(Yicai) Aug. 23 -- Guosen Securities has become the latest Chinese brokerage to announce plans to acquire a competitor this year.

Guosen will issue new shares to Vanho Securities' shareholder Shenzhen Capital Holdings to acquire its entire 53 percent stake in the target company, the Shenzhen-based buyer said on Aug. 21. More details on the deal will follow later in a formal restructuring report, it said.

Chinese brokerages have unveiled a number of takeovers since the start of the year. Notably, Guolian Securities revealed plans to acquire Minsheng Securities, while Zheshang Securities set out its intention to purchase 34 percent of Guodu Securities to gain control. But most have involved small and mid-sized firms, not big players such as Guosen.

At the end of last year, Guosen had assets of CNY463 billion (USD64.9 billion), ranking 11th among Chinese securities firms. Its net profit and revenue rose 5.6 percent and 9.1 percent to CNY6.4 billion and CNY17.3 billion (USD900 million and USD2.4 billion), respectively, in 2023.

Shenzhen-based Vanho is much smaller. Its assets tallied CNY13.2 billion last year, with a net profit of CNY59 million (USD8.3 million) and revenue of CNY499 million (USD69.84 million).

As a small firm, Vanho’s operations have been unstable in recent years. Last October, the China Securities Regulatory Commission suspended its sponsorship and underwriting business for three months as a result of a high failure rate in the broker’s initial public offering projects.

This may be one of the reasons why the Shenzhen State-owned Assets Supervision and Administration Commission is pushing for Guosen to take it over.

Trading in Guosen's shares [SHE: 002736] has been suspended since yesterday. They closed at CNY9.04 (USD1.27) apiece on Aug. 21. The company's major shareholder is Shenzhen Investment Holdings, with a 33.5 percent stake.

Editors: Dou Shicong, Futura Costaglione