The China -Korea Life Direction Battle Plan was approved: 5 state -owned shareholders entered the bureau, and the capital increase of 1.5 billion yuan to relieve the payment capacity pressure

Picture source: Oriental IC

Recently, Zhejiang Oriental (600120.SH) disclosed that China and South Korea Life Insurance Co., Ltd. (hereinafter referred to as "China -South Korea Life") citizens' capital increase projects have obtained supervision approval. Yuan, and introduced five new shareholders of state -owned capital.

From the perspective of performance, China and South Korea Life, which has been established for ten years, has a relatively sluggish operation, continued losses, and the solvency adequacy ratio is at a lower level. At the end of the first quarter of 2022, its core and comprehensive solvency adequacy ratio dropped to 86.31%and 121.67%, respectively. , Increased capital.

Increase the capital to the ground, or inject funds to China -Korea Life "living water" at a critical moment, stacking the change of equity and the change of the company's nature is the highlight of its future development. It is reported that China and South Korea Life also plans to develop and operate the accumulated insurance technology projects in the future, combine Zhejiang's digital economy leading advantages, set up insurance technology subsidiaries to enrich the industrial structure and create an innovation engine for the location.

Foreign shareholders do not participate in the dilution of capital increase shares, and China -Korea Life has transformed into a Chinese -funded insurance company

In April 2021, the Sino -Korean Life Insurance increase project was listed on the Zhejiang Property Exchange. In March of this year, its shareholder Zhejiang Oriental announced that after extensive solicitation, five investors have intended to complete the capital increase agreement for competitive negotiations, and now they have obtained regulatory approval and hammering is settled.

Specifically, the capital increase and share expansion plan increased from 1.5 billion yuan to 3.012 billion yuan. Among them, the original shareholder Zhejiang Oriental subscribed for 250.4 million yuan in registered capital; Zhejiang Changxing Financial Holding Group Co., Ltd. (hereinafter referred to as "Changxing Financial Holdings") subscribed for subscribing to 60,704,600 yuan in registered capital; Referred to as "Wenzhou Guojin") subscribed for 165.6624 million yuan in registered capital; Wenzhou Power Investment Co., Ltd. (hereinafter referred to as "Wenzhou Power") subscribed for subscribed by 164.76588 million yuan in registered capital; Wenzhou Transportation Development Group Co., Ltd. (hereinafter referred to as "Wenzhou Wenzhou Submitted ") Subscribe to the new registered capital of 164.76588 million yuan; Guotai Junan Saiyu Investment Co., Ltd. (hereinafter referred to as" Zhengyu Investment ") subscribed for the new registered capital of 148.5594 million yuan.

After increasing the registered capital and shareholders, China and South Korea's life equity structure is as follows: Zhejiang Oriental holds 33.33%, Hanhua Life Insurance Co., Ltd. holds 24.99%, Changxingjin holds 20.23%, Wenzhou Guojin holds 5.52%, Wenzhou Electric Power holds holdings 5.49%of the shares, 5.49%of the shares in Wenzhou, and 4.95%of Coveon's investment. Since the foreign shareholder Han Hua Life Insurance Co., Ltd. does not participate in capital increase, the shareholding ratio is diluted from 50%to 24.99%, according to the "Foreign Investment Law", China and South Korea Life will become a Chinese -funded life insurance company.

It is worth noting that the five strategic investors introduced by China and South Korea Life are all state -owned assets. For example, Changxing Financial Holdings is a wholly -owned holding subsidiary of Changxing County Finance Bureau (Changxing County People's Government State -owned Assets Supervision and Management Office); Wenzhou Guojin is established by the Wenzhou Municipal People's Government. Municipal state -owned wholly -owned limited limited liability companies with liability contribution; Wenzhou Electric Power is a member of Wenzhou Industrial and Energy Development Group controlled by Wenzhou State -owned Assets Supervision and Administration Commission; Wenzhou Dajin is a state -owned enterprise directly under the Wenzhou People's Government; Takashi Junan Securities's wholly -owned subsidiary.

Regarding the capital increase, Zhejiang Oriental stated in the announcement that China and South Korea Life is an important financial institution that helps to be rich and serving people's livelihood. Increased capital increase is one of the results of the cooperative enterprise linkage of state -owned asset -state and state -owned enterprise industries in Zhejiang oriental, cities, and counties. Deepen the digital reform in the insurance field, focus on serving the real economy and ensuring people's livelihood, innovative products and services, give full play to the role of insurance "stabilizers", and create a commonly rich demonstration sample for insurance services.

Some people in the insurance industry analyzed that the concentration of local state -owned shareholders can provide resource support to the localization of China and South Korea life. The addition of strategic investors can provide sufficient capital foundation and inject new resources, which is conducive to accelerating business and institutional development. It can also further improve the corporate governance structure.

The performance of China and South Korea for ten years is sluggish, and the payment capacity adequacy ratio is under pressure

It is reported that China and South Korea Life was established in November 2012 and has a registered capital of 1.5 billion yuan. It is the only national life insurance company headquartered and registered in Zhejiang. The two major initial shareholders are Zhejiang International Trade Group Co., Ltd. (hereinafter referred to as "Zhejiang International Trade") and Han Hua's life. The two parties have invested 250 million yuan.

At the end of 2016, Zhejiang Oriental acquired 50%of the equity of China -South Korea Life, and signed a 2021 gambling agreement with Zhejiang International Trade. Zhejiang International Trade promised that China and South Korea would deduct in 2021 unless the profit or loss was positive. The proportion of shares is supplemented in cash, until China and South Korea's life are profitable.

When East and South Korea Life, Zhejiang Oriental enrolled, increased capital by 500 million yuan in proportion with foreign shareholders. In 2019, Chinese and foreign shareholders continued to increase capital in proportion. To 1.5 billion yuan. Behind shareholders' continuous capital increase, on the one hand, we can see the company's expectations for shareholders, on the other hand, the company is constantly consuming capital. Public data shows that since its establishment of China and South Korea Life, it has continued to lose money. Although it achieved a net profit of 8.1636 million yuan in 2020, it reappeared into a loss in 2021, with a net loss of 117 million yuan. From the perspective of the solvency, at the end of the 4th quarter of 2021, the core and comprehensive solvency adequacy ratio of China and South Korea were 120.88%. At the end of the first quarter of 2022, its core and comprehensive solvency adequacy ratio dropped to 86.31%and 121.67%, respectively. It is closer to the regulatory red line and urgently need to increase capital.

The implementation of the capital increase project, or injects funds "living water" into China and South Korea Life at a critical moment, superimposed the change of equity and the change of the company's nature, and it is also an important point of its future development.

Guo Zhenhua, director of the Department of Insurance, Shanghai University of Foreign Economic and Trade, pointed out to Blue Whale Insurance that in general, joint venture life insurance companies have used foreign shareholders' advantages in business models and corporate governance, but the specific operations still need consensus between the two parties, or there is no occurrence. Large differences can change long -term strategies to change the downturn. The changes in the equity structure of China and South Korea Life and the foreign parties may help improve the efficiency of decision -making, increase the resource sharing and reciprocal development of Chinese shareholders. After the adjustment of capital increase, with the adjustment of the equity structure, the corporate governance structure may be further obtained by further corporate governance structure. Optimization and improvement.

It is worth noting that the chairman of China and South Korea Life Insurance Jin Chaoping revealed the company's next plan in an interview with the media in the near future, which is positioned as an important development engine of Zhejiang Oriental Financial Control Platform. On the one hand The value of insurance business has increased, promotes product service innovation, and helps the development of the health industry; on the other hand, it will give full play to the advantages of shareholders of all parties and cooperate with other financial sectors of Zhejiang Oriental Financial Control Platform to seek high -quality development. In the future, the company will also plan to develop and operate the accumulated insurance technology projects, combine Zhejiang's digital economy leading advantages, set up insurance technology subsidiaries to enrich the industrial structure and create an innovative engine for the location.

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