"The 'Invisible Hand' Hengjian Holdings' 520 Billion Industry Capital Strategy"

Ask AI · How can Hengjian Holdings transform from a shareholding platform into an industrial engine?

SOUTHERN FINANCE REPORTER Chen Jian, Guangzhou Report

Among the many well-known investment institutions in Guangdong, Guangdong Hengjian Investment and Holding Co., Ltd. (hereinafter “Hengjian Holdings”) is extremely low-profile. However, this “state-owned capital aircraft carrier” with total assets exceeding CNY 520 billion is one of the capital forces that cannot be overlooked in Guangdong’s wave of state-owned enterprise reform and industrial upgrading.

In recent years, Hengjian Holdings has transformed from an equity-holding platform into an industrial investment platform. It controls a fund portfolio with a scale of more than CNY 190 billion. It has made frequent investments in high-end manufacturing, new energy, and semiconductor tracks, becoming the “invisible deal-maker” behind Guangdong’s industrial upgrading.

According to recently released data, Hengjian Holdings set new highs again in 2025 operating performance indicators. Full-year business revenue (including investment gains) grew 39.11% year over year, net profit grew 18.30% year over year, and the scale of new investments during the “14th Five-Year Plan” period exceeded CNY 50 billion.

After reviewing publicly available data, Southern Finance reporter found that more than 95% of Hengjian Holdings’ revenue is contributed by its holding company Guangdong Energy Group. In recent years, profit growth has mainly benefited from investment gains from three business segments: equity management, capital operations, and fund investments.

A former relevant executive of Hengjian Holdings once said that the company aims to become the “deal-maker” for Guangdong Provincial government-owned assets and to become Guangdong’s “Temasek.” Over the past decade, the company has shown that state-owned capital can not only preserve and increase value, but also become a core engine for industrial upgrading.

If we divide Hengjian Holdings’ development path over its 20-year history, 2016 is a major turning point.

In 2006, Guangdong Yue Dian Group established Guangdong Hengsheng Investment and Holding Co., Ltd. with capital from the provincial SASAC on behalf of the provincial SASAC. This was the predecessor of Hengjian Holdings; at that time, registered capital was only CNY 50 million, and it resembled a platform company created mainly to hold provincial state-owned equity.

Over the next 10 years, multiple important assets were injected into Hengjian Holdings. In March 2009, Guangdong Yue Dian Group (renamed Guangdong Energy Group) transferred 76% of its equity into the company, and registered capital increased to CNY 15.32B. In January 2013, China General Nuclear Power Group Co., Ltd. transferred related equity into the company. In December 2014, 38.4% of the equity of China Southern Power Grid was recorded as an asset, increasing assets by approximately CNY 76.26B, and the company’s net asset scale grew further.

Within these 10 years, although Hengjian Holdings also invested in directed share issuance projects such as Zoomlion and TCL, it played a more role as an “SOE equity-holding platform.” Its core income mainly came from equity dividends from Yue Dian Group, and the investment gains contributed by market-oriented capital operations accounted for a relatively low share.

2016 was a turning point in Hengjian Holdings’ fate. With approval from the Guangdong Provincial Party Committee and the provincial government, the Guangdong Provincial SASAC issued guiding documents, and Hengjian Holdings became the only provincial-level state-owned capital operation company in Guangdong at present.

The main responsibility of a state-owned capital operation company is to achieve the goals of improving the efficiency of state-owned capital operations and capital returns through market-oriented methods such as equity operations, fund investments, and incubation and cultivation.

This new positioning also means Hengjian Holdings’ development model needed to undergo a fundamental change.

In 2018, Wen Wenxing took office as chairman of Hengjian Holdings. At the time, when relevant officials from the Guangdong Provincial Party Committee Organization Department announced the appointment decision, they said Wen Wenxing had a sharp market sense, was familiar with the investment and financing management of large-scale infrastructure construction, and had strong capabilities in overall coordination and management.

Not long after taking office, Wen Wenxing proposed, based on the positioning of a state-owned capital operation company, to establish a “four-in-one + fund” model involving the government, industrial capital, Hengjian Holdings, and social capital. The goal was to build a trillion-yuan Hengjian fund ecosystem cluster and actively promote state-owned capital to invest in the layout of emerging industries.

Within just a few years, the CNY 20 billion SOE restructuring and development fund, the CNY 40 billion Guangdong Province Agricultural Supply-Side Structural Reform Fund, the CNY 20 billion advanced manufacturing industry investment fund, and the CNY 20 billion Guangdong–Macao–Cooperation development fund were rolled out one after another. With one hand, Hengjian Holdings built a differentiated, serialized ecosystem cluster of funds at the trillion-yuan scale, completing the key leap from passive shareholding to proactive investment.

In November 2021, Wen Wenxing was transferred to become mayor of Qingyuan City. Tang Jun, who had served as general manager of Hengjian Holdings, “took the baton” to become the new chairman. Tang Jun had already proposed as early as 2018 that Hengjian Holdings should become Guangdong’s “Temasek.”

After Tang Jun became chairman, on the basis of building the trillion-yuan fund ecosystem cluster, he proposed exploring a new model for innovation consortia.

In Tang Jun’s view, in the past, technology innovation commonly suffered from pain points such as low efficiency in resource integration, insufficient participation incentives, poor transformation of results, and operations that were hard to sustain.

Under the innovation consortium model, core companies in the industrial chain serve as the “question-setters,” proposing specific research and development needs; universities and research institutes, as participants, provide research and development support for the innovation consortium; investors join with multiple parties such as the government and social capital to participate together in investment, construction, and management; and the operations and management party is responsible for the daily operations and value distribution of the innovation consortium.

Previously, in an interview with Southern Finance reporter, Tang Jun said that as the “deal-maker” of Guangdong’s state-owned assets, Hengjian Holdings must unwaveringly support strategic emerging industries in Guangdong in strengthening and optimizing themselves by using various capital operation tools, helping to foster the concentration of technological innovation in Guangdong and the rapid development of advanced manufacturing industries.

The successive reform by the two chairmen has enabled Hengjian Holdings to truly become Guangdong’s “invisible deal-maker” for industry. It does not directly participate in companies’ day-to-day operations, but it guides major industrial projects to land in Guangdong through capital, promotes SOE reform and merger-and-acquisition restructuring, and drives integration of the industrial chain and scale expansion. Its name rarely appears in public view, yet it plays an indispensable role in the rollout of many major industrial strategies in Guangdong.

On February 6 this year, after working at Hengjian for many years, Tang Jun retired smoothly. As of now, the company has not appointed a new chairman, and operations are temporarily chaired by general manager Yang Chenhui. And the new chairman will decide where Hengjian Holdings will go during the “15th Five-Year Plan” period.

In Hengjian Holdings’ 2026 New Year message, Yang Chenhui looked back on Tang Jun’s actions during his tenure as chairman. The article states that in reviewing the “14th Five-Year Plan” period, under Tang Jun’s chairmanship, with a strong sense of political responsibility, Hengjian Holdings achieved a series of accomplishments. At the company’s 2026 annual work meeting, Yang Chenhui said that the next step would be to follow the work requirements of “grasping investment with heavy emphasis,” and to make contributions in areas such as supporting state-owned assets and SOEs to better play a supporting role and mobilizing social capital.

Hengjian Holdings has not yet released its latest 2025 financial report. However, the company’s 2025 Q3 report shows that its total assets were CNY 528.7 billion, up 4.35% year over year. Total liabilities were CNY 291.0 billion, up 2.98% year over year. Shareholders’ equity was CNY 237.7 billion, up 6.08% year over year.

In the first three quarters of 2025, the company recorded operating revenue of CNY 61.62B, down slightly by 2.2% year over year. Investment gains were CNY 9.1 billion, up 8.5% year over year. Net profit attributable to the parent company was CNY 8.71B, up 12.52% year over year.

The financial report shows that Hengjian Holdings’ operating revenue mainly includes two business segments: the power segment and other segments. The power segment revenue is mainly contributed by its subsidiary Guangdong Energy Group, which has accounted for more than 95% for a long time. Revenue from other segments is smaller, mainly including consulting fees, brokerage commissions, rental income, survey and design income, and so on.

Taking the first half of 2025 as an example, the power segment recorded revenue of CNY 37.21B, accounting for 98% of total revenue, while other segments recorded revenue of CNY 762M, accounting for only 2% of total revenue.

Because the performance of Guangdong Energy Group is relatively stable, according to the financial report, Hengjian Holdings has kept its operating revenue stable in recent years, with relatively small fluctuations.

To break down Hengjian Holdings’ CNY 520 billion asset map, you can analyze it through its subsidiaries and equity-holding entities. Currently, Hengjian Holdings holds equity in 6 central SOEs and 2 provincial and municipal SOEs. The number of central SOEs it holds and the scale of its assets rank first among provincial-level state-owned capital operation companies in China.

According to the relevant provisions of the “Enterprise Accounting Standards,” if an investor can exercise control over the investee, the investee is its subsidiary and the subsidiary’s revenue is included in the consolidated financial statements under the “Operating Revenue” line item. For investee companies that do not constitute control, their profits are included in the “Investment Gains” line item.

Judging from Hengjian Holdings’ main controlled subsidiaries, they mainly include Guangdong Energy Group, Guangdong Provincial Institute of Architectural Design and Research Group (abbreviated as “Guangdong Janke”), Guangdong Hengjian Asset Management, Guangdong Hengjian Guotou, and others. Among them, Guangdong Energy Group accounted for more than 90% of the net profit contributed in 2024.

In investee companies without being controlled, their business can be divided by Hengjian Holdings’ operations into three segments: equity management, capital operations, and fund investments. In the equity management segment, the main source is dividends from holding central and state-owned enterprises, which has long contributed most of Hengjian Holdings’ investment gains and profits. The capital operations segment mainly involves directed share placements and investments in the secondary market. The fund investment segment includes 7 subsidiary fund management companies, which are related to the aforementioned trillion-yuan Hengjian fund ecosystem cluster.

Data show that in recent years, Hengjian Holdings’ investment gains have shown a rapid growth trend. From 2020 to 2024, Hengjian Holdings’ investment gains were CNY 3.29B, CNY 4.93B, CNY 7.64B, CNY 10.07B, and CNY 10.38B respectively, with a compound annual growth rate of about 33.23%.

Combining the data from last year’s third quarter, it can be expected that Hengjian Holdings’ investment gains in 2025 are likely to continue the rapid growth trend.

In the equity management segment, besides Guangdong Energy Group and the Pearl River Delta Intercity Rail Transit Company, the company also holds equity in six central SOEs: State Grid South? (South?); China Southern Power Grid (State Grid? Actually phrase: “南方电网”), China Southern Airlines Group, China General Nuclear Power Group, China General Nuclear, AVIC Tongfei, and Baosteel Zhanjiang Iron & Steel. Even based on disclosed data in 2024 alone, the investment gains contributed are close to CNY 6 billion.

The capital operations business mainly centers on participating in listed companies’ directed share placements, supplemented by cornerstone investments and market value management, among other activities. As of the end of March 2025, the company held a total market value of its A-share stocks of CNY 21.59B and the total market value of its Hong Kong-listed stocks of HKD 3.39B.

In 2025, the company continued to invest around emerging industries such as high-end manufacturing, communications, 5G, and mobile internet. In 2024, Hengjian Holdings increased its investment efforts in line with market conditions and added projects including Liuyao Group, Wenxian Shares, Haohua Technology, and Ehell? (怡合达). In the same year, it exited projects including China Railway Signal & Communication Corporation, GoTo? (佳都科技), and SenseTime-W, resulting in a year-on-year decline in cash回笼? (cash inflows), but it still maintained a relatively large scale and achieved relatively good returns. The loss from fair value changes of its main investment projects decreased year over year.

In 2023 and 2024, the capital operations segment returned capital of CNY 5.46B (with Hong Kong-dollar funds converted at current exchange rates, same below), and CNY 2.77B respectively, and achieved investment gains of CNY 913M and CNY 777M.

In the fund management segment, as of the end of March 2025, the company managed 23 master funds with total subscribed size of about CNY 84.87B and total paid-in size of about CNY 37.85B. Of these, the company invested with its own funds of about CNY 13.03B. In the same period, it managed 28 feeder funds with total subscribed size of CNY 43.02B and total paid-in size of CNY 16.9B, of which the company’s paid-in was about CNY 2.55B.

According to the latest disclosures by Hengjian Holdings, as of this February, the company has cumulatively initiated and participated in the establishment of 86 funds, with a cumulative fund size of more than CNY 190 billion.

Cixin? (中诚信国际) believes that as an important strategic investment platform under Guangdong Province, the company leverages fund management and its own capital investments to mobilize social capital to serve the development of Guangdong’s industries. It also contributes some management fee income and investment gains. However, the master fund investment cycle is relatively long, so the subsequent exits and realization of returns of the relevant funds need to be monitored.

From its establishment in 2006 to today, Hengjian Holdings has gone through two decades of history. From the earliest equity-holding platform to now being Guangdong’s only provincial-level state-owned capital operation company, Hengjian Holdings’ growth has always kept in sync with Guangdong’s economic development.

Although Hengjian Holdings is benchmarked against Temasek, it has tried to chart a state-owned capital operation path that is distinctively China’s and distinctively Guangdong’s.

As a Singapore state-owned investment platform, Temasek’s development secret lies in market-oriented capital operations and maximizing shareholder returns. Hengjian’s mission, however, is not only to preserve and increase the value of state-owned assets, but also to shoulder the responsibility of serving national strategies and promoting industrial upgrading in Guangdong. It must pursue financial returns in the capital markets and also carry the responsibilities of an SOE in industrial development—this is the fundamental difference between China’s state-owned capital operation platform and overseas sovereign funds.

In recent years, Hengjian Holdings, as a shareholder, has actively intervened to push Guangdong Janke’s mixed-ownership reform and ultimately helped it succeed in getting listed. With Cynd? (中芯种业) as the core, it introduced companies such as Ras? (拉塞特机器人), Laso? (拉索生物), Xingnong Hulian? (欣农互联), to realize the whole-chain “breeding—intelligent farming—data services,” providing a new organizational mechanism for the transformation of scientific and technological achievements.

To strengthen the weak links in Guangdong’s semiconductor display industry chain, Hengjian Holdings led an investment of CNY 4.38B to jointly participate with Guangzhou and the Huangpu District in a capital increase and shareholding of TCL Huaxing Guangzhou t9 project. This project not only brings the company substantial investment gains, but more importantly, further enhances Guangdong’s right to speak in the global ultra-high-definition display field.

On March 30, 2026, TCL Technology released an announcement stating that it plans to purchase 45.00% of Guangzhou Huaxing Semiconductor’s equity held by companies including Hengjian Holdings for CNY 9.32B.

As Guangdong’s “state-owned capital aircraft carrier,” Hengjian Holdings’ innovation model lies not only in successfully promoting the conversion and transformation of multiple technology achievements, but also in providing a mechanism paradigm that can be referenced by local state-owned capital operation platforms nationwide. It goes beyond the traditional framework of “industry funds + government subsidies,” exploring a systematic path that integrates capital coordination, resource restructuring, and institutional synergy.

Of course, the challenges facing Hengjian Holdings are not easy: how to solve the problem of fluctuations in the profitability cycle and establish a more stable profitability model? How to find a better balance between policy-driven elements and market-oriented mechanisms, and further enhance the professionalism of its investments? How, under the background of a unified national large market, to expand from Guangdong to the rest of the country, even to the global market?

On one side, more than 95% of Hengjian Holdings’ revenue comes from Guangdong Energy Group, its holding company. On the other side, in recent years Hengjian Holdings has increased its investments in the capital market. The stock price fluctuations of its equity holdings in listed companies will directly affect disposal gains and fair value change gains.

In the bond issuance information memorandum recently released by Hengjian Holdings, it points out that changes in the debt levels and profitability of the company’s controlling or investee companies will directly affect the issuer’s ability to repay debts and profitability. If the state continues to lower the on-grid electricity prices and the amount of electricity transmitted from west to east continues to increase, there is a risk that Guangdong Energy Group’s financial condition will fluctuate.

At the same time, the company’s coverage across multiple industrial sectors also poses challenges to its investment capability and management capability.

The bond issuance information memorandum states that the company’s investment areas include multiple business segments such as power generation and sales, rail transit construction, aircraft manufacturing, steel production, insurance agency, and park development. The diversification of operations increases the difficulty of managing the company. Meanwhile, the company has many subsidiaries and a wide management span. Integrating and developing existing businesses and expanding into new areas will impose higher requirements on its management capability and internal controls.

The answers to these issues will determine whether this CNY 520 billion state-owned capital platform can truly become a world-class state-owned capital operation company on par with Temasek. It will also determine whether, in Guangdong’s chessboard of high-quality development, it can grow from an “invisible deal-maker” into a true “industrial pioneer.”