Challenges such as licensing and gambling intertwine; Huaxin Haitong merger awaits a breakthrough

Pan Yue Drawings

With the release of annual performance results, the market has once again focused on the merger progress of Huian Fund and Haitong Fund under the “one participant, one controller” regulatory requirements. At present, the market is concentrating on the issue of which party will take over Haitong Fund’s three scarce licenses: social security fund, basic pension insurance, and enterprise annuities. In recent years, multiple challenges—regulatory penalties, management changes, talent loss, and merger and reorganization—have been intertwined. How Huian Fund, which stands at a critical turning point, can achieve compliant rectification, consolidate its strengths in bond investment, make up for its shortcomings in stock investment, and successfully realize coordinated integration with Haitong Fund still remains to be observed by the market.

Uncertainty still surrounds the succession of licenses

Recently, Guotai Haitong, a leading securities firm that completed a comprehensive integration in 2025, has disclosed its annual report. The operating performance of its two controlling public fund subsidiaries has been released.

According to the annual report, in 2025, Huian Fund deeply focused on advanced technology themes such as semiconductors and artificial intelligence. It worked to build a characteristic product matrix, achieving a leap in both efficiency and competitiveness. The results of its diversification strategy have been significant; the competitiveness of sub-segments such as index ETFs, cross-border investments, and FOF has continued to strengthen. Among them, its gold ETF scale has remained ranked No. 1 in the industry. By the end of 2025, Huian Fund’s public fund assets under management were approximately 814.12B yuan, continuing to grow from 693.17B yuan at the end of 2024. Of this amount, the assets under management of non-money-market funds were approximately 530.08B yuan.

Haitong Fund has stayed on a path of specialized and professional development, focusing on featured business areas such as pension funds, fixed income plus, and bond ETFs. It has continued to advance the development of the bond ETF business system, with its scale, product layout, and market functions being continuously improved. By the end of 2025, the total scale of bond ETFs managed by Haitong Fund was 125.04B yuan, up 146.1% from the end of the previous year, and it has ranked No. 1 in the industry for 5 consecutive years. By the end of 2025, Haitong Fund’s public fund assets under management were approximately 256.58B yuan, also increasing from 172.19B yuan at the end of 2024; of this amount, the assets under management of non-money-market funds were approximately 210.57B yuan.

Under the “one participant, one controller” regulatory requirements for public funds, the merger progress of Huian Fund and Haitong Fund has once again attracted widespread market attention.

In January 2025, the CSRC approved Guotai Junan’s absorption merger of Haitong Securities. After the merger, the new entity, “Guotai Haitong Securities,” will simultaneously hold Huian Fund (formerly under Guotai Junan, with a 51% stake) and Haitong Fund (formerly under Haitong Securities, with a 51% stake), and it will also invest in and take stakes in Fochun Fund. Its asset management subsidiary also holds public fund licenses. According to the “one participant, one controller” regulatory requirements for public funds, Guotai Haitong must formulate and submit an integration plan within one year. The merger of the two fund companies has become an inevitable choice for compliant rectification.

From the perspective of company fundamentals, Huian Fund was established in 1998 and is one of the “old top ten” public fund companies. Its public fund assets under management have now exceeded 800 billion yuan, and its product line covers all categories, including active equities, indices, fixed income, REITs, and QDII. Haitong Fund was established in 2003 as one of the first batch of Sino-foreign joint-venture public funds. Its public fund scale is around 250 billion yuan; although it is smaller in size, it holds three scarce licenses: social security funds, basic pension insurance, and enterprise annuities. Under regulatory conventions, it is extremely difficult to change the names of licenses such as social security annuities. If the “big eats the small” path of Huian Fund absorbing Haitong Fund is adopted, how to smooth the succession of these qualifications becomes a technical challenge.

Regarding the latest progress in the merger of Huian Fund and Haitong Fund, insiders said that the relevant matters are still under argumentation and research, and the plan has not yet been clarified. In fact, whether licenses can be directly inherited in a public fund merger has no precedent in the industry so far, which may also be a key bottleneck causing the merger plan to remain unclear for now.

Frequent personnel changes amid the shift from old to new

Huian Fund, which has already crossed the 800 billion yuan “threshold” in public fund assets under management, has faced a host of difficulties in recent years, including talent outflows and changes in senior executives.

In mid-January this year, nine funds under Huian Fund released concentrated announcements on changes of fund managers. Jiang Qiu, a veteran with 17 years of securities industry experience and more than 10 years of experience as a public fund manager, stepped down from managing all of the products under his charge on January 19 for personal reasons. The affected funds included nine such funds as Huian Dynamic Flexible Allocation and Huian Manufacturing Pioneer, covering multiple tracks including technology growth and high-end manufacturing.

Jiang Qiu’s departure is not an isolated case. Earlier, in March 2025, the well-known fixed income fund manager Sun Lina announced her resignation, with a cumulative tenure of more than 10 years. Data show that as of the end of 2024, the scale of public funds managed by Sun Lina reached 299.93B yuan. Meanwhile, Huian Fund’s combined scale of bond funds and money market funds under management was 443.56B yuan, meaning her personal management scale accounted for more than half.

In fact, since 2022, a number of outstanding equity fund managers, including Cui Ying, Xie Changxu, Zhang Liang, and Li Xin, have successively left Huian Fund. In the fixed income space as well, key personnel such as Su Yiping and Zheng Kecheng have also left.

At the same time, Huian Fund’s senior executives have also faced reshuffling. In August 2025, the former chairman Zhu Xuehua retired; Xu Yong, who previously worked at Changjiang Pension Insurance, took up the new role. In September of the same year, deputy general manager Gu Yuanyuan resigned after serving for 7 years and 7 months. Since 2020, key positions such as general manager and director of compliance inspection have also seen personnel adjustments. Frequent personnel changes have put pressure on the company’s development stability.

In addition, based on age, Huian Fund’s current general manager, Zhang Xiaoling, is approaching retirement age, and deputy general manager Weng Qisen is also close to his retirement time. Meanwhile, there have been reports that Yan Tao, assistant to the general manager of Changjiang Pension Insurance, is expected to take up the role of deputy general manager of Huian Fund soon. Some institutional sources have said that Huian Fund’s core executives’ next round of changes may be advanced in parallel with the integration process.

Concerns remain about internal control systems

In recent years, Huian Fund as a whole has maintained a steady trend of expansion in scale, but its profitability has shown significant fluctuations. Data show that from 2022 to 2024, Huian Fund’s operating revenue and net profit both saw a “two-year consecutive decline,” until it returned to growth in 2025.

In terms of products, its fixed income business has continued to play the role of a “stabilizer” within Huian Fund’s business framework. In recent years, its overall performance has been solid. In Guotai Haitong’s “fixed income” evaluation, the company ranked in the top 1/5 for the most recent year and in the top 1/3 for the most recent three years (as of the end of 2025). However, the performance of its equity-type products has not been as satisfactory. Wind data show that as of April 7, among 85 actively managed equity funds under Huian Fund that have trackable performance over the past three years, 24 have negative returns over the past three years. Of these, five funds, including Huian Quality Leading and Huian Ecological Priority, had drawdowns exceeding 20% over the past three years.

At the same time, Huian Fund has also exposed shortcomings in internal controls. In 2025, it received regulatory penalties due to issues such as lapses in internal control management.

According to the annual report and related announcements, in November 2025, Huian Fund was subject to administrative regulatory measures by the Shanghai CSRC—ordered to make rectifications and suspended acceptance of registration applications for fixed income public fund products—because of “deficiencies in areas including internal control management, investment management, and sales management.” In response to the above issues, Huian Fund stated in its annual report that it had carried out rectifications in a timely manner, including accountability for relevant responsible personnel; it would improve internal control制度 and strengthen the execution力度 of institutional implementation; and further strengthen the management of practitioners and compliance assessments.

The annual report also shows that Haitong Fund, which is under the same Guotai Haitong holding structure, was also subject to administrative regulatory measures in August 2025—issued in the form of a warning letter by the Shanghai CSRC—because of issues including “non-compliant investment management in private asset management businesses, insufficient active management in certain private asset management plans, and failure to implement the investment authority management制度 for the private asset management business.”

With multiple challenges such as regulatory penalties, changes in management, talent outflows, and merger and reorganization interweaving, Huian Fund is standing at a critical turning point in development. Whether this “old top ten” public fund institution can, under the pressure of compliant rectification, team reshaping, and business integration, consolidate its strengths in bond investment, make up for its shortcomings in stock investment, and successfully realize coordinated integration with Haitong Fund is still subject to observation by the market.