Executive Maximum Annual Salary of 1.52 Million, 800 Million Yuan Injection into Chang'an Bank, Stock Price Sluggish and "Trading Below Book Value"! The Two Sides of First-Tier Trust Annual Reports……

Yiqiu Jun

“How to respond when the stock price falls below net asset value? What’s the latest on the 3.8 billion yuan private placement? Why invest in Chang’an Bank? On the afternoon of March 10, Shaanxi Guotou Chairman Yao Weidong led senior executives to face investors directly, delivering another report beyond the annual report.”

On the afternoon of March 10 at 3:00 PM, during the online live broadcast of the “Shaanxi Guotou A 2025 Annual Performance Briefing,” investors’ questions kept flooding the chat.

“With the company’s stock price consistently below net assets, how does management view this?”

“Are there any target investors for the 3.8 billion yuan private placement?”

“Why participate in the capital increase of Chang’an Bank?”

Faced with a series of pointed questions, Chairman Yao Weidong, President Jie Zhijiong, and other senior executives responded one by one. This two-hour-long exchange not only provided additional interpretation of the annual report data but also served as a crucial effort for this sole listed trust company on the A-share market to convey confidence to the market.

Just a month ago, Shaanxi Guotou released its 2025 annual report. Data shows that the company achieved an operating income of 2.952 billion yuan for the year, up 0.85% year-on-year; net profit attributable to shareholders was 1.433 billion yuan, up 5.25%. Against the backdrop of the overall gradual recovery of the trust industry, these results are commendable. However, issues such as negative operating cash flow, long-term stock price below net asset value, and high regional concentration also cannot be ignored by investors.

Addressing the questions on falling below net asset value, private placement advancement, and Chang’an Bank’s layout

At the performance briefing, regarding investors’ repeated questions about the company’s stock price being below net assets (closing price of 3.54 yuan on March 10, with a per-share net asset of 3.7 yuan), Yao Weidong admitted: “The trading price in the secondary market is influenced by multiple factors such as macroeconomic conditions, market trends, industry policies, and the company’s fundamentals.”

He stated that the company attaches great importance to market value management and will take three measures: first, continuously provide stable returns to shareholders and maintain the continuity of dividend policies; second, strengthen market communication through performance briefings, roadshows, and other channels to timely convey operational information; third, actively explore new measures in accordance with the CSRC’s market value management guidelines to promote the mutual enhancement of market value and intrinsic value.

Notably, by 2025, the company has already paid a total dividend of 0.90 yuan per 10 shares, totaling 460 million yuan, accounting for 32.13% of net profit attributable to shareholders. Yao Weidong revealed that in mid-2026, the company plans to distribute dividends based on undistributed profits and current-year performance.

Regarding the 3.8 billion yuan private placement, Peng Yuan, Senior Vice President of CITIC Securities and sponsor representative, stated that the intended subscribers have not yet been determined. However, after the plan was announced, various types of investors have contacted the company and expressed investment intentions. He added that the private placement still requires approval from the Shenzhen Stock Exchange and registration with the CSRC. The company is actively preparing for all procedures and will disclose progress in a timely manner in accordance with regulatory requirements.

In addition, in January this year, Shaanxi Guotou announced its plan to participate in the capital increase and expansion of Chang’an Bank, with an investment amount not exceeding 800 million yuan. Yao Weidong explained that this capital increase strictly follows the company’s “14th Five-Year” development plan, which emphasizes strengthening and expanding financial equity investments. The goal is to optimize the company’s long-term capital allocation structure, improve the efficiency of using its own funds, and enhance influence and voice in the invested financial enterprises.

It is understood that as of early January, the company held 426 million shares of Chang’an Bank, and after the capital increase, this will rise to 635 million shares.

The reason why Chang’an Bank has attracted investor attention may be due to its own multiple risks.

It is reported that Chang’an Bank is currently facing a severe test of systemic risk. Its core contradiction lies in its capital adequacy ratio approaching the red line, with the core Tier 1 capital adequacy ratio dropping to 8.23%, just above the regulatory threshold by 0.73 percentage points. Asset quality remains under pressure, with a non-performing loan ratio of 1.83%, higher than the industry average, and frequent large loan delinquencies. The loan loss reserve coverage ratio has sharply declined to 168.36%. There are also frequent compliance risks, including a 4 million yuan fine by the central bank in July 2025, with recent penalties involving related-party transactions, rigid repayment, and bill violations. Meanwhile, shareholder risk transmission has intensified, with the seventh-largest shareholder, Dongling Group, undergoing bankruptcy reorganization, and related loans exceeding 1.7 billion yuan raising questions about “nominee loans.” Lastly, the bank’s performance heavily relies on investment income, which doubled to 4.255 billion yuan in the first three quarters, but fee income losses widened, and the listing process has been delayed for four years.

Behind the Data: Slight Revenue Growth, Solid Profitability

In 2025, Shaanxi Guotou achieved revenue of 2.952 billion yuan and net profit of 1.433 billion yuan, representing year-on-year increases of 0.85% and 5.25%, respectively. Non-recurring profit increased by 14.79%.

Data Source: Shaanxi Guotou 2025 Annual Report

Looking at the revenue structure, net fee and commission income was 1.398 billion yuan, slightly down year-on-year; investment income reached 920 million yuan, becoming a key profit support; net interest income was 450 million yuan. The overall revenue structure is diversified, and the stable performance of investment income indicates the company’s strengthening of its core investment capabilities.

In terms of profitability, the company’s net profit margin is as high as 48.52%, meaning nearly 50 yuan of profit is generated per 100 yuan of revenue, reflecting strong profit conversion ability. The growth rate of non-recurring net profit (14.79%) significantly exceeds that of net profit, further confirming the solid growth of the main business.

Regarding specific trust business, Shaanxi Guotou’s active management proportion continues to increase. By the end of 2025, the company’s trust asset management scale reached 624.585 billion yuan, up 8.01% from the previous year. The company managed 1,739 trust projects, with total trust assets of 699.004 billion yuan, a year-on-year increase of 16.51%.

More importantly, the management structure has been optimized. The scale of actively managed trusts reached 516.7 billion yuan, accounting for 82.7%, up 17.33% year-on-year; passively managed trusts totaled 107.885 billion yuan, accounting for 17.3%. The high proportion and significant growth of active management reflect the company’s proactive transformation and improved active management capabilities.

From asset allocation, the annual report clearly reveals Shaanxi Guotou’s transformation path. On one hand, the company continues to reduce trust scale in the real estate sector, which fell to 5.927 billion yuan in 2025, down 3.3% year-on-year, with its proportion in total scale further decreasing to 0.85%. On the other hand, it increases support for the real economy, with trust scale supporting real industries rising to 6.836 billion yuan, up 10.31%, focusing on technology innovation and advanced manufacturing.

In terms of core business, Shaanxi Guotou is expanding its proprietary assets and increasing loan issuance. By the end of 2025, its total proprietary assets reached 294.51 billion yuan, up 15.71%. Among these, loans and advances amounted to 124.26 billion yuan, accounting for 42.2%, up 25.17%; financial investments totaled 109.37 billion yuan, accounting for 37.1%. The increased loan issuance and high proportion of financial assets indicate a tendency toward active investment, with investment income becoming an important profit support.

Executive Compensation: Business Director Leads with 1.52 Million Yuan, President Ranks Sixth with 1.16 Million Yuan

With the release of the annual report, the compensation data of Shaanxi Guotou’s executive team was also disclosed. The report shows that in 2025, the total remuneration of the company’s directors and senior management was 14.4014 million yuan. Excluding independent directors, the chairman of the supervisory board, and supervisors, the average salary was approximately 1.1394 million yuan.

Among the disclosed executives, Business Director Zhang Zhonghe led with an annual salary of 1.5245 million yuan, followed by Market Director Sun Xiyan with 1.3922 million yuan, and Chairman Yao Weidong with 1.186 million yuan.

As the company’s “number two,” the salary of President Jie Zhijiong has attracted attention. The annual report shows that the 50-year-old Jie Zhijiong received a pre-tax total compensation of 1.1644 million yuan in 2025. This salary level ranks sixth among the company’s executive directors and senior management.

Overall, in 2025, the total compensation of the company’s directors and senior executives decreased by 13.38% compared to 18 million yuan in 2024, aligning with the company’s cost reduction and efficiency improvement strategy.

Asset Quality and Capital Status: Sufficient Safety Margin, Cash Flow Under Pressure

In terms of asset quality, Shaanxi Guotou shows continuous improvement. As of the end of 2025, the non-performing asset ratio was approximately 1.23%, down from 1.41% in 2024; the provision coverage ratio was about 215.6%, up 17.3 percentage points from 198.3% in 2024; credit impairment losses were 185 million yuan, down 16.3% from 221 million yuan in 2024. These data indicate ongoing asset quality improvement and strengthened risk buffers.

Regarding capital adequacy, as of the end of 2025, the company’s net assets attributable to shareholders were 18.944 billion yuan, with a debt-to-asset ratio of 35.68%, up 5.96 percentage points from 2024. This suggests increased expansion willingness but remains within industry safety levels. Regulatory indicators show that the company’s net capital is about 12.58 billion yuan, with a ratio of approximately 160.0% of risk-weighted assets, and about 67.4% of net assets, both well above regulatory thresholds, providing ample room for business expansion. Notably, in the context of accelerated industry transformation, Shaanxi Guotou has initiated a private placement plan not exceeding 3.8 billion yuan, which will significantly enhance capital strength after implementation.

However, cash flow is the most concerning part of this annual report. In 2025, the company’s net cash flow from operating activities was negative 877 million yuan, a sharp decline from positive 1.85 billion yuan in 2024, a decrease of 147.55%. Net cash flow from investing activities was negative 2.58 billion yuan, and net cash flow from financing activities was positive 2.991 billion yuan. Overall, cash and cash equivalents decreased by 469 million yuan.

The company explained that the shift from positive to negative operating cash flow was mainly due to business expansion and increased loan issuance, with net increases in customer loans and advances totaling 2.133 billion yuan, significantly consuming operating cash flow. The net outflow from investing activities was mainly due to increased payments for financial investments. Although cash inflows from financing activities increased substantially, they were still insufficient to cover overall cash outflows, leading to increased liquidity pressure.

In summary, Shaanxi Guotou’s 2025 annual report highlights several core features: strengths include steady performance growth, expanding trust scale, increasing active management proportion, improving asset quality, solid capital adequacy, and stable dividend policy. Challenges include negative operating cash flow, liquidity pressures from business expansion, high regional concentration (over 80% revenue from Northwest), limited contribution from new businesses, and credit expansion risks.

In the context of overall slowdown and increasing differentiation in the trust industry, Shaanxi Guotou has demonstrated resilience through this annual report. However, balancing business expansion with cash flow management, continuously strengthening asset quality control, and optimizing capital structure and liquidity management will be key focus areas for future operations.

As Yao Weidong stated during the performance briefing, the company will actively explore new market value management measures to promote the mutual enhancement of market value and intrinsic value. As the only directly listed trust company on the A-share market, Shaanxi Guotou’s every step attracts market attention.