Dongwu Securities Swallows Donghai Securities, Total Assets to Exceed 270 Billion

What are the key challenges faced by AI mergers and acquisitions integration?

Ebay Expert

“Dongwu Securities holds 83.77% of Donghai Securities, with a combined pre-issuance price of 9.46 yuan/share. Will it be renamed ‘SuChao Securities’?”

Recently, Dongwu Securities’ major asset restructuring plan to acquire Donghai Securities was officially announced, drawing significant market attention. This merger is not only one of the largest industry consolidations in recent years but also sparked widespread speculation about the potential name change to “SuChao Securities” behind the transaction.

Confirmation of Integration and Pre-Plan Finalization

Currently, the merger between Dongwu Securities and Donghai Securities has entered a concrete stage.

On March 13, Dongwu Securities announced that its 4th Board of Directors’ 35th (extraordinary) meeting approved the proposal for “Dongwu Securities Co., Ltd. issuing shares and paying cash to purchase assets and related transactions” and its summary. Earlier, on March 1, Dongwu Securities announced its plan to acquire a 26.68% stake in Donghai Securities held by Changtou Group through share issuance.

The announcement on March 13 shows that Dongwu Securities and several shareholders, including Changzhou Investment Group Co., Ltd., signed a “Framework Agreement for Share Issuance and Cash Purchase of Assets.” Dongwu Securities plans to acquire a total of 1,554,487,189 shares from multiple shareholders through a combination of share issuance and cash payment. After this transfer, Dongwu Securities’ stake in Donghai Securities will increase from 26.68% to 83.77%.

The pre-issuance price for the merger is set at 9.46 yuan/share. However, the final transaction price will be confirmed after asset audits, evaluations, and formal signing of agreements. There are two options for the transaction method: one is Dongwu Securities paying 92% of the transaction price via share issuance and 8% in cash; the other is Dongwu Securities paying the entire transaction price through share issuance.

The announcement also details personnel arrangements. Dongwu Securities currently has no plans to adjust Donghai Securities’ staff. If adjustments are needed within 12 months after the acquisition based on actual circumstances, Dongwu Securities will follow relevant laws and regulations to perform the necessary procedures and obligations.

This integration adopts a two-way adjustment strategy, further optimizing the equity structure. Donghai Securities’ actual controller is Changzhou Investment Group (with 90% owned by Changzhou Municipal Government and 10% by Jiangsu Provincial Finance Department). After the transaction, Changzhou Investment Group is expected to become a significant shareholder of Dongwu Securities, strengthening strategic synergy.

Strategic Positioning and Implementation Significance

In the current environment of intensified competition in the securities industry, regulators encourage market-oriented mergers and acquisitions to develop high-quality leading institutions. The acquisition of Donghai Securities by Dongwu Securities is a strategic move to improve quality and efficiency, representing an important attempt for mid-sized brokerages to break through. If the integration proceeds smoothly, the new entity is expected to rank among industry leaders and secure a more advantageous position in future industry patterns.

Post-merger, the combined business will likely benefit from complementary strengths across regions and lines of business. Dongwu Securities specializes in wealth management and investment banking, while Donghai Securities has accumulated strengths in asset management and fixed income. The merger is expected to create a more comprehensive and balanced business structure, enhancing overall service capabilities and resilience to cyclical risks.

The merger will also expand the service network and increase scale effects. Dongwu Securities’ main markets are in Suzhou and the Yangtze River Delta core area, while Donghai Securities has branches within Jiangsu and some outside provinces. Post-integration, the new entity’s coverage will be broader, especially strengthening channels and customer bases within Jiangsu Province, opening up opportunities for wealth management and other services to penetrate deeper.

Resource integration is expected to substantially boost capital strength. According to the Q3 2025 report, Dongwu Securities’ total assets are 216.959 billion yuan, and Donghai Securities’ total assets are 57.098 billion yuan. Post-integration, total assets could surpass 270 billion yuan, which will help improve credit ratings, risk resilience, and lay a solid foundation for future expansion into capital intermediary services, investment transactions, and innovative businesses.

The combined resources are also expected to drive further performance growth. Dongwu Securities’ forecast for 2025 shows a net profit attributable to shareholders of 3.431–3.668 billion yuan, up 45–55% year-on-year, with a net asset per share of 8.51 yuan and earnings per share of 0.59 yuan. Donghai Securities’ mid-year report indicates revenue of 815 million yuan (up 38.07%) and a significant 231.01% increase in net profit attributable to shareholders. The integration of both is expected to push performance to new heights.

Cost synergy effects are also anticipated to improve significantly. There is room for integration in IT systems, back-office operations, and branch networks. By optimizing overlapping functions, unifying technology platforms, and consolidating branch layouts, long-term management and operational costs could be reduced, greatly enhancing overall efficiency.

Wind data shows that in January-February 2026, Dongwu Securities ranked 6th in bond underwriting with 23.633 billion yuan, just behind CITIC Securities, Guotai Huarong, China Securities, CICC, and Huatai Securities. Post-integration of Donghai Securities’ related business and client resources could generate better “investment banking + investment” and “underwriting + sales” synergies.

Challenges and Focus Areas in M&A

While the positive implications of this merger are clear, three potential challenges should not be overlooked:

① Integration execution risks. The success of the merger depends heavily on post-merger corporate culture integration, management team collaboration, and business system unification. Historical experience shows that the integration process for brokerages is complex, and whether “1+1>2” effects can be achieved remains uncertain.

② Regulatory approval and market conditions. The transaction still requires internal decision-making procedures and approval from the China Securities Regulatory Commission. Additionally, market environment and stock price fluctuations could impact the final outcome.

③ Valuation and pricing arrangements. Details such as the specific transaction price, payment methods (shares/cash), and issuance price in the plan could directly affect shareholder interests. Is the pre-issuance price of 9.46 yuan/share reflective of a premium or discount? Will the combination of cash and shares impact Dongwu Securities’ capital and liabilities? These are challenges that must be addressed during integration.

Two additional points warrant market attention:

① Can Dongwu Securities stand out among Jiangsu’s other brokerages? Currently, Jiangsu has five brokerages: Huatai Securities, Dongwu Securities, Guolian Minsheng Securities, Nanjing Securities, and Donghai Securities. After acquiring Donghai, can Dongwu become a regional leader in Jiangsu? This is a key focus.

② Renaming to “SuChao Securities”? The new entity’s name after the merger has attracted attention. Due to the popularity of “SuChao,” some netizens have proposed renaming the new company as “SuChao Securities,” sparking lively discussions. However, this is just a market interest topic; the final name must comply with regulatory rules and reflect the company’s strategic positioning. Previously, another Jiangsu merger involved Guolian Securities absorbing Minsheng Securities, and the new name was “Guolian Minsheng Securities.”

Overall, the acquisition of Donghai Securities by Dongwu Securities embodies the industry trend of “strong alliances” and “complementary advantages.” The integration is expected to bring scale growth, regional deepening, and business synergy, reflecting the increasing concentration in the securities industry and the strategic efforts of mid-sized brokerages to innovate and overcome growth bottlenecks.

If successfully completed, this merger could create a new securities powerhouse with total assets exceeding 2.7 trillion yuan. In Jiangsu, a key economic hub, a “national leader Huatai, regional leader New Dongwu” pattern may emerge. Market watchers will closely follow the developments, especially whether “SuChao Securities” will move from online buzz to reality, and whether this integrated brokerage can truly realize the “1+1>2” synergy.

Despite promising prospects, the transaction’s success still requires time, and the effectiveness of integration remains to be seen. The market will continue to monitor subsequent progress, specific terms, and integration strategies.

Source: Institutional Research