After the Ministry of Finance press conference, the topic of debt resolution quickly ignited the market. As one of the bank IT solution providers, Yuxin Technology became one of the first beneficiaries, which also led to a continuous rise in the company's stock price. Baidu, as the third-largest shareholder of the company, has also benefited significantly from this.
The surging enthusiasm for debt resolution has driven a batch of related enterprises, with Yuxin Technology being one of them.
On October 12th, at the press conference held by the State Council Information Office, the topic of debt resolution by the Minister of Finance, Lan Fo'an, quickly ignited market enthusiasm. Unexpectedly, Yuxin Technology, in the financial IT track, became a "big winner" with a single announcement.
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According to the announcement released by Yuxin Technology, on October 8th, Yuxin Technology and Fujian AMC Company Xiamen Asset Management established a joint venture company, using the company's financial technology attributes to participate in the disposal of non-performing assets. Influenced by this news, the company's stock price soared.
Yuxin Technology's outstanding performance in the secondary market undoubtedly made a lot of money for the company's shareholders, including Baidu, one of its "old partners". Even without considering dividends and the previous cashing out of more than 100 million, the market value of Yuxin Technology's stocks held by Baidu still exceeds the initial investment of 600 million.
Yuxin Technology, which has boarded the "express train" of debt resolution, quickly ignited the market after the weekend's fermentation.
Last Saturday, at the press conference held by the State Council Information Office, Minister of Finance Lan Fo'an introduced the situation related to "increasing the counter-cyclical adjustment strength of fiscal policy and promoting high-quality economic development", which included incremental policies on supporting local governments to resolve government debt risks.
At the meeting, Minister of Finance Lan Fo'an announced a major favorable policy, planning to provide strong support for resolving debt risks by increasing debt limits to replace the implicit debts of local governments.
At the same time, expressions such as "planning to increase a large scale of debt limits to replace the existing implicit debts of local governments" and "the measure with the strongest support for debt resolution in recent years" have also attracted widespread attention.The sudden favorable news also allowed Yu Xin Technology, which happened to start deploying in this field, to catch the "fast train". According to the announcement released by Yu Xin Technology on October 8th, the company signed a strategic cooperation agreement with Xiamen Asset Management on December 20, 2023, aiming at the debt restructuring track.
As a result, Yu Xin Technology has attracted a lot of attention from investors. According to Tonghuashun data, Yu Xin Technology achieved a 20cm daily limit on October 14th, and once reached the daily limit on October 15th. After that, there was a certain degree of decline. As of the close, it reported 25.88 yuan per share, with an increase of 15.38%. So far, Yu Xin Technology has soared by 131.7% in the past 11 trading days.
For Yu Xin Technology, the debt restructuring field is undoubtedly a considerable cake. After sorting out the announcement content, it can be seen that since January 2021, the China Banking and Insurance Regulatory Commission began piloting the transfer of non-performing loans, allowing the transfer of single-house public and individual batch non-performing assets, providing policy support for the transfer and circulation of individual loan non-performing assets.
In December of the following year, the policy was further relaxed, expanding the scope of pilot institutions and increasing market liquidity. Against this background, in 2023, the transaction volume of individual non-performing loan batch transfer business increased significantly, with a substantial increase in the number of listings and transactions, the number of non-performing loan households and transactions involved, the total amount of unpaid principal and interest, and the total transfer price reached 4.644 billion yuan.
By September 2024, the number of institutions participating in non-performing loan transfer business had expanded to 958, including banks, asset management companies, consumer finance companies, auto finance companies, financial leasing companies, and trust companies, among various types of financial institutions.
A series of data after the start of the pilot work have shown that the individual loan non-performing market has gradually shown its huge potential and broad prospects. The number of pilot business institutions and accounts continues to expand, becoming a brand-new market with a scale of over trillion yuan, hiding opportunities.
In order to further capture market demand, Yu Xin Technology chooses to help individual loan non-performing asset disposal business market with technology services. It plans to participate in the transfer, revitalization, and resolution of individual loan non-performing asset disposal business processes through the integration of multiple technologies such as artificial intelligence, big data, and cloud platforms, as well as related products and businesses.
Baidu, which has been behind the scenes for more than four years after investing in Yu Xin Technology, has enjoyed the狂欢 of this stock price surge.
On January 7, 2020, Yu Xin Technology announced that it had obtained strategic investment from Baidu. At that time, both parties stated that they would cooperate in key areas such as financial cloud, big data, artificial intelligence, and blockchain, promote the large-scale landing of cloud + AI in the financial industry, and accelerate the intelligent upgrade of the financial industry.According to the content of the "Share Purchase Agreement" signed by Yuan Chuang Gene, Guang Kong Gene, and other related parties, Baidu acquired 15,410,227 shares held by Yuan Chuang Gene and 7,446,915 shares held by Guang Kong Gene for a price of 600 million yuan, which is a total of 22,857,142 shares of the listed company, accounting for 5.71% of the total share capital of the company.
Due to the distribution plan launched by Yu Xin Technology in 2021, which was to distribute 2.7 yuan for every 10 shares and then transfer an additional 10 shares, Baidu's shareholdings increased to 36.5714 million shares, thus reducing its holding cost.
In November 2022, Baidu reduced its shareholding in Yu Xin Technology by 1,016,900 shares (accounting for 0.14301% of the total share capital of the company) through block trading. According to the disclosed information, the average price of the reduction was 16.2 yuan per share, successfully cashing out approximately 16.47 million yuan.
From February 6, 2023, to February 10, 2023, Baidu further reduced its shareholding in the company by 6,094,100 shares (accounting for 0.8570% of the total share capital of the company) through block trading.
Specifically, Baidu reduced its holdings by selling 2 million shares at 16.74 yuan per share, 2.5 million shares at 17.61 yuan per share, 1 million shares at 17.47 yuan per share, and 594,000 shares at 16.97 yuan per share, totaling approximately 105 million yuan in cash.
In addition, from 2020 to 2024, Yu Xin Technology distributes dividends once a year, with the distribution plans being 1.5 yuan for every 10 shares, 2.7 yuan for every 10 shares, 2 yuan for every 10 shares, 1.4 yuan for every 10 shares, and 2 yuan for every 10 shares.
By combining the dividends with the shares Baidu held during each period, a simple calculation shows that Baidu benefited by 3.43 million yuan, 6.17 million yuan, 7.31 million yuan, 3.58 million yuan, and 5.12 million yuan, respectively, totaling 25.61 million yuan.
This means that, to date, Baidu has made a profit of over 140 million yuan through dividends and cashing out. As of now, Baidu still holds 25.6 million shares of Yu Xin Technology, making it the third-largest shareholder of the company, accounting for 3.64% of the total share capital.
Based on the closing price of Yu Xin Technology's shares at 25.88 yuan per share on October 15, the value of the shares of Yu Xin Technology that Baidu still holds is approximately 663 million yuan, exceeding its initial investment amount.
In fact, the cooperation between Baidu and Yu Xin Technology goes beyond this. In 2023, Yu Xin Technology became one of the first ecological partners of Baidu's Wenxin Yiyan, having priority access to internal testing and integration of the full capabilities of "Wenxin Yiyan," and working together with Baidu to create the first application of "Wenxin Yiyan" in financial business scenarios.For Yuxin Technology, Baidu is not only one of the shareholders but also an important partner. At the same time, under the layout of Yuxin Technology's founder, Hong Weidong, the company is moving towards a more diversified direction.
Hong Weidong's Diversified Layout
Yuxin Technology began its diversified layout early on.
In 1990, at the age of 24, Hong Weidong graduated from the Department of Automation at Tsinghua University and worked at Secom (China) Co., Ltd. for several years. Until 1999, Hong Weidong decided to give up his stable job and good salary to start his own financial IT service company. In 1999, he founded Beijing Yuxin Hongtai Technology Development Co., Ltd. (the predecessor of Yuxin Technology) and served as CEO.
Public information shows that Yuxin Technology has gradually developed from a hardware system supplier in the early stages of entrepreneurship to a comprehensive financial IT service provider, providing the banking industry with comprehensive financial products and solutions, and at the same time possessing consulting, implementation, and maintenance comprehensive capabilities of IT in-depth service providers. It has now become one of the largest financial technology solution market leaders in the country.
Yuxin Technology became the first Chinese financial technology company to go public on NASDAQ in March 2007. Although it was later privatized and delisted, in 2018, Hong Weidong successfully led the company to list on the A-share GEM.
It is worth mentioning that the company has successively acquired several high-quality enterprises through joint ventures and controlling stakes. In 2008, it established a joint venture with 3i Infotech Group, one of the four major software companies in India, taking a step towards international development, and has become a strategic partner with Huawei, IBM, HP, Oracle, and other internationally renowned companies.
Hong Weidong, who has grown Yuxin Technology from scratch, naturally understands the essentials of enterprise development. Therefore, while deepening cooperation with Baidu, the company has also signed a Hongmeng ecosystem cooperation agreement with Huawei. The two parties focus on the development of native applications in financial business scenarios for HarmonyOS NEXT, compatibility adaptation, ecosystem cooperation, market expansion, and other aspects to carry out comprehensive and in-depth cooperation. At present, the company is not only an ecological market service provider of the Huawei Developer Alliance but also one of the first batch of Hongmeng development service providers.
At the same time, thanks to Hong Weidong's diversified layout, in the research and development of LLM large model applications, the company has completed the docking of various large model products in 24H1 and built a large model capability platform. On this basis, it has completed the research and development of an intelligent Q&A platform from 0 to 1 and began to deeply integrate with various business scenarios such as employee assistants and seat assistants in the financial industry.
In addition, the recently popular cross-border payment is also one of the fields of Yuxin Technology's layout. The company's products and businesses participate in the CIPS system, and there have been relevant cases and experience in the past few years. It has successfully supported many commercial banks and related financial institutions to access the front-end of the CIPS system and the business logic processing templates within commercial banks.As Hong Weidong's diversified layout unfolds, the company's performance may be further enhanced.