Orient Securities Company Limited (SSE: 600958) saw its shares rise 2.48% to close at 9.08 yuan per share on July 27, though the stock is still down nearly 15% year-to-date. That evening, the company formally disclosed the draft report for its proposed 251.2 billion yuan acquisition of Shanghai Securities.
If the deal goes through smoothly, Orient Securities' total assets are expected to surpass 600 billion yuan, propelling it into the top 10 of the industry. Industry insiders note that both Orient Securities and Shanghai Securities are part of the Shanghai state-owned assets system, offering strong business complementarity. This "same-root" integration promises lower coordination costs, less cultural friction, and significant consolidation advantages.
From a merger perspective, the transaction primarily uses share issuance (235.5 billion yuan in stock consideration plus 15.7 billion yuan in cash). This approach avoids a massive cash outflow that could impact the balance sheet while allowing the counterparties to share in the post-merger growth benefits.
Strategic Merger Worth 251.2 Billion Yuan
The draft report shows that the final transaction price for 100% of Shanghai Securities is 251.2 billion yuan, corresponding to a valuation of approximately 1.25 times its price-to-book (PB) ratio. The payment structure combines "share issuance plus cash payment." Specifically, Orient Securities will purchase a 50% stake in Shanghai Securities from Bailian Group, 16.3333% from Shanghai International Investment, 7.6767% from Shanghai International Group, and 1% from Shanghai Chengtou through the issuance of A-shares. It will also buy 18.74% of Shanghai Securities from Guotai Haitong via share issuance and an additional 6.25% from Guotai Haitong with cash. The ex-dividend issuance price is set at 10.29 yuan per share.
Upon completion, the five original shareholders of Shanghai Securities will hold approximately 2.289 billion shares of Orient Securities (excluding Guotai Haitong's minor existing market holdings), accounting for 21.22% of the total post-issuance share capital. To protect investor interests and prevent dilution of near-term returns, Orient Securities has implemented measures to fill the gap. Meanwhile, Bailian Group and Shanghai International Group will become key new strategic shareholders. Bailian Group brings rich consumer customer and industrial resources, while Shanghai International Group holds financial holding and sci-tech industry fund clusters, capable of continuously empowering the company's business from both industrial and financial innovation perspectives.
Analysts from Fengde Group's Black Kirin Capital commented that Orient Securities and Shanghai Securities, both under the Shanghai state-owned system, have inherent integration advantages. Orient Securities' strengths in asset management can efficiently complement Shanghai Securities' offline branches and client resources. The shared state-owned background significantly reduces integration coordination costs and cultural friction. The analyst further pointed out that the transaction's primary reliance on share issuance, supplemented by cash, avoids a large cash outlay that could impact the balance sheet while allowing counterparties to benefit from post-merger growth—a clever "time-for-space" design. Guotai Haitong's participation in divesting its stake also reflects how industry restructuring is moving from "single-point breakthroughs" to "chain reactions."
Comprehensive Expansion and Upgrades
After the merger, Orient Securities' branch network, customer base, and business system will undergo comprehensive expansion and upgrades, significantly enhancing its overall strength and efficiency. Data shows that as of March 31, 2026, Orient Securities had 7 securities branches and 163 securities business offices, fully controlling subsidiaries like Dongzheng Futures, Dongzheng Capital, and Dongzheng Asset Management, while also holding a major stake in China Universal Fund. Shanghai Securities, meanwhile, has 9 securities branches and 72 securities business offices, wholly owning Haizheng Futures and Qianhai United Fund. Post-transaction, the combined total of outlets will expand to about 250, with 77 securities business offices in Shanghai alone, ranking first in the industry.
The merger will also achieve a dual leap in customer scale and quality. After integration, Orient Securities' total wealth management fund accounts will rise from 3.29 million to over 5 million. The number of high-net-worth clients with assets exceeding 3 million yuan will increase by more than 50%, continuously optimizing the client structure. Leveraging the fintech advantages of both entities, the company's client reach efficiency and asset allocation service capabilities will be fully upgraded through coordinated online and offline platforms, strengthening its core competitiveness in wealth management.
On the business front, both institutions are headquartered in Shanghai, with complementary focuses. Orient Securities relies on its national branch network and mature business platform to build three core systems: wealth management, investment banking, and institutional services. Shanghai Securities has a deeply rooted brokerage network and solid local client base in Shanghai and the Yangtze River Delta region. Additionally, Shanghai Securities is one of the few domestic institutions qualified for fund evaluation business, having published over 60 fund ratings, giving it strong credibility among public and private fund circles. Analysts suggest that Orient Securities can leverage this scarce qualification to build a closed-loop "research + data + trading + capital" institutional service system, enhancing its existing research and institutional service chain and strengthening its comprehensive service capabilities for fund managers.
Orient Securities stated that after the transaction, it will integrate resources from both sides to form complementary advantages, expand asset scale and capital strength, and further enhance its comprehensive financial service capabilities and competitiveness in wealth management, investment banking, and institutional services. This will consolidate its competitive edge and industry position, while improving the efficiency and quality of serving the real economy.
Major Leap in Core Indicators
As capital market reforms deepen, the China Securities Regulatory Commission's "Merger and Acquisition Six Articles" and the new "National Nine Articles" both explicitly encourage securities firms to grow larger and stronger through M&A integration, driving the industry toward specialization and intensification. Meanwhile, the head effect in the securities industry continues to intensify, with large firms widening the competitive gap through advantages in capital, channels, and licenses. The independent development space for single-region brokerages is gradually shrinking, making M&A integration a key industry trend.
After this merger, Orient Securities' core operational indicators will see a leapfrog improvement. Based on financial data from the end of the first quarter of 2026, the company's total assets will exceed 600 billion yuan, entering the industry's top 10. On the profitability front, in 2025, Orient Securities achieved a net profit attributable to the parent of 5.63 billion yuan, while Shanghai Securities posted a net profit of 1.32 billion yuan. The combined net profit after the merger could simply total around 7 billion yuan. "This 251.2 billion yuan merger is not a simple balance sheet splicing, but a precise resource integration under a shared origin," an analyst noted. As industry commission rates continue to decline and the Matthew effect accelerates the squeeze on small and medium-sized institutions, scale has shifted from an option to a matter of survival. The combined 600 billion yuan in total assets, directly ranking among the top 10 in the industry, provides Orient Securities with a thicker safety cushion and wider financing space in the next round of capital consumption.
Other industry insiders analyze that this merger and reorganization, rooted in sound internal operations and driven by external resource integration, will continue to deliver multiple synergies. Orient Securities is expected to form a balanced and diversified business structure, strengthen its ability to weather industry cycles, carve out a differentiated development path, and open up new space for scale expansion and business development in the long term, consistently delivering long-term enterprise value.
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