Auction Market Faces Persistent Chill; Non-Listed Bank Equity Needs Revaluation

Securities Times Reporter Xie Zhongxiang

Recently, multiple large bank equity auctions have been repeatedly sold at discounts, yet no buyers have shown interest.

The Securities Times reporter observed on the Alibaba Judicial Auction Platform that several banks, including Guangdong Huaxing Bank, have once again listed multiple equity stakes worth over one billion yuan. However, after several failed auctions, these assets have entered a secondary sale process.

In the face of the sluggish market for non-listed bank equity auctions, some trustees are attempting to attract buyers with low starting prices as a promotional tactic. For example, on the Alibaba Judicial Auction Platform, a stake of 100,000 shares in Beijing Rural Commercial Bank was listed with a starting bid of only 188 yuan, despite the bank’s latest net asset value being as high as 837,000 yuan.

Multiple Equity Auctions Fail to Sell

Recently, Jiangxi Baosheng Industrial Co., Ltd. (referred to as “Jiangxi Baosheng”) publicly listed 23.652 million shares of Jiujang Bank’s domestic stock. After several failed auctions, the assets have now entered a secondary sale process, with an estimated sale price of about 193 million yuan, roughly 8.18 yuan per share. This is about four times the bank’s latest closing price of 1.81 Hong Kong dollars per H-share.

In October last year, Jiangxi Baosheng’s holdings of these shares were publicly listed again, with an initial auction starting at 241.8 million yuan, but no bids were received. The second round lowered the starting price to 193 million yuan, yet no buyers emerged, and the auction failed again. As early as July to August 2021, several of Jiangxi Baosheng’s stakes in Jiujang Bank (with a combined reserve price exceeding 100 million yuan) were forcibly auctioned by the court but did not succeed. These were subsequently withdrawn after the second auction attempt.

Besides Jiujang Bank, other assets that have undergone multiple auctions include several stakes in Guangdong Huaxing Bank held by Shanghai Shenglong Investment Group. In February this year, a batch of 90 million shares was auctioned but ended without bids, only to be listed again recently.

In fact, among judicial auctions of small and medium-sized bank equities, failed sales are quite common. For example, in January 2025, the approximately 416 million shares of Shanxi Bank held by Zhongrong Xinda Group Co., Ltd. were listed with a reserve price of 417 million yuan but failed to sell. In February, 30.6 million shares of Langfang Bank held by Tianjin Runsheng Plastic Products Co., Ltd. were auctioned at a discounted price of 74.63 million yuan but also failed to transact in the second round.

“188 Yuan for 100,000 Shares”

Similarly, due to low overall market transaction volume, some trustees are trying to attract buyers with “low-price traffic” strategies.

The Securities Times reporter saw on the Alibaba Asset Auction Platform that several stakes in Beijing Rural Commercial Bank are either ongoing or upcoming. One lot of 100,000 shares has a starting bid of only 188 yuan. The deposit for this auction is 20,000 yuan, with a minimum increment of 2,000 yuan. An official involved explained that setting the starting price at 188 yuan is meant to attract participants, and the final transaction price will definitely be higher.

As of March 8, this auction had 21 registered bidders, nearly 750 set reminders, and attracted over 4,700 views. On March 5, another auction of 100,000 shares in Beijing Rural Commercial Bank with a starting price of 1,888 yuan was completed after 70 bids, closing at 388,800 yuan.

The auction notice states that as of the end of September 2025, Beijing Rural Commercial Bank’s net asset value per share was 8.37 yuan. Compared to 2024, the value of the bank’s equity has increased, with a year-end net asset per share of 7.49 yuan. According to the bank’s dividend payout data for 2024, it paid a cash dividend of 0.14 yuan per share (tax included). For 100,000 shares, that amounts to 14,000 yuan in pre-tax income just from dividends last year.

Liquidity for Non-Listed Bank Equity Deteriorates

Looking at small and medium-sized banks with frequent equity auctions, it’s clear that non-listed banks face poor liquidity in the auction market, making transactions difficult.

For example, according to incomplete statistics from the Securities Times, by the end of 2025, there had been 2,700 bank equity auction events on the Alibaba judicial auction platform, with only 650 resulting in successful sales. The remaining 2,050 auctions ended without bids.

This means that over 75% of bank equity listings on the platform in 2025 failed to sell, a significant increase compared to previous years. Geographically, the success rate varies—regions with more developed economies like the Pearl River Delta and Yangtze River Delta see relatively better results than central, western, northern, and northeastern regions.

According to data from the State Financial Regulatory Administration, by the end of 2025, China’s commercial banks’ net interest margin further narrowed to 1.42%, down 10 basis points from the end of Q4 2024. Non-performing loan ratios remained steady at 1.50%. Among different types of institutions, city commercial banks saw a relatively higher increase in non-performing loans, rising by 0.06 percentage points.

Sun Binbin’s team at Caitong Securities pointed out that small and medium-sized banks primarily face risks related to internal control compliance and illegal operations, and there may also be risks involving shareholders and actual controllers within their equity structures. Additionally, during economic recovery, the transition of new and old growth drivers increases operational risks. Meanwhile, in a low-interest-rate environment, narrowing interest margins reduce profitability, affecting capital adequacy and solvency.

“In the short term, the market for small and medium-sized bank equity auctions will continue to be sluggish, likely characterized by ‘deepening discounts and shrinking transactions,’” said Bai Wenxi, Vice Chairman of the China Enterprise Capital Alliance. He believes that the industry’s “winter” in equity auctions is a result of risks accumulated during the past extensive growth model. The key to breaking this deadlock is not waiting for market recovery but implementing substantive risk clearing, governance restructuring, and mechanism innovation to restore investment value in small and medium-sized bank equities.