape is brewing a major restructuring. CICC has stated that this restructuring will help accelerate the construction of a first-class investment bank, support financial market reform, and promote high-quality development in the securities industry. By organically combining the capabilities and resources of all parties involved in the restructuring and complementing each other's advantages, the goal is to achieve economies of scale and synergies after the merger, improve the quality and efficiency of the company's services to national strategies and the real economy, and enhance shareholder returns.

Industry insiders believe that this integration has business complementarity. CICC's investment banking capabilities and international advantages can synergize with Dongxing Securities and Cinda Securities in areas such as regional resources and non-performing asset disposal. Cinda Securities has accumulated experience in non-performing asset disposal, while Dongxing Securities has laid out in regional markets; these specialized businesses are expected to be strengthened after the integration.

CICC's stock price is currently reported at 34.89 yuan/share.

Dongxing Securities' stock price is currently reported at 13.13 yuan/share. Cinda Securities is currently reported at 17.79 yuan/share.

Multiple Factors Support Sector Upswing

According to Securities China, analysts believe that the resumption of trading for these three companies may provide significant support to the brokerage sector. In addition, recent management has also made it clear that it aims to moderately expand the capital space and leverage limits for brokerages, shifting from price competition to value competition. Coupled with the overall low valuation of the brokerage sector and the relatively low allocation of institutional funds, it is not difficult for the sector to rise.

China Galaxy Securities believes that from a sector comparison perspective, the securities sector outperformed 24 primary industries last week, showing overall good performance. The national policy goals of "stabilizing growth and stabilizing the stock market" and "boosting the capital market" will continue to set the direction for the sector's future, with multiple factors such as a moderately loose liquidity environment, continuous optimization of the capital market environment, and the rebuilding of investor confidence jointly driving the prosperity of the securities sector. In the current environment, medium- and long-term funds are accelerating into the market, maintaining high market activity, and the capital market is showing a "healthy bull" trend. Wealth management transformation, international business expansion, and financial technology empowerment are expected to become driving forces for the industry to enhance ROE. The current sector valuation is at a historical low, providing a defensive rebound that balances offense and defense.

Additionally, there has been a lot of recent information regarding brokerages going overseas, which may help boost the valuation of brokerage stocks. Guohai Securities believes that Chinese-funded brokerages have now entered a deepening layout stage for going overseas. Through more than 30 years of experience, Chinese-funded brokerages have completed the transition from an exploratory phase to a rapid development phase and then to a deepening layout phase, from initially setting up subsidiaries in Hong Kong to test the waters, to mergers and acquisitions worldwide to expand their footprint, and then to deepening their presence locally