A decade ago, Shanghai Dzh Limited ambitiously attempted to acquire Xiangcai Securities. Now, the roles have reversed, with Xiangcai Securities' parent company, Xiangcai Co.,Ltd., planning to absorb and merge Shanghai Dzh Limited through a share swap. The goal is to create an internet securities firm with a "license + data" model, aiming to replicate the success of East Money Information Co.,Ltd..
At a critical stage of this process, on March 15, Xiangcai Co.,Ltd. announced that the Shanghai Stock Exchange had suspended the review of the merger application. The suspension was due to the expiration of the valuation report and the approaching invalidity of relevant financial data in the application documents. The companies stated they would apply to resume the review once the data and application files are updated.
This potential merger is viewed by market participants as a high-stakes bet on creating the next East Money Information Co.,Ltd.. For Xiangcai Co.,Ltd., failure to leverage Shanghai Dzh Limited's user traffic and data resources to break through industry homogenization could lead to further marginalization amid intense competition.
Xiangcai Co.,Ltd., whose subsidiary Xiangcai Securities is a nationwide comprehensive securities firm, went public on the A-share market in 2020. Its performance has been volatile since then. From 2021 to 2024, its revenue declined annually from 4.571 billion yuan to 2.192 billion yuan, while net profit attributable to shareholders dropped from 486 million yuan to 109 million yuan. Although revenue and profit saw double-digit growth in the first three quarters of 2025, the sustainability of this recovery requires observation. Among 51 securities companies in its A-share industry classification, Xiangcai Co.,Ltd. ranks beyond 40th place in terms of revenue, net profit, and total assets for the first three quarters of 2025, indicating a mid-to-lower tier position in the industry.
For Shanghai Dzh Limited, this merger is a potential lifeline. The company has struggled to recover since being investigated for alleged information disclosure violations in 2015. From 2015 to 2018, its non-GAAP net profit was consistently negative, including a massive loss of 1.607 billion yuan in 2016. From 2022 to 2024, and in the first three quarters of 2025, its non-GAAP net profit remained in the red, indicating weak profitability from its core operations. Its market value has also significantly declined from its peak.
If the merger is successful, the combination of Xiangcai Securities' full suite of securities licenses and Shanghai Dzh Limited's tens of millions of monthly active users would create a "traffic + license" internet securities model. This mirrors the successful path of East Money Information Co.,Ltd., which acquired Tibet Tongxin Securities in 2015. From 2015 to 2024, East Money Information Co.,Ltd.'s securities brokerage revenue grew rapidly from 688 million yuan to 5.952 billion yuan, with its market share increasing from 0.26% to 5.17% in 2024. Analysts suggest that an "internet traffic boost + low-cost expansion strategy" could similarly drive rapid growth in Xiangcai Co.,Ltd.'s brokerage revenue and market share.
Furthermore, subject to the merger's success, Xiangcai Co.,Ltd. plans to raise 8 billion yuan in supporting funds. These funds would be directed towards projects including a financial large language model and securities digitalization, big data engineering and service network construction, and an integrated wealth management project, accelerating the transition to an internet securities firm.
Following the market rebound since late 2024, the securities industry is entering a new window of growth. For both Xiangcai Co.,Ltd. and Shanghai Dzh Limited, this merger represents their closest opportunity in a decade to realize an East Money Information Co.,Ltd.-style dream. A decade ago, Shanghai Dzh Limited's "Chinese Bloomberg" vision faltered due to missteps. Now, instead of pursuing that old dream, it is joining forces with Xiangcai Co.,Ltd. to ignite a new one centered on the internet securities model. The key questions remain: Can Shanghai Dzh Limited finally overcome its historical shortcomings? Can Xiangcai Co.,Ltd. leverage this opportunity to achieve a significant leap in scale and performance? The market will be watching closely.
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