Four Shareholders' Equity Frozen, Only 6 Executives Remaining, Qianhai Property Insurance Plans Capital Increase to Address Difficulties

This article (chinatimes.net.cn) reporter Wu Min, Beijing report

A resolution passed at a temporary shareholders’ meeting has brought the long-dormant Xinjiang Qianhai United Property Insurance Co., Ltd. (hereinafter “Qianhai Insurance”) back into the market spotlight. Recently, this insurance company, deeply tied to the Baoneng Group, approved by unanimous vote a proposal to change its registered capital and shareholders.

For Qianhai Insurance, which has been troubled by long-term share freezes, management upheaval, and ongoing losses, this “shareholder change” resolution passing unanimously suggests that new funds are likely to enter through the transfer of frozen shares or participation in capital increases, helping to break the deadlock and restore proper corporate governance.

However, for Qianhai Insurance to truly emerge from the mire, it still faces many challenges: four shareholders’ stakes are frozen; its deputy general manager resigned quietly after just four months in office; its overall cost ratio is as high as 232.95%, far exceeding the breakeven point; and its risk comprehensive rating has been rated as Category C for six consecutive quarters.

Regarding the specific amount of registered capital to be changed and whether there is a clear new shareholder entering, our reporter has contacted Qianhai Insurance for an interview. As of press time, no response has been received.

Shareholding Dilemma

The recent second extraordinary shareholders’ meeting for 2026 announced that a proposal to change registered capital and shareholders received full support from attending shareholders. The vote showed that 1 billion shares, representing 100% of the voting shares present, were in favor, with no opposing or abstaining votes.

This approval marks a procedural step toward adjusting Qianhai Insurance’s shareholding structure.

Looking back at its shareholding structure, this property insurance company, established in May 2016 with a registered capital of 1 billion yuan, is based in Shenzhen. At its founding, the shareholder structure was relatively balanced: Shenzhen Shen Yue Holdings Co., Ltd., Shenzhen Jushenghua Co., Ltd., Kexin Heng Co., Ltd., Shenzhen Jianye Engineering Group Co., Ltd., and Shenzhen Yue Shang Logistics Co., Ltd. each held 20%.

On the surface, this structure appears to be checks and balances, but in reality, from its inception, it has been closely linked to the Baoneng Group.

As Baoneng’s leader Yao Zhenhua and his capital expansion faced liquidity crises, the shareholders of Qianhai Insurance also fell into difficulties, with share freezes becoming a sword of Damocles hanging over the company.

According to the latest solvency report, the frozen share situation is concerning. Shenzhen Jushenghua’s 20% stake in Qianhai Insurance has been frozen multiple times, with the last freeze extending until December 2028. Shenzhen Shen Yue Holdings’ 17.2% stake is frozen until September 2026. Shenzhen Jianye Engineering’s 20% stake has also been frozen multiple times, with the last freeze until November 2028. Kexin Heng’s 0.7% stake is frozen until December 2027. Of the five shareholders, only Shenzhen Yue Shang Logistics’ shares remain unfrozen; the other four are affected.

Behind these freezes are unresolved debt crises among the shareholders. A court ruling in September 2024 required Jushenghua and Baoneng Group to repay Zhongrong Life Insurance 2.025 billion yuan. To enforce this, the court froze several assets of Jushenghua, including its 20% stake in Qianhai Insurance.

This stake was later auctioned on Alibaba’s judicial auction platform, with an initial price of 30.8 million yuan. However, the auction was suspended due to objections from third parties. The court planned to restart the auction in October 2025, but it was again delayed, falling into another suspension.

Management Turmoil

Beyond the shareholding crisis, management upheaval is also a significant issue for Qianhai Insurance.

In recent years, its core management team has seen frequent changes. From the former Chairman Yao Zhenhua, who was banned from the industry for ten years, to Huang Wei, who took over as chairman and was reported under investigation in 2022, the leadership of Qianhai Insurance has been shrouded in uncertainty.

A personnel change at the end of 2025 again drew market attention. The company’s only deputy general manager, Cao Jianjun, quietly left the management team, just four months after officially taking office. Cao’s appointment was approved by regulators on August 5, 2025, and he officially became deputy general manager on August 8. His tenure lasted just over four months.

Cao Jianjun’s background is quite unique. Public information shows he was born in 1969 and previously worked at China Construction Sixth Engineering Bureau, Tianjin Port Authority, Tianjin Binhai New Area Management Committee, Tianjin Binhai New Area Economic and Information Technology Committee, and Tianjin Binhai New Area Investment Promotion Bureau. He also served as Vice President of Shenzhen Baoneng Investment Group Co., Ltd. and Director of Zhongju High-tech Industrial (Group) Co., Ltd. The Baoneng-related companies are major shareholders of Qianhai Insurance, making his short tenure and departure open to interpretation.

Such a brief management tenure not only hampers the implementation of long-term strategies but also exposes the fragility of the company’s governance structure. After Cao’s departure, aside from Chairman Huo Jianmei acting as general manager, the core management team was reduced to just six people: Chairman and interim leader Huo Jianmei, Board Secretary Cui Yongcan, General Manager Assistant Wang Shubo, Audit Responsible Person Wang Zhanjun, Compliance and Chief Risk Officer Hu Sheng, and Chief Actuary Nandi.

Beijing PaiPai Insurance Agency Co., Ltd. General Manager Yang Fan told our reporter that frequent management changes are common among small and medium-sized insurance companies, driven by performance pressure, strategic adjustments, and intensified industry competition. On the positive side, management changes can bring new ideas, promote strategic transformation, and signal positive reforms. However, frequent turnover can also cause strategic discontinuity, team instability, and short-termism, potentially affecting long-term stable development.

“Small and medium insurers should establish more scientific governance structures and long-term incentive mechanisms, maintain strategic focus, and appropriately introduce fresh talent to balance stability and innovation,” Yang Fan said.

Operational Difficulties

The ultimate cost of the shareholding crisis and governance disorder is reflected in the company’s operational data.

From the premium income perspective, Qianhai Insurance’s business revenue has shown an overall decline. In its first year of operation in 2016, it achieved 55 million yuan in insurance business income. It grew in subsequent years, reaching 1.024 billion yuan in 2017, 1.542 billion in 2018, and peaking at 2.266 billion in 2019.

However, the good times did not last. Starting in 2020, revenue declined: 2.131 billion yuan in 2020, 1.939 billion in 2021, 1.443 billion in 2022, 1.564 billion in 2023, and 1.525 billion in 2024. In 2025, the downward trend continued, with revenue dropping to 1.087 billion yuan.

In terms of net profit, after a tiny profit of 1 million yuan in 2016, Qianhai Insurance has been in long-term loss. Over nine years from its founding to the end of 2024, cumulative losses totaled 751 million yuan. The loss widened further in 2025, reaching 85 million yuan.

Moreover, its risk comprehensive rating has been downgraded from Category B to Category C since the first quarter of 2022 and has remained there, indicating it is an insolvent insurer.

Cost pressures are also significant. As of the end of 2025, Qianhai Insurance’s combined cost ratio was as high as 232.95%, far above the 100% breakeven line, indicating severe underwriting losses.

Yang Fan believes that facing the long-term pressure of a high combined cost ratio, small and medium-sized property insurers must abandon “scale obsession,” adhere to a “benefit-first” high-quality development principle. Structurally, they should first adjust and improve quality, actively reduce high-claim auto insurance, and leverage regional advantages to deepen rural insurance and specialized non-auto insurance fields.

“In expense management, digital tools should be used to implement lean management throughout the process, strictly control ineffective channel commissions, and reduce fixed operating costs through organizational flattening; in pricing strategies, they must break homogeneous competition, build risk-based precise pricing models using big data actuarial techniques, and implement differentiated underwriting to ensure business quality from the source, fundamentally reversing underwriting losses,” Yang Fan said.

Editor: Feng Yingzi Chief Editor: Zhang Zhiwei