In 2014, the Company undertook the project of Shenyin & Wanguo Securities merging with Hongyuan Securities. So far, the project has been China’s largest market-oriented M&A case in China’s securities industry. Registered in Xinjiang, Hongyuan Securities is the only listed securities company in Xinjiang. Shenyin & Wanguo is China’s first joint-stock securities company with the registration place in Shanghai. Both sides have taken on important significance to the Shanghai government and the Xinjiang government. After the M&A case was completed, Shenwan Hongyuan Securities Group will become a securities company in the first echelon.

The case was different from most of M&A cases in China’s capital market, which were merged between parent companies and subsidiaries. Indeed, the case is innovative in that two independent companies leveraged the capital market to conduct market-oriented equal combination. It is of benchmark significance for a new round of reform of state-owned assets. It is a major innovation.

In the project reorganization, as for the value of Hongyuan Securities, we adopted the average share price for twenty days before the share trading was suspended; as for Shenyin & Wanguo’s appraisal, valuers got an in-depth understanding of the characteristics of appraisal objects based on the full understanding of the reorganization plan, and adopted the market approach to accurately select comparable companies, to reasonably determine value ratio and correction factor, and checked the appraisal results in multiple angles.

The case of Shenyin & Wanguo Securities merging with Hongyuan Securities is a market-oriented equal combination case, producing a huge impact in the society and gaining recognition of investors. Meanwhile, the original shareholders of Shenyin & Wanguo also thought highly of the case. After the reorganization, Shenyin & Wanguo became a brokerage firm in the first echelon with its domestic assets surpassing RMB 100 billion, thus gaining the momentum for sustainable development. CEA should shoulder social responsibility of appraisal intermediary companies. By providing professional services, we ensured the smooth realization of the significant economic behavior and provided a unique experience for the market approach appraisal field’s technological development.