Haitong Securities responds to merger inquiry, defends financials

Haitong Securities (SSE:600837) has responded to the Shanghai Stock Exchange's inquiry regarding its planned merger with Guotai Junan Securities. The response, prepared with Lixin Certified Public Accountants, addresses concerns about Haitong's declining financial performance from 2021 to the first nine months of 2024. Haitong attributes the declines to market volatility, reduced trading activity, increased financing costs, and impairment losses on margin trading. The company asserts that it has adequately provisioned for losses and that its financial position remains strong despite the downturn. The filing details the reasons for revenue and net profit fluctuations, providing a breakdown by business segment. It also analyzes these changes against comparable companies in the sector, justifying the divergence in performance. Haitong maintains that its goodwill impairment calculations are accurate and compliant with accounting standards. The company also provides details regarding the calculation of goodwill expected to be generated by the merger.