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China Economic Net: Financial Business of Oceanwide Holdings Gears Towards Real Economy with Focus on Industrial Service Sectors


China Economic Net, Beijing, December 18 | The real economy is the foundation of finance, while finance is the blood of the real economy. Along with the guidelines frequently introduced by policymakers and the guidance of regulatory policies on the financial industry to "shift from the virtual economy to the real economy" in recent years, how to better serve the real economy was the basic tone of development of financial enterprises in 2017.

As early as March this year, Lu Zhiqiang, Chairman of Oceanwide Holdings, said in an interview that the ultimate goal of Oceanwide is to "build a complete financial service system that consists of multiple financial platforms with different business characteristics and service models, so as to facilitate the real economy to the greatest extent." Oceanwide Holdings' intention to serve the real economy has been fulfilled through its securities, trust and insurance platforms, as well as its strategic investment business.

In the process of direct financing in the capital market, enterprises can obtain funds to support the development of operations through IPO, private offering, and issuance of bonds. As sponsor institutions, securities enterprises serve as not only intermediaries that connect enterprises and regulators, but also "advisors" that help business development.

Minsheng Securities, as the first financial enterprise acquired by Oceanwide Holdings during its initial stage of transformation, has been positioned as a "capital intermediary investment bank focused on full industry-chain services" in recent years, and played a key role in helping a number of industrial enterprises enter the capital market and gain momentum for development.

According to incomplete statistics, in 2017, Minsheng Securities completed IPO projects for 15 enterprises, including Tuna Corporation and AnJoy Food; debt projects for 3 enterprises including Fastprint and Start; and private offering projects for 2 enterprises of Sunyes and Seagull. These enterprises are mostly manufacturing industrial enterprises. For example, Sinexcel, which was listed this year, is mainly engaged in the production of power quality equipment, electric vehicle charging piles, and new energy power conversion equipment. Its entry into the capital market allowed Sinexcel to get timely funding support so as to meet the need to further develop the new energy vehicle market.

In addition to the investment banking business, Minsheng Securities has actively cooperated with local governments. In 2017, Minsheng Securities reached cooperation agreements with Shunde, Foshan and Jiangdu, Yangzhou to assist the development of local industries and enterprises through equity investment funds and industry guidance funds.

Minsheng Trust is currently the fastest growing financial enterprise under Oceanwide Holdings. Its innovations and attempts to serve the real economy have inspired new ideas for the trust industry.

In June 2016, Minsheng Trust established the Ship Fund Department to invest in dry bulk carriers by raising funds from qualified investors and financing lease. In early 2017, the 80,000 DWT "AGRJ Princess" bulk carrier invested by Minsheng Trust was launched. Minsheng Trust also invested in four super-sized handymax bulk carriers of Radiance Group. In this way, Minsheng Trust has become the only company in the industry engaged in the shipping business, and boosted the development of the sluggish cargo shipping industry.

The changes in the business structure of Minsheng Trust reflect the "shift from the virtual economy to the real economy." According to statistics, the new business of Minsheng Trust amounted to RMB 158.9 billion in 2016, of which the active management scale totaled RMB 123.1 billion or 77.5%, and the proportion of the "intra-banking circulated" channel business was greatly reduced. Additionally, its trust projects for industrial and commercial enterprises occupied a much higher proportion in all of its trust projects, while its trust projects for real estate dropped significantly.

Asia-Pacific Property & Casualty Insurance is a core enterprise of Oceanwide Holdings in its insurance business segment. Since 2016, the domestic insurance industry has experienced a trend change from "flooding of insurance funds" to "returning to the origin of insurance." In this context, Asia-Pacific Property & Casualty Insurance has always adhered to continuous innovation and development of guarantee-based business, in order to provide risk guarantee for the real economy and the people's livelihood.

The relevant person in charge of Asia-Pacific Property & Casualty Insurance stated that with the development of society and the advancement in science and technology, the traditional marine insurance and fire insurance business of the property and casualty insurance industry has shrunk, but the demand for risk guarantee related to liability and credit has been increasing. In response to this change, Asia-Pacific Property & Casualty Insurance has developed a large number of new products to meet the needs of enterprises and the people's livelihood.

It is understood that Asia-Pacific Property & Casualty Insurance currently offers 49 major insurance products, 31 of which are new types of insurance developed since 2016. For example, the "QR Code Scanning Code Security Liability Insurance," which was developed to cover the common use of QR code payment, provides risk guarantee services for payment enterprises. The "Compensation Insurance for Cost Losses Caused by Rejection during the Trademark Blind Period" provides risk guarantee for enterprises against losses which may be incurred during the trademark registration process, and has been popular with enterprises.

Financial enterprises under Oceanwide Holdings have their own advantages. They have provided financial support and risk guarantee for the real economy on the basis of working on their main business. Further, Oceanwide Holdings has also invested in forward-looking industries and high-quality enterprises through strategic investment, in order to help the transformation and upgrading of the real economy.

In the strategic investment segment, Oceanwide Holdings has invested in BAIC BJEV, WeWork, CATL and other enterprises in recent years, and proposed to focus on such areas as big data, smart home, and mixed ownership reform of state-owned enterprise. BAIC BJEV is a new energy automobile enterprise with the largest market share, the largest scale, and the most complete industrial chain in China's blade electric vehicles (BEV) market. CATL has focused on power battery systems and energy storage systems of new energy vehicles, and its sales volume of battery systems has ranked top three among global power battery enterprises over the past two years.

In the institutional survey at the beginning of December, the relevant person in charge of Oceanwide Holdings stated that the company will focus on the strategic investment to serve the real economy and prevent financial risks, and that the company has inspected and stored a large number of quality projects covering a wide range of industries and fields. Relevant person of Oceanwide Holdings also stated that in the next stage, the company, which is positioned to serve the real economy, will actively adjust the business structure, accelerate market development, and improve professional capabilities in terms of its financial business, so as to foster more sustainable and stable profit growth areas and effectively improve the company's operating benefits.