Re-emergence of insurance capital's "shareholding"! Lian Life Insurance plans to acquire a 5% stake in Zhongshan Public at nearly a 10% premium, increasing its shareholding ratio to 8.12%.

On the evening of April 2, Zhongshan Public Utilities (SZ000685, share price 10.87 yuan, market cap 16.03 billion yuan) announced that its controlling shareholder, Zhongshan Investment Holding Group Co., Ltd. (hereinafter referred to as “Zhongshan Investment Holding”), and Lian’an Life Insurance Co., Ltd. (hereinafter referred to as “Lian’an Life”) signed a “Share Transfer Agreement” on April 1.

Zhongshan Investment Holding plans to transfer about 73.7556 million shares it holds in the company at a price of 12.19 yuan per share (representing 5% of the company’s current total share capital), for a total consideration of approximately 899 million yuan.

According to the announcement, after this change in rights and interests, Zhongshan Investment Holding’s shareholding proportion will decrease to 43.73%, still remaining the controlling shareholder. Lian’an Life’s shareholding proportion will increase to 8.12%, becoming a shareholder holding more than 5%. This agreement-based share transfer does not trigger a tender offer, does not constitute a related-party transaction, will not result in any change to the company’s controlling shareholder or actual controller, and will not have an impact on the company’s corporate governance structure or ongoing operations. At the same time, there is no situation that would damage the interests of the company or its minority investors. However, it still requires approval by the state-owned assets regulatory authorities and review by the Shenzhen Stock Exchange before implementation.

A premium of nearly 10% for the buyer

The announcement shows that Zhongshan Investment Holding plans to transfer, through a publicly solicited transfer process, about 73.7556 million shares it holds in the company, accounting for 5% of the company’s current total share capital. After综合评审 by Zhongshan Investment Holding, Lian’an Life was determined to be the final transferee.

According to the announcement, at a price of 12.19 yuan per share, Zhongshan Investment Holding will transfer to Lian’an Life the company’s approximately 73.7556 million shares it holds, representing unrestricted tradable shares. As of April 2, the aforementioned shares have not yet completed the transfer procedures. The transfer price of 12.19 yuan per share, compared with the closing price of 11.12 yuan per share on the signing date of Zhongshan Public Utilities’ “Share Transfer Agreement” (April 1), represents a premium of about 9.62%.

The announcement states that Lian’an Life was established on July 14, 2011, with Jiangsu International Trust Co., Ltd. holding 22.7857%. According to the announcement, in 2024, Lian’an Life’s audited revenue was 29.77B yuan and its net profit was 47.65 million yuan; in 2025, its unaudited revenue was 31.73B yuan and its net profit was 185 million yuan.

Zhongshan Public Utilities’ announcement mentions that, for the benefit of the company’s sustainable and stable development, the transferee has committed that within 12 months after the completion of the transfer of the shares under this agreement, it will not reduce its holdings of the target shares it receives. At the same time, to optimize the listed company’s corporate governance structure and leverage the advantages of long-term value investment by insurance shareholders, after the completion of the share transfer, the transferee intends to appoint one non-independent director to the company.

Lian’an Life has made frequent moves in A-share and Hong Kong stock markets in recent years

Regarding the impact of this equity transfer on the listed company, Zhongshan Public Utilities said that, if completed successfully, it will facilitate adjustments to the company’s shareholding structure and enhance the company’s core competitiveness. This agreement-based share transfer does not trigger a tender offer, does not constitute a related-party transaction. This change in rights and interests will not lead to any change in the controlling shareholder or the actual controller of the listed company, will not have a major impact on the company’s ongoing operations, and does not involve any situation that would damage the interests of the listed company and other shareholders.

Zhongshan Public Utilities also disclosed that the agreement-based share transfer still needs to obtain approval from the state-owned assets supervision and administration institution and other relevant government departments, and pass compliance review by the Shenzhen Stock Exchange. Only after that can the share transfer registration procedures be handled at the Shenzhen Branch of China Securities Depository and Clearing Co., Ltd. Whether the approval from the relevant state-owned assets supervision and administration institution can be obtained next, and whether the implementation of this publicly solicited transfer can be completed, are both subject to uncertainty.

A reporter with The Economic Daily News noted that in recent years, Lian’an Life has made frequent moves in A-share and Hong Kong stock markets. From 2024 to 2025, Lian’an Life had successively taken stakes in Jiangnan Water (SH601199) and Shenzhen International (HK00152). At the same time, it also holds stocks such as Wuxi Bank (SH600908) and Changshu Bank (SH601128). Lian’an Life’s shareholding preference is clear: it tends to focus on sectors such as public utilities, transportation, and city commercial banks.

However, it should be noted that although Zhongshan Public Utilities’ total market value is currently only around 16 billion yuan, the largest “hidden asset” in its asset portfolio is its holding of Guangfa Securities shares. According to Guangfa Securities’ 2025 annual report, as of the end of 2025, Zhongshan Public Utilities held 687 million shares of Guangfa Securities, accounting for 9.03% of Guangfa Securities’ total share capital. Based on Guangfa Securities’ closing price of 17.99 yuan per share on April 2, the market value of the Guangfa Securities shares currently held by Zhongshan Public Utilities is 12.36B yuan.

The Economic Daily News