On August 9, Huaxia Happiness Industrial Co., Ltd. (Huaxia Happiness) announced that its major shareholder, China Ping An Life Insurance Co., Ltd. (Ping An Life), plans to reduce its holdings by no more than 1.1741161 billion shares. Compared to the price at which Ping An Life purchased the shares, the stock price of Huaxia Happiness has declined by more than 90%.
In its announcement of the “Shareholding Reduction Plan by Shareholders Holding More than 5%” on August 9, Huaxia Happiness stated that its largest shareholder, Ping An Life and its concerted action person Ping An Asset Management Program, intend to reduce their holdings by no more than 1.1741161 billion shares within 3 months after 15 trading days from the disclosure date of this announcement, from September 1 to November 30, accounting for no more than 3% of the total share capital of the company. The reduction will be conducted through block trades and competitive auctions.
The announcement also stated, “If there are changes in Huaxia Happiness’s shares during the reduction plan period, such as bonus shares, capital reserves transferred to share capital, rights issues, and repurchase cancellations, the above-mentioned reduction amount of shares will be adjusted accordingly. The price range of the planned reduction of shares will be determined based on the market price.”
Currently, Ping An Life holds 25.144% of Huaxia Happiness shares, while Ping An Asset Management holds 0.0421%, totaling 25.1865%, making them the largest shareholder of Huaxia Happiness.
According to a report from Financial Technology Online on August 10, when Ping An Life purchased Huaxia Happiness at over 20 RMB per share, the current stock price of Huaxia Happiness is only a little over 2 RMB, a decrease of more than 90%.
Established in 1998, Huaxia Happiness Industrial Co., Ltd. is a leading service provider in China’s emerging industry.
In 2019, Huaxia Happiness had a net profit of 14.6 billion RMB, but it decreased to 3.665 billion RMB in 2020 and incurred a loss of 39 billion RMB in 2021. Although it made a profit of 1.588 billion RMB in 2022, it again incurred losses of 6.028 billion RMB and 4.817 billion RMB in 2023 and 2024 respectively.
Huaxia Happiness’s losses directly impacted Ping An Life’s performance as well. In the first half of 2021, China Ping An made a provision of 35.9 billion RMB for impairment. In 2024, Ping An’s third-quarter solvency report for pension revealed a loss of 4.951 billion RMB, mainly due to the recognition of losses from Huaxia Happiness. As of the end of 2024, China Ping An’s accumulated risk exposure to Huaxia Happiness was approximately 54 billion RMB, with an impairment provision of around 43.2 billion RMB, leaving a residual exposure of about 10.8 billion RMB.
As of 10:30:00 Beijing time on August 11, the stock price of Huaxia Happiness was reported as 2.18 RMB per share, with a total market value of 8.532 billion RMB.