"Ten years of marriage" stirs up new waves, Xiangcai Shares' merger with Great Wisdom suddenly halted

Question to AI: What twists and turns lie behind the ten-year marriage?

Reporter Liu Xiafei, 21st Century Business Herald

On March 15, Xiangcai Co. and Dazhihui both issued announcements, stating that Xiangcai Co. plans to absorb and merge Dazhihui through a share swap and raise matching funds. However, since the valuation data in the application documents has expired as of March 14, the Shanghai Stock Exchange has suspended the review of this transaction according to regulations.

In response, both companies indicated that this suspension of review would not have a significant adverse impact on the transaction, that their business operations are normal, and that they are actively working on updating the valuation data, financial data, and application documents, and will submit the materials and apply for the resumption of review as soon as the updates are completed.

However, even though both companies stated that “the impact is minimal,” it still sparked considerable discussion in the market about the “suspension of reorganization.”

In fact, facing the suspension of transaction reviews due to “data validity period” issues is not uncommon in the A-share market, especially in the first quarter of each year (January to March), a period when old and new financial data overlap. According to incomplete statistics from 21st Century Business Herald reporters, since 2026, at least 15 companies, including Shitou Co., Yingli Co., Huamao Technology, Bohai Automobile, and ST United, have announced the suspension of review of merger transactions due to expired financial data, evaluation reports, and other related issues.

From past cases, companies typically can resume reviews after 1-2 months of data updates and supplementary work, and some companies that act more quickly have applied for review resumption within just a few trading days.

From Dazhihui’s planning to acquire Xiangcai Securities in 2015, which was halted, to Xiangcai Co.'s proposed share swap to absorb and merge Dazhihui in 2025, this “marriage” that spans ten years has attracted significant market attention.

Looking forward to the merger, against the backdrop of a wave of mergers and integrations in the brokerage industry, industry insiders generally hold a relatively optimistic market outlook, hoping that this restructuring can establish a new model of “traffic + license” for internet brokerages.

Data Expiry Triggers Review Suspension

According to the announcement, Xiangcai Co. and Dazhihui received a notice from the Shanghai Stock Exchange on March 14, stating that the valuation data in the application documents submitted for this transaction has expired and needs to be updated and resubmitted. In accordance with the relevant provisions of the “Shanghai Stock Exchange Major Asset Restructuring Review Rules,” the Shanghai Stock Exchange has suspended the review of the company’s transaction.

Further explanations in both parties’ announcements indicate that the validity period of the valuation report expires on March 14, 2026, which has now exceeded the maximum validity period of 12 months.

In addition, the restructuring report for this transaction cited audited financial data from the most recent financial statements as of June 30, 2025, which, according to the six-month validity period regulation, will also expire on March 31, 2026.

Regarding the impact of this review suspension on the companies, both parties stated that this suspension would not have a significant adverse impact on the transaction, and that their business operations are normal.

In terms of subsequent arrangements, both parties indicated that they are actively working with relevant intermediary institutions to update valuation data, financial data, and application documents, and once the related work is completed, the companies will promptly submit the updated application materials to the Shanghai Stock Exchange and apply for a timely resumption of the review.

First Quarter Common Data Expiry “Review Suspension Tide”

Although both companies stated that “the impact is minimal,” it still sparked considerable discussion in the market about the “suspension of reorganization.”

So, is it common to face suspension of merger reviews due to “data validity period” issues?

In fact, similar situations are not uncommon in the A-share market, especially in the first quarter of each year (January to March). According to incomplete statistics from 21st Century Business Herald reporters, since 2026, at least 15 companies including Shitou Co., Yingli Co., Huamao Technology, Bohai Automobile, and ST United have announced the suspension of review of merger transactions due to expired financial data, evaluation reports, and other related issues.

For example, Bohai Automobile’s plan to acquire the equity of four companies held by Haina Chuan faced review suspensions on January 31 and February 28 of this year due to expired audited financial data and evaluation materials, respectively.

Industry insiders point out that, according to the relevant regulations for major asset restructuring of listed companies, the most recent audited financial data is valid for six months after the financial report’s cutoff date; if the transaction involves issuing shares, the extension may be appropriately lengthened under special circumstances, but the extension period cannot exceed three months. If not updated after the expiration, the exchange will suspend the review as per regulations.

On one hand, from the perspective of listed companies, the financial data submitted is often based on the previous year’s mid-term or year-end, and after a 6-9 month review cycle, it is common for related data to expire in the early next year.

On the other hand, from the perspective of auditing institutions, the first quarter is also a peak period for annual report audits of listed companies, making the auditing work intensive and potentially causing delays in relevant data updates.

Therefore, in the first quarter, the situation of “old data expiring, new data still under audit” is quite common, and many merger and restructuring transactions face temporary review suspensions as a result.

Since such situations are not uncommon, how long does it typically take for the review of such transactions to resume and continue?

From past cases, companies usually can resume reviews after 1-2 months of data updates and supplementary work, and some companies that act more quickly have applied for review resumption within just a few trading days.

For example, the transaction in which Wuhan Holdings intends to acquire 100% equity of Wuhan Municipal Institute received a notice from the exchange on December 31, 2025, due to expired financial data and consequently suspended the review. After extending the audit and updating and supplementing application documents, the company received a notice from the exchange agreeing to resume review on February 28, 2026, taking about two months in total.

In a faster case, Chuangyuan Xinke’s plan to acquire 100% equity of Shanghai Weiyu Tiandao Technology received a notice from the Beijing Stock Exchange on January 30, 2025, also due to expired financial data and suspended review. However, just ten days later, the company submitted an application for review resumption to the Beijing Stock Exchange on February 9 and received a notice of review resumption on February 11.

“Ten-Year Marriage” Turmoil

Industry Focus on Post-Merger “Traffic + License” New Model

Returning to the transaction of Xiangcai Co. absorbing and merging Dazhihui, the discussions in the market are also related to the lengthy timeline of this transaction.

In fact, this is not the first attempt at “marriage” between Xiangcai Co. and Dazhihui. As early as 2015, Dazhihui’s plan to acquire Xiangcai Securities for 8.5 billion yuan received formal acceptance from the Shanghai Stock Exchange but was quickly suspended due to Dazhihui being investigated for suspected information disclosure violations.

Ten years later, the roles of the two companies have reversed, with Xiangcai Co. (renamed after Ha Gaoke acquired Xiangcai Securities) now absorbing and merging Dazhihui, making this “reunion” itself highly noteworthy in the market.

Regarding this transaction, counting from the initial disclosure of the merger proposal by both parties on March 28, 2025, to the suspension of review due to document expiration on March 14, 2026, the entire process has already taken nearly a year. For a significant restructuring that attracts much attention, nearly a year is indeed not a short time, and the patience and focus of the market are being tested.

Additionally, it is worth noting that in recent months, Dazhihui and Xiangcai Securities have also been embroiled in several lawsuits.

In November 2025, a natural person shareholder filed a lawsuit against Dazhihui, citing procedural compliance issues with the restructuring; although he quickly withdrew the lawsuit, not causing substantive impacts on the restructuring process, it did trigger intensive discussions in the market about the compliance of this transaction.

Meanwhile, Xiangcai Securities is facing related cases involving the 30 billion “Chengxing System,” which saw new developments in February this year. The announcement disclosed by Xiangcai Co. indicated that Yunnan Trust sued Chengxin Company for compensation of approximately 343 million yuan due to a civil trust dispute and demanded that Xiangcai Securities bear joint liability. The case is currently in the retrial of the first instance and has not yet been settled.

It is easy to understand that, in the absence of “clearing” negative events for the company, even routine issues such as review suspensions can lead investors to worry about “long nights with many dreams.”

However, against the backdrop of a wave of mergers and integrations in the brokerage industry, industry insiders generally remain relatively optimistic about this “marriage” that spans ten years.

Industry insiders analyze that the “renewed ties” after ten years itself demonstrates the long-term recognition of mutual business complementarity between the two parties. Having experienced previous twists and turns, the integration plans and risk assessments for both parties during this restart may be more cautious and pragmatic, which also adds weight to the stability of the transaction to a certain extent.

From the current operating fundamentals of both parties, the “safety cushion” for this restructuring integration is also more solid.

The performance forecast for 2025 shows that Xiangcai Co.'s core entity, Xiangcai Securities, is expected to achieve total operating revenue of approximately 1.955 billion yuan in 2025, a year-on-year increase of 28.8%; the expected net profit is around 553 million yuan, a year-on-year increase of as much as 157.5%.

Meanwhile, Dazhihui is expected to report a net profit attributable to the parent company of -34 million to -50 million yuan in 2025, with a non-recurring net profit of -69 million to -85 million yuan. Although it has not achieved profitability, the loss margin has significantly narrowed compared to 2024.

Regarding the prospects after the merger, Xia Mian, Chief Financial Analyst at Pacific Securities, pointed out that the full license of Xiangcai Securities combined with Dazhihui’s user traffic of over ten million monthly active users is expected to build a new model of “traffic + license” for internet brokerages.