A 2-trillion-yuan city commercial bank still hasn't completed its A-share listing guidance period!

Recently, Huishang Bank (03698.HK) announced its latest A-share listing guidance report. During the most recent guidance period (April-June 2025), the guidance institutions identified that Huishang Bank still faces three major issues: corporate governance problems, major shareholder equity disputes, and employee shareholding that violates regulatory requirements. The bank requires continued guidance.

Huishang Bank is a Hong Kong-listed city commercial bank that has long planned an "A+H" listing strategy. After initially shelving its A-share listing plan, the bank restarted the process in 2019, appointing CITIC Securities and Guoyuan Securities as guidance institutions. The two securities firms have provided guidance for six years.

Over these six years, Huishang Bank has achieved rapid growth in scale and performance, with total assets exceeding the 2-trillion-yuan mark. However, the A-share listing has yet to materialize, as the bank remains in the guidance period.

Shortly before Huishang Bank announced its latest listing guidance report, Chairman Yan Chen resigned due to work transfer. President Kong Qinglong temporarily assumes the responsibilities of Strategic Committee Chairman, while non-executive director Lu Hao temporarily serves as Risk Committee Chairman.

Chairman Yan Chen's departure means Huishang Bank will welcome a new chairman, and the responsibility for A-share listing will fall to the new leadership.

When will Huishang Bank complete its listing guidance, and can it achieve A-share listing?

**Three Major Issues Persist** **Nearly Six Years Without Completing Guidance Period**

Huishang Bank has long planned its A-share listing.

In 2011, Huishang Bank first proposed an A-share listing plan, which didn't succeed. Two years later in 2013, the bank successfully listed on the Hong Kong Stock Exchange, becoming a Hong Kong-listed mainland city commercial bank.

After its successful Hong Kong listing, Huishang Bank continuously sought A-share listing. In 2015, the bank first submitted its A-share prospectus and joined the queue. During the waiting period, Huishang Bank experienced multiple processes including suspension and resumption of review. However, it ultimately chose to withdraw its application.

In February 2018, Huishang Bank announced the withdrawal of its A-share listing application, stating that regulatory authorities required further consultation with individual directors and shareholders on certain matters involved, leading to the decision to withdraw the A-share listing application.

However, after 10 months, on December 30, 2018, Huishang Bank announced that since the company was already listed on the Hong Kong Stock Exchange, it decided to restart its A-share listing to improve corporate governance structure and create a multi-channel financing platform.

In September 2019, Huishang Bank signed guidance agreements with CITIC Securities and Guoyuan Securities, officially beginning A-share listing guidance. As of the latest guidance report release, Huishang Bank's guidance period has lasted nearly six years.

In Huishang Bank's latest A-share listing guidance report, the guidance institutions identified three issues: corporate governance, shareholder equity disputes, and employee shareholding violations.

Regarding corporate governance, the guidance report mentioned that Huishang Bank's fourth board of directors expired in January 2021, and the fourth supervisory board expired in December 2021, with some members serving beyond the three-year term limit.

The guidance institutions stated that this issue remains unresolved, and they are urging Huishang Bank to complete the board renewal process as soon as possible.

Concerning shareholder equity disputes, this has been a long-standing concern for Huishang Bank.

The latest guidance report mentioned that the equity dispute between Zhongjing Xinhua Asset Management Co., Ltd. ("Zhongjing Xinhua") and Shanshan Holdings Co., Ltd. ("Shanshan Holdings") could potentially impact the bank's A-share issuance.

The specific equity dispute involves: Zhongjing Xinhua and Shanshan Holdings signed an asset transfer framework agreement on August 20, 2019. Zhongjing Xinhua agreed to transfer its 224,781,227 domestic shares in Huishang Bank; 51.6524% equity in Zhongjing Sihai Industrial Co., Ltd.; and a total of 1,245,864,400 H-shares held by Zhongjing Xinhua's overseas subsidiaries to Shanshan Holdings, with a total transfer price of 12.15 billion yuan.

Regarding the transfer of 51.6524% equity in Zhongjing Sihai Industrial Co., Ltd., Shanshan Holdings designated Shanshan Group as the recipient and signed agreements with Zhongjing Sihai Industrial Co., Ltd.

During the transfer process, both parties disputed equity delivery and payment arrangements, leading Shanshan Holdings and Zhongjing Xinhua to file lawsuits around June 2020.

After first and second instance court proceedings, in March 2024, Zhongjing Xinhua applied for retrial to the Third Circuit Court of the Supreme People's Court. As of the guidance report date, the Supreme People's Court was still reviewing the case.

Zhongjing Xinhua is Huishang Bank's second-largest shareholder. According to the 2024 annual report, Zhongjing Xinhua and its controlled Zhongjing Sihai Industrial Co., Ltd. collectively hold 14.23% of Huishang Bank's shares.

According to the IPO registration management measures and related requirements issued by the China Securities Regulatory Commission, A-share issuers must have clear equity ownership. The unresolved equity transfer dispute between the major shareholder and Shanshan Holdings continues to impact Huishang Bank's A-share listing.

During the equity transfer dispute between Zhongjing Xinhua and Shanshan Holdings, Huishang Bank has extended its A-share issuance plan and authorization proposals by one year at each annual shareholders' meeting. In June 2025, at the 2024 annual shareholders' meeting, Huishang Bank again approved the extension of its A-share issuance plan and authorization proposals.

Finally, regarding employee shareholding violations, the latest guidance report mentioned that Huishang Bank has individual employees holding more than 500,000 shares, violating the "Notice on Regulating Internal Employee Shareholding in Financial Enterprises" issued by the Ministry of Finance, People's Bank of China, Banking Regulatory Commission, Securities Regulatory Commission, and Insurance Regulatory Commission.

The guidance institutions stated they are actively negotiating with shareholders to reduce holdings below 500,000 shares.

Overall, Huishang Bank faces three major issues, particularly shareholder equity disputes, which have become obstacles to A-share listing. However, Huishang Bank appears unwilling to give up, continuously extending its A-share listing issuance plans.

What gives Huishang Bank this confidence?

**Scale Exceeds 2 Trillion Yuan** **"Hero" Yan Chen Resigns as Chairman**

Huishang Bank's confidence may stem from its overall stable business development in recent years.

Reviewing Huishang Bank's financial reports over the past five years shows continuous expansion of total assets, exceeding the 2-trillion-yuan mark. Despite narrowing interest margins, Huishang Bank's revenue and net profit attributable to shareholders have grown consecutively, while asset quality has remained generally stable with declining non-performing loan ratios.

Specifically, from 2020 to 2024, Huishang Bank's total assets grew from 1.27 trillion yuan to 2.01 trillion yuan, an increase of over 740 billion yuan. In 2024, Huishang Bank's total asset growth rate reached 11.05%; total liabilities grew from 1.17 trillion yuan to 1.85 trillion yuan, an increase of over 680 billion yuan; total loans and advances grew from 570 billion yuan to 1 trillion yuan, an increase of over 430 billion yuan.

In terms of revenue, from 2020 to 2024, Huishang Bank's revenue grew from 32.29 billion yuan to 37.128 billion yuan; net profit attributable to shareholders grew from 9.57 billion yuan to 15.414 billion yuan.

However, while Huishang Bank maintained stable and continuous performance growth, growth rates have significantly declined. From 2020 to 2024, Huishang Bank's revenue growth rate rose from 3.63% to 9.98% before falling to 2.10% in 2024; net profit growth rate also rose from negative growth to 19.75% before declining to 6.80% in 2024.

Regarding asset quality, from 2020 to 2024, Huishang Bank's non-performing loan ratio continuously declined from 1.98% to 0.99%, a decrease of 0.99 percentage points, representing a 50% reduction.

Huishang Bank's overall stable operations over the past five years and its achievement of expanding scale beyond 2 trillion yuan cannot be separated from former Chairman Yan Chen's management.

Yan Chen has extensive professional experience, having worked at policy banks and served many years in Anhui Provincial Government. In 2021, Yan Chen was appointed Party Secretary and Chairman of Huishang Bank.

According to media reports, Yan Chen's personal experience includes extensive training and understanding in supporting technology innovation enterprises and private economy development. From an institutional perspective, his extensive network relationships have greatly benefited this market-oriented financial institution.

After Yan Chen assumed the chairmanship, Huishang Bank increased investment in financial technology development and actively expanded beyond its regional base. In recent years, Huishang Bank's branch network has extended to the Yangtze River Delta region and the Guangdong-Hong Kong-Macao Greater Bay Area.

Under Yan Chen's management, Huishang Bank gradually emerged from negative publicity "shadows" and achieved rapid development. By the end of 2024, Huishang Bank's total assets reached 2 trillion yuan.

However, on July 31, 2025, Huishang Bank announced that due to work transfer, Yan Chen resigned from his positions as chairman and executive director. This marks the end of Yan Chen's career at Huishang Bank.

Now, with this "hero" departing, Huishang Bank will welcome a new chairman. The important task of Huishang Bank's A-share listing will become the new chairman's responsibility.

After Yan Chen's resignation, whether Huishang Bank can maintain stable growth, when it will complete the guidance period, and whether it can achieve A-share listing remain areas of continued attention.