Recently, the Shanghai Regulatory Bureau of the China Banking and Insurance Regulatory Commission issued a reply regarding the qualification of Wei Zhongqian as the chairman of Yongcheng Property Insurance Co., Ltd. (hereinafter referred to as "Yongcheng Insurance"), approving Wei Zhongqian's qualification to serve as the chairman of Yongcheng Insurance.
Looking at the background of the newly appointed chairman, Wei Zhongqian has held several key financial positions in Huaneng Group and its subsidiaries, but he lacks experience in the insurance industry. His appointment as the new chairman of Yongcheng Insurance is due to the appointment by the major shareholder, Huaneng Group. In addition, in March of this year, the vacant position of president at Yongcheng Insurance, which had been vacant for 8 years, was finally filled with a new successor, who was promoted from the vice president, Sun Zengchan.
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The chairman's appointment is settled
Public information shows that the newly appointed chairman, Wei Zhongqian, is a financially experienced veteran born in the 1970s. He has served as an assistant accountant in the finance department of Huaneng International Power Co., Ltd., a budget specialist in the comprehensive office of the finance department, deputy director of the finance department of Huai'an Huaneng Power Plant (in charge of work), supervisor of the finance department and deputy director of the comprehensive office of the finance department of Huaneng International Power Co., Ltd., deputy manager (in charge of work), manager, and deputy chief accountant of the finance department of Huaneng New Energy Co., Ltd., chief accountant and party committee member of Huaneng Group (Hong Kong) Limited, and deputy director of the overseas business department of Huaneng Group Co., Ltd. Moreover, the Huaneng International Power Co., Ltd., where he used to work, has a deep connection with Yongcheng Insurance. It is understood from the Qichacha platform that Yongcheng Insurance's largest shareholder, Huaneng Capital Services Co., Ltd., and Huaneng International Power Co., Ltd. are both subsidiaries of Huaneng Group.
The new president, Sun Zengchan, as an old hand of Yongcheng Insurance, has a profound background in insurance and has held important positions at Ping An Property Insurance and Yongcheng Insurance. In November last year, Sun Zengchan was also approved to become the chairman of Yongcheng Assets.
It is reported that Yongcheng Insurance was established in 2004, with its headquarters in Shanghai. It is a national joint-stock property insurance company jointly initiated and established by large power enterprise groups and industrial investment groups with strong strength such as China Huaneng. The service scope covers various industries and fields such as electric power energy, petrochemical, ship shipping, infrastructure, aerospace, machinery equipment, electronics and communications, financial trade, and scientific and technological innovation. Relying on the resource advantages of the major shareholder, Yongcheng Insurance has mainly been focusing on the electric power energy insurance field in recent years. To date, its registered capital has reached 2.178 billion yuan.
Yongcheng Insurance's "sale"
This year, in addition to significant personnel changes, Yongcheng Insurance has also made significant moves in the capital market. According to the disclosure of the Shanghai United Property Exchange, Yongcheng Insurance has listed for transfer all the shares it holds in Harbin Rural Commercial Bank Co., Ltd. (hereinafter referred to as "Harbin Rural Commercial Bank"), totaling 198 million shares, accounting for 9.9% of the total shares of the company, with a listing base price of about 346 million yuan.
Public information shows that Harbin Rural Commercial Bank was established in October 2015, with a registered capital of 2 billion yuan. As of the end of June 2024, the operating income of Harbin Rural Commercial Bank was 520 million yuan, and the net profit was 97.9973 million yuan, which decreased by 48.3% and 39.2% respectively compared to the same period last year, showing a downward trend in profitability.
The investment return brought to Yongcheng Insurance by Harbin Rural Commercial Bank also shows a downward trend. From the annual reports published by Yongcheng Insurance over the years, the investment income from 2020 to 2023 was 42.3832 million yuan, 33.5752 million yuan, 1.7306 million yuan, and 15.7786 million yuan, respectively.It can be seen that Yongcheng Insurance's decision to divest its equity in Harbin Rural Commercial Bank may be the best solution at present. Taking advantage of the current profitability of small and medium-sized banks, which still have a certain investment value, it is advisable to quickly list the equity on the market to sell at a good price, while bringing a good investment return to the company.
However, according to public information disclosure, Heilongjiang Far East Wood Industry Co., Ltd., the eighth largest shareholder of Harbin Rural Commercial Bank, listed its 40 million shares for sale seven times from 2019 to 2022, and all ended in failure. This shows that selling this equity is not an easy task.
Yongcheng Insurance's "being sold"
In addition to Yongcheng Insurance listing the transfer of its equity in Harbin Rural Commercial Bank, several "power sector" shareholders of the company have also frequently listed the transfer of their equity in recent years to profitably exit. This series of capital operations cannot be separated from expectations for the future.
In April of this year, China Huadian Group Capital Holdings Co., Ltd. (referred to as "Huadian Capital") listed the transfer of its 7.6% stake in Yongcheng Insurance on the Beijing Property Exchange. It is understood that this is already the second time Huadian Capital has attempted to transfer the equity of Yongcheng Insurance.
As early as December 2022, Huadian Capital listed the transfer of 7.6% equity in Yongcheng Insurance on the Beijing Property Exchange, with a transfer price of 256 million yuan at that time.
In addition to Huadian Capital's two listings for sale, China Southern Power Grid also listed the transfer of 3.28% equity in Yongcheng Insurance twice in 2023 and 2024, with a transfer price of 102 million yuan for both times.
Furthermore, in September 2023, State Power Investment Group Capital Holdings Co., Ltd. also listed the transfer of equity in Yongcheng Insurance, totaling 143 million shares, accounting for 6.57% of the total share capital, with a transfer price of 219 million yuan. Even earlier, at the end of 2021, Datang Capital, a subsidiary of China Datang Group Co., Ltd., listed the sale of 165.528 million shares of Yongcheng Insurance on the Shanghai United Property Exchange, accounting for 7.6% of the total share capital, with a transfer price of 281 million yuan.
In 2015, with the strong background of its shareholders, Yongcheng Insurance became the first insurance company in China to log on to the New Third Board, which was a time of unlimited glory. After entering the capital market, the company's business income and asset performance have steadily improved. The 2023 annual report shows that the company achieved a business income of about 6.352 billion yuan during the period, a 5.2% increase compared to last year, and a net profit of about 97 million yuan, a year-on-year increase of 4.13%.As of the end of June 2024, Yongcheng Insurance recorded a total operating revenue of 2.938 billion yuan, a decrease of 2.87% compared to the previous year; the premium income achieved was 4.18 billion yuan, a year-on-year decline of 4.68%; the net profit was 19 million yuan, a significant drop of 79.71% compared to the same period last year. According to the disclosure in its semi-annual report, the decline in premium income is mainly attributed to the reduction in property insurance and accident and health insurance premiums. Among them, Yongcheng Insurance's guarantee insurance business income was 121 million yuan, a substantial decrease of 82.96% compared to 710 million yuan in the same period last year.
Furthermore, the semi-annual report for 2024 shows that the company's asset-liability ratio has risen to 81.81%, an increase of 3.03% from the beginning of the year, and the rise in the asset-liability ratio has led to a corresponding increase in debt repayment pressure. During the period, the company's core solvency adequacy ratio was 186.87%, and the comprehensive solvency adequacy ratio was 216.35%, slightly lower than the level of similar property insurance companies.
This year marks the "big day" of Yongcheng Insurance's 20th anniversary. Over these 20 years, the company has navigated through several economic cycles, continuously delving into the field of power and energy insurance, and continuously expanding its asset scale. At the same time, the company has ushered in a new leadership team this year, and whether the new management can continue to lead the company towards the next 20 years is of great interest to the market.