"Decade-Long Alliance" Faces New Turbulence: Xiang Finance's Absorption and Merger of Dazhihui Suddenly Halted

Source: 21st Century Business Herald Author: Liu Xiafei

On March 15, Xiangcai Securities and Great Wisdom both announced that the transaction to merge Xiangcai Securities into Great Wisdom through a share swap and raise supporting funds has been suspended due to the valuation data in the filing documents expiring on March 14. The Shanghai Stock Exchange has suspended review of this transaction in accordance with regulations.

Both companies stated that the suspension will not have a significant adverse impact on the transaction. Their operations are normal, and they are actively updating valuation data, financial data, and application documents. Once the updates are completed, they will submit the revised materials as soon as possible and apply to resume review.

However, despite both companies saying the impact is minor, the market has sparked discussions about a potential “restructuring delay.”

In fact, delays in review due to “data validity period” issues are not uncommon in the A-share market, especially in the first quarter (January-March), when old and new financial data are exchanged. According to incomplete statistics by 21st Century Business Herald, since 2026, at least 15 companies including Shitou Shares, Yingli Shares, Huamao Technology, Bohai Auto, and ST United have announced suspensions of mergers and acquisitions review due to expired financial or valuation reports.

From past cases, companies typically resume review after 1-2 months of updating and supplementing data. Some companies, with faster actions, have applied for review resumption within just a few trading days.

From the termination of Great Wisdom’s planned acquisition of Xiangcai Securities in 2015 to the acceptance of Xiangcai Securities’ proposed share swap merger with Great Wisdom in 2025, this decade-long “reunion” has attracted market attention.

Looking ahead, industry insiders generally hold a positive outlook on the merger, expecting it to create a new “traffic + license” model for internet securities firms amid the wave of M&A in the securities industry.

Data Expiry Triggers Review Suspension

According to the announcement, on March 14, Xiangcai Securities and Great Wisdom received notices from the Shanghai Stock Exchange that the valuation data submitted in their application documents had expired and needed updating. The exchange suspended review of the transaction in accordance with the “Rules for Major Asset Restructuring of Listed Companies.”

Further details show that the valuation report’s validity expired on March 14, 2026, exceeding the maximum 12-month validity period.

Additionally, the restructuring report cited the most recent financial statements as of June 30, 2025. According to the six-month validity rule, these will expire on March 31, 2026.

Both companies stated that the suspension will not significantly affect the transaction, and their operations are normal.

Regarding next steps, both parties said they are actively working with intermediaries to update valuation data, financial data, and application documents. Once completed, they will promptly submit the updated materials to the Shanghai Stock Exchange and apply to resume review.

Common Data Expiry “Review Suspension” in Q1

Although both companies said the impact is minor, the market has discussed the possibility of “restructuring delays.”

Is it common for mergers and acquisitions to be suspended due to “data validity” issues?

In fact, such situations are not rare in the A-share market, especially in the first quarter (January-March). According to incomplete statistics by 21st Century Business Herald, since 2026, at least 15 companies including Shitou Shares, Yingli Shares, Huamao Technology, Bohai Auto, and ST United have announced suspensions of review due to expired financial or valuation reports.

For example, Bohai Auto planned to acquire four companies owned by Hainachuan. The transaction was suspended twice this year—once on January 31 and again on February 28—due to expired audited financial data and valuation reports.

Industry insiders note that according to regulations on major asset restructuring, the most recent audited financial data is valid for six months after the reporting date. If the transaction involves issuing shares, extensions may be granted under special circumstances, but not exceeding three months. If data is not updated within this period, the exchange will suspend review.

On one hand, from the company’s perspective, submitted financial data are often based on mid-year or year-end figures from the previous year. After a 6-9 month review cycle, relevant data often expire in early the following year.

On the other hand, from the auditor’s perspective, the first quarter is peak season for annual report audits, leading to intensive audit work and potential delays in data updates.

Therefore, during Q1, it is common to see situations where “old data expire while new data are still under audit,” causing temporary review suspensions in many M&A transactions.

Given that such delays are common, how long does it usually take for review to resume and for the transaction to proceed?

Past cases show that companies typically resume review after 1-2 months of data updates and supplementation. Some companies, with faster responses, have applied for review resumption within just a few days.

For example, Wuhan Holdings’ plan to acquire 100% of Wuhan Municipal Engineering Institute was suspended on December 31, 2025, due to expired financial data. After extension audits and document updates, the company received approval to resume review on February 28, 2026—about two months later.

A faster example is Chuangyuan Xinke’s plan to acquire 100% of Shanghai Weiyu Tiandao Technology, which was suspended on January 30, 2025, due to expired financial data. The company applied for review resumption on February 9 and received approval on February 11, just 10 days later.

“Decade-long Marriage” Sparks Industry Attention on “Traffic + License” New Model

Returning to the merger of Xiangcai Securities and Great Wisdom, the ongoing discussions are partly related to the long timeline of this deal.

In fact, this is not the first attempt at a “marriage” between the two companies. In 2015, Great Wisdom planned to acquire Xiangcai Securities for 8.5 billion yuan, which was officially accepted by the Shanghai Stock Exchange but was soon suspended due to Great Wisdom’s suspected disclosure violations and investigation.

Ten years later, the roles have reversed: Xiangcai Securities (renamed after being acquired by HaGaoke) is now absorbing Great Wisdom. This “reunion” has attracted significant market attention.

From the initial disclosure of the merger plan on March 28, 2025, to the suspension of review on March 14, 2026, due to expired documents, nearly a year has passed. For such a high-profile major restructuring, this duration is not short, testing market patience and attention.

Additionally, in recent months, both Great Wisdom and Xiangcai Securities have faced legal issues.

In November 2025, an individual shareholder filed a lawsuit against Great Wisdom over procedural compliance in the restructuring. Although the suit was quickly withdrawn and did not affect the process, it sparked market discussions about the transaction’s legality.

Furthermore, Xiangcai Securities is involved in a case related to the 30 billion yuan “Chengxing Group” scandal, which saw new developments in February. Xiangcai Securities disclosed that Yunnan Trust, in a civil trust dispute, sued Chengxin Company for damages of about 343 million yuan and sought joint liability. The case is now in retrial, with no final resolution yet.

It’s understandable that, with negative events still unresolved, even routine issues like review suspension can cause investor anxiety about prolonged uncertainties.

However, industry insiders remain generally optimistic about this decade-long “reunion” amid the wave of securities industry mergers.

Analysts note that the long interval indicates mutual recognition of long-term business complementarity. After previous setbacks, both sides are likely to adopt more cautious and pragmatic integration plans this time, which could enhance transaction stability.

From their current fundamentals, the “safety cushion” for this merger is also stronger.

In 2025, Xiangcai Securities’ core entity, Xiangcai Securities, is expected to achieve total operating revenue of about 1.955 billion yuan, up 28.8%, with net profit around 553 million yuan, a 157.5% increase.

Great Wisdom expects a net profit attributable to shareholders of -34 million to -50 million yuan in 2025, with net profit after non-recurring gains and losses of -69 million to -85 million yuan. Although not profitable yet, the loss has narrowed significantly compared to 2024.

Regarding the future prospects, Pacific Securities’ chief analyst Xia Mian’ang pointed out that after the merger, Xiangcai Securities’ full license and Great Wisdom’s millions-level monthly active users could combine to create a new “traffic + license” internet securities model.