The buyer for a 14.52% stake in Yunnan Hongta Bank has been confirmed.
Kunming Industry Development and Investment Co., Ltd., a state-owned enterprise under the Kunming municipal government, has announced that it has successfully sold its entire 14.52% holding in Hongta Bank through a listing with the Kunming United Assets and Equity Exchange. CITIC Bank has been confirmed as the final buyer in the transaction, with a purchase price of 981 million yuan.
Based on Hongta Bank's latest disclosed net asset value per share, this transaction price is less than half of the net asset value of the stake. The market is now closely watching the potential business synergies as CITIC Bank replaces Kunming Industry Development and Investment as the fourth-largest shareholder of the "tobacco-linked" Hongta Bank.
CITIC Bank Secures Position as Fourth-Largest Shareholder
Records indicate that Kunming Industry Development and Investment had been preparing to divest its Hongta Bank shares since 2025. The company's annual report shows it provisioned for asset impairment of 884 million yuan related to this investment that year. To facilitate the sale, the company also moved to release the related equity pledge in a timely manner.
Hongta Bank's 2024 annual report showed that 30% of the shares held by Kunming Industry Development and Investment were pledged as of the reporting date. This pledge status was still reflected in the bank's 2025 annual report. However, it was confirmed in early April that the equity pledge had been lifted.
In April 2026, the 14.52% stake was first listed for sale with a minimum price of approximately 1.021 billion yuan, but the initial attempt ended without a successful bid. The equity was relisted on May 19 and a transaction was completed on May 26 for approximately 981 million yuan, a reduction of 40 million yuan from the initial listing price.
According to the latest announcement, the Kunming United Assets and Equity Exchange issued a "Transaction Qualification Confirmation Notice" on May 26, 2026, confirming CITIC Bank as the final buyer for the 14.52% equity transfer. The relevant agreements have now been signed, and the parties are proceeding with the equity transfer procedures.
Upon completion of the transfer, CITIC Bank will become the fourth-largest shareholder of Hongta Bank. This marks a notable event as it is the first time in years that a major state-owned or joint-stock bank has become a principal shareholder in a regional city commercial bank, following China Communications Bank's strategic investment in Hainan Bank in 2015.
CITIC Bank operates 30 branches in Yunnan Province, covering cities including Kunming, Qujing, Dali, and Yuxi. As a major shareholder, it is expected to appoint one director to the board, replacing the seat previously held by Kunming Industry Development and Investment, thereby participating in the formulation of Hongta Bank's financial and operational policies.
Hongta Bank is a well-recognized "tobacco-linked" bank in the market. Calculations based on its shareholding structure show that entities related to the tobacco industry collectively hold over 48% of its shares. Major shareholders include China National Tobacco Corporation Yunnan Branch and Yunnan Hehe (Group) Co., Ltd.
According to its 2025 annual report, the largest shareholder is Yunnan Hehe (Group) Co., Ltd., holding a 19.99% stake, which serves as the diversified management platform for China Tobacco Yunnan. The second-largest shareholder is China National Tobacco Corporation Yunnan Branch with an 18% stake. The fifth-largest shareholder is China Shuangwei Investment Co., Ltd., holding 10.34% and being a wholly-owned subsidiary of China Tobacco responsible for major strategic investment projects.
As of the end of last year, Hongta Bank had total assets of 151.4 billion yuan, with 1,282 employees and 41 branches across nine prefectures and cities in Yunnan Province.
It is also noteworthy that Hongta Bank's core senior management team largely hails from major state-owned banks, a rarity among local city commercial banks. Chairman Hu Wenjian previously served as Vice President of the Agricultural Bank of China's Shanxi Branch, and President Zhang Zhenmin has a background with the Industrial and Commercial Bank of China's Gansu Branch.
Kunming Industry Development and Investment Raises Nearly 1 Billion Yuan
For Kunming Industry Development and Investment, divesting this stake to raise nearly 1 billion yuan represents a pragmatic move by local state-owned assets to optimize its asset structure and revitalize existing resources amid operational pressures. This transaction holds significant practical importance for both alleviating the company's current operational difficulties and facilitating long-term business adjustments.
In recent years, the company has faced substantial increases in operational pressure. Between 2021 and 2025, its revenue declined from 12.373 billion yuan to 4.506 billion yuan, a drop of over 63%, while net profit fell from 342 million yuan to 90 million yuan, a decrease exceeding 73%.
Data also indicates that Kunming Industry Development and Investment faces pressure from concentrated bond maturities. The company currently has 18 outstanding bonds, including 16 domestic bonds with a total outstanding principal of 10.265 billion yuan, of which 4.461 billion yuan is due within this year. It has also been subject to notices for tax arrears, with the latest published at the end of January showing unpaid value-added tax of 31.3699 million yuan. Furthermore, in December of last year, the company was listed as a person subject to enforcement for a claim of 40.4213 million yuan.
Overall, this asset disposal is not a passive "dumping of burdens" but an active optimization of the asset structure. It represents a reasonable choice made by Kunming Industry Development and Investment during a period of operational pressure, balancing short-term risk mitigation with long-term development potential.
CITIC Bank, as the counterparty in this transaction, has been operating in Yunnan's financial sector for twenty-five years. Since establishing its first branch in Kunming in 2001, CITIC Bank Kunming Branch has provided over one trillion yuan in comprehensive financing for the local economy. From 2024 to 2025, its capital market bond underwriting scale in Yunnan exceeded 100 billion yuan, leading the regional market share.
As an AA+ rated bond issuer among Yunnan's municipal state-owned enterprises, Kunming Industry Development and Investment has previously cooperated with CITIC Bank. The bank acted as a lead underwriter for two of its medium-term notes issued in 2020 and 2021, with a total issuance scale of 1.5 billion yuan, and also served as the ongoing management institution for these bonds, which have since matured.
Comments