Another brokerage firm raises 6 billion yuan through a private placement: the first securities industry deal after the new refinancing policy. What are the key points of interest?

Southwest Securities disclosed a 6 billion yuan private placement plan on February 13, becoming the first listed securities firm to announce a large-scale private placement after the Shanghai, Shenzhen, and Beijing stock exchanges launched a package of measures to optimize refinancing on February 9.

This private placement is not only an important capital deployment during Southwest Securities’ industry transformation but also a significant progress following the industry’s breakthrough in private placements since 2025. It shows that, against the backdrop of new policies and intensified competition in the securities industry, there is an urgent need for securities firms to supplement capital and strengthen their core businesses.

Since 2025, Tianfeng Securities, Zhongtai Securities, and Nanjing Securities have successively completed large-scale private placements. Southwest Securities announced its plan just four days after the new policies were released. The fundraising will focus on seven core areas: securities investment, asset management, wealth management, among others. If successfully issued, it will support the company’s regional strategies and enhance industry competitiveness.

According to Southwest Securities’ private placement plan, the number of shares issued to specific targets will not exceed 30% of the total share capital before issuance, or no more than 1.994 billion shares, with a maximum total fund-raising amount of 6 billion yuan. The details are as follows:

1. Specific use of raised funds across seven major business sectors:
From the allocation perspective, securities investment and debt repayment are the key areas, while also supporting business expansion and risk control.

• Wealth management: no more than 500 million yuan
• Investment banking: no more than 250 million yuan
• Asset management: no more than 900 million yuan
• Securities investment: no more than 1.5 billion yuan
• Subordinate company investments: no more than 600 million yuan
• Information technology and compliance risk management: no more than 750 million yuan
• Debt repayment and working capital supplementation: no more than 1.5 billion yuan

2. Target investors:
The private placement will involve no more than 35 investors. Yufu Holdings and its concerted parties, Chongqing Water Environment Group, as state-owned background entities, have committed to subscribing, with planned subscriptions of 1.5 billion yuan and 1 billion yuan respectively, totaling 2.5 billion yuan. The plan shows that Yufu Holdings is the wholly owned parent company of Southwest Securities’ controlling shareholder, Yufu Capital, and Chongqing Water Environment Group is a subsidiary controlled by Yufu Holdings.

3. Pricing mechanism:
The pricing date will be the first day of the issuance period. The issuance price will not be lower than 80% of the average trading price of the company’s stock over the 20 trading days prior to the pricing date, or the higher of that and the most recent audited net asset value per share before issuance.

4. Lock-up periods:
Yufu Holdings and Chongqing Water Environment Group will have a lock-up period of 60 months. other investors holding more than 5% will have a lock-up period of 36 months, and those holding less than 5% will be 6 months.

After this private placement, Southwest Securities’ controlling shareholder will remain Yufu Capital, and the actual controller will still be the State-owned Assets Supervision and Administration Commission of Chongqing Municipality. The company’s control rights will not change. The plan has been approved by the 23rd meeting of the 10th Board of Directors, but it still requires approval from the state-owned asset management authorities, shareholders’ approval, review and approval by the Shanghai Stock Exchange, and registration approval from the China Securities Regulatory Commission before implementation.

Why launch this private placement?

It is worth noting that Southwest Securities has had three private placements in its history. The most recent was in 2020, raising 4.9 billion yuan, all used to replenish capital, and fully utilized by December 31, 2023, effectively supporting the company’s steady development across various businesses. The current plan marks an important strategic move during the industry’s critical transformation period.

Southwest Securities explains that the private placement is necessary in four aspects:

First, to enhance the ability to serve the real economy. As a core hub connecting the real economy and capital markets, the company needs to rely on capital to improve comprehensive service capabilities, better serve direct financing, act as a “gatekeeper” of the capital market, and manage social wealth. It aims to deepen its presence in Chongqing, integrate into the Chengdu-Chongqing economic circle, the Western Financial Center, and other national and regional strategic initiatives, supporting local state-owned enterprises’ reform, industrial upgrading, and technological innovation, transforming social savings into long-term capital supporting the real economy.

Second, to improve industry competitiveness. With increasing industry concentration, the entry of foreign institutions, and a shift from traditional commission-based profit models to integrated models emphasizing investment trading and financial technology, the industry faces higher capital requirements, especially under the full registration system, which promotes innovative businesses like co-investment and market-making. Private placement capital support can help expand core businesses such as wealth management, investment banking, and asset management, increase subsidiary investments, and strengthen fintech and compliance risk management, optimize debt structure, and build a diversified, collaborative business pattern to adapt to industry changes and consolidate market position.

Third, to strengthen risk resistance and compliance management. As a capital-intensive industry, securities firms are subject to regulatory requirements centered on net capital and liquidity. Raising additional capital can improve net capital levels and liquidity management, continuously meet regulatory standards, effectively prevent market, credit, and liquidity risks, optimize capital structure, reduce operational risks, and support sustainable, high-quality development.

Fourth, to ensure the implementation of strategic goals. As the only registered comprehensive securities firm in Chongqing and a key state-owned enterprise, Southwest Securities has set development goals of “leading in the West, advancing nationwide, and increasing Chongqing’s recognition.” It aims to build first-class regional,特色, and boutique investment banks. Capital replenishment can address capital constraints, enhance operational resilience, and provide solid financial support for differentiated and特色 development.

First Major Private Placement Post-Reform Policies in the Securities Industry

Statistics show that since 2025, the private placement market for securities firms has significantly broken new ground, with Tianfeng Securities, Zhongtai Securities, and Nanjing Securities completing large-scale placements. Dongwu Securities, Southwest Securities, and others are at different stages of progress, while some projects like the Compass project have been terminated.

In terms of approval efficiency, projects that have been completed generally see a shortened acceptance-to-registration cycle of 3–5.5 months, with Tianfeng Securities setting a record of about 3 months. Funding sources are mainly large state-owned shareholders, with lock-up periods of five years, and institutional subscriptions are enthusiastic, with high fund-raising completion rates.

• Tianfeng Securities: raised 4 billion yuan, accepted by SSE in March 2025, approved on May 9, registered on June 6, completed issuance on June 23, with a cycle of about 3 months. The entire process was fully subscribed by its controlling shareholder, Hongtai Group, which also locked in for five years.

• Zhongtai Securities: raised 6 billion yuan, accepted on May 28, 2025, approved on September 5, registered on September 15, and approved on October 13. The issuance was completed on November 25, with its controlling shareholder, Zao Mining Group, subscribing heavily and locking in for five years. Institutional investors also participated actively.

• Nanjing Securities: raised 5 billion yuan, accepted on May 16, 2025, approved on September 29, registered on November 3, and completed issuance in December. Nanjing State-owned assets participated in the subscription, with funds allocated to wealth management, investment banking, and IT development.

• Dongwu Securities: raised 6 billion yuan, disclosed the plan on July 18, 2025, with the controlling shareholder, Suzhou Guofa Group, and its concerted parties participating. Funds are intended for subsidiary capital increases, IT, compliance, and wealth management.

• Southwest Securities: raised 6 billion yuan, announced the plan on the evening of February 13, 2026. Yufu Holdings and Chongqing Water Environment Group plan to subscribe a total of 2.5 billion yuan, for capital replenishment and core business investment. The project is currently at the board approval stage, pending review.

• Compass: originally planned to raise no more than 2.905 billion yuan to increase capital for Maigao Securities. The project has been delayed over three years, was under review by the Shenzhen Stock Exchange in 2025 with multiple revisions, and was officially terminated on October 31, 2025, with the application withdrawn in November.

It is noteworthy that Southwest Securities’ private placement plan coincides with the implementation of the 2026 new refinancing policies for A-shares, marking the first large-scale private placement in the industry after the reform. On February 9, the Shanghai, Shenzhen, and Beijing exchanges simultaneously released a package of refinancing optimization measures, focusing on supporting high-quality enterprises and technological innovation, relaxing restrictions on financing for sci-tech and high-quality firms, while strengthening supervision over “bona fide” applications and fund use.

Southwest Securities’ quick response within four days of the new policy release reflects both the urgency of capital replenishment and compliance with regulatory guidance. Industry insiders note that the new rules explicitly require disclosure of previous fundraising use, and have raised standards for reporting progress, further relaxing market practices and opening broader space for industry capital support and market timing.

The company’s planned fund-raising of up to 6 billion yuan will be allocated to core businesses such as wealth management, investment banking, asset management, securities investment, subsidiary development, fintech, compliance, and debt repayment—aligning with the regulatory focus on core business development and quality improvement.

Market analysts believe that as the new refinancing policies take effect, high-quality securities firms with good governance, prominent core businesses, and reasonable capital needs will more easily gain regulatory support and market recognition. The pace of capital replenishment in the industry is expected to accelerate, further strengthening the capital strength and profitability resilience of the securities sector.

(Article source: Cailian Press)