Guotai Junan announces significant asset impairment, renews key agreements

Guotai Junan Securities announced a 2.38 bn yuan provision for asset impairment for January-September 2025, comprising 2.33 bn yuan for credit impairment losses and 4.88 m yuan for other asset impairment losses. This provision is expected to reduce net profit by 1.72 bn yuan, exceeding 10% of the company's 2024 audited net profit. The impairment mainly impacts long-term receivables (1.01 bn yuan), finance lease receivables (449.96 m yuan), and other debt investments (460.77 m yuan), driven by the absorption and merger of Haitong Securities and subsequent growth in leasing and other businesses.

Additionally, the company renewed continuing connected transaction agreements with Huatai-PineBridge Fund Management and Shanghai International Group. The agreements, valid from January 1, 2026, to December 31, 2028, involve the provision of securities and financial products and services. The renewed framework agreements for Huatai-PineBridge Fund Management involve estimated inflows/outflows of 40.84 bn yuan to 63.19 bn yuan for securities and financial product transactions, and income/expenses of 71 m yuan to 259.69 m yuan for financial services.

For Shanghai International Group, the renewed framework agreements project securities and financial products inflows/outflows from 2.94 bn yuan to 4.35 bn yuan, with financial services income/expenses ranging from 23.57 m yuan to 55.12 m yuan over the three-year period. These renewals, approved by the board, aim to maintain business continuity and support the company's expanded operations post-merger.