(Yicai Global) Dec. 5 -- Huaxi Securities Ltd. (WCS) unveiled its initial public offering prospectus early last month, though outstanding issues related to equity ownership disputes and its overreliance on brokerage services could hinder plans to list on the A-share market, industry insiders said.
The company, headquartered in Chengdu, capital of China’s western Sichuan province, has undertaken complex equity ownership changes, with some disputes remaining outstanding. Actual controllers of some companies in which Huaxi has invested remain out of contact, and many people have lost confidence in the firm.
Jiang Chaoming, chair of Sichuan Xinli Investment Co., which was forced to give up large quantities of shares in Huaxi Securities due to debt, still serves as a director of Huaxi Securities. Jiang transferred some Huaxi asset management products to Xinli Investment, while major shareholdings have also been moved to China Railway Trust Co. and China Minsheng Banking Corp. [SHA:600016;HKG:1988].
Another obstacle to the firm’s listing is its heavy reliance on its brokerage services business, which made up more than half of total annual revenue last year despite sluggish trading. It faces increased challenges in the sector related to price wars and intensive competition amid the increased presence of joint-venture securities traders.