New Era Trust Equity Fourth Auction Transfer Reserve Price Reduced by Additional 20%

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Source: Economic Information Daily

From being an “invincible golden body” to a “hot potato,” the valuation of trust licenses continues to shrink. On March 18, the fourth listing transfer deadline for New Era Trust Co., Ltd. (referred to as “New Era Trust”), expired. Currently, the transfer base price has been repeatedly lowered, but market response remains cold. Industry experts point out that the trust industry is at a critical transformation stage, and relying solely on license arbitrage is no longer sustainable. The overall valuation of trust company equity has significantly declined, and the trend of discounted transfers may continue in the short term.

After failing to find suitable buyers in the previous listing, the transfer of 6 billion shares (100% equity) of New Era Trust was relisted on the Beijing Equity Exchange, with disclosure from February 13 to March 18, 2026. This is the company’s fourth listing transfer, with a base price set at 1.481 billion yuan, an 80% discount from the previous listing price, and only 64% of the initial listing price from over three years ago.

According to the announcement, New Era Trust was established in February 2004, with a registered capital of 6 billion yuan, and is located in Baotou, Inner Mongolia. The transfer involves the equity of New Era Vision (Beijing) Investment Co., Ltd., Shanghai Ren Guang Industrial Development Co., Ltd., Weifang Kewei Investment Co., Ltd., and Baotou Xinding Sheng Trading Co., Ltd. The equity structure shows that the four investors hold 58.54%, 24.39%, 14.63%, and 2.44%, respectively.

According to transfer information posted by the Beijing Stock Exchange, the change of ownership and actual controller, as well as the approval of qualified shareholders, must be approved by the State Financial Supervision and Administration Bureau and other authorities. The project accepts joint bidders, with no more than five members in the consortium. After one member acquires the shares, they must become the controlling shareholder of the target company. Interested parties should fully understand the transfer target and submit their application during the announcement period, along with a deposit of 44.43 million yuan, representing 30% of the transaction amount, to a designated bank account.

The transfer conditions include: the acquirer must fully understand the functions, core business, and risk characteristics of trust companies, as well as the responsibilities and obligations of shareholders, to further strengthen New Era Trust’s capital strength and ensure stable development and ongoing operations; the source of funds for the acquirer must be self-owned or other approved sources, and not borrowed or entrusted funds; after the transfer, the employment relationship with existing staff remains unchanged, and the acquirer commits to safeguarding the legitimate rights and benefits of current employees; and after the transfer, the acquirer agrees to cooperate with regulatory authorities and facilitate the company’s risk disposal work.

Industry experts believe that the continuous devaluation of New Era Trust’s equity is driven both by internal mismanagement and external industry transformation. Due to illegal operations, many products under New Era Trust have experienced widespread overdue payments. On July 17, 2020, the China Banking and Insurance Regulatory Commission (CBIRC) decided to take over the company, with the takeover lasting from July 17, 2020, to July 16, 2021. During this period, the shareholders’ meeting, board of directors, and supervisory board ceased to perform their duties, with all functions taken over by the takeover team, whose leader acts as the legal representative. On July 16, 2021, CBIRC extended the takeover for another year, until July 16, 2022.

During the takeover, New Era Trust announced a plan to resolve individual investors’ principal. As of June 2022, the company’s official website showed that New Era Trust would acquire the trust beneficiaries’ rights, offering four different prices based on principal size: below 3 million yuan (excluding), at 80%; between 3 million and 6 million yuan (excluding), at 70%; between 6 million and 10 million yuan (excluding), at 60%; and 10 million yuan and above, at 50%.

In fact, this is not the first time New Era Trust’s 100% equity has been listed for transfer. In September 2022, the company’s 6 billion shares were relisted on the Beijing Equity Exchange with a base price of 2.314 billion yuan. “Trust licenses used to be ‘hard currency,’ with a single license worth hundreds of millions or even over a billion yuan. Now, they’ve fallen to just over ten billion yuan,” lamented an industry insider. He added that the old model of arbitrage through licenses has completely failed. Today, trust institutions must rely on their investment research, risk control, compliance, and technological capabilities to stand firm in trust services, asset management, and wealth management. Without real skills, even with a license, firms cannot make money and may even lose money faster.

After checking data from the Beijing and Shanghai Equity Exchanges, it was found that several trust companies, including China Trust, Western Trust, and China Overseas Trust, have also been seeking buyers for their equity. However, some trust companies’ equity targets have received little market response, with multiple transfers, postponements, or price reductions. Western Trust’s equity, for example, has been relisted four times.

“The cold market for trust equity transfers has become the norm. Under current market conditions, many listed financial institutions’ stock prices have fallen below their net asset value,” said Yu Zhi, a researcher at the Yonyou Financial Trust Research Institute. He noted that the trust industry is at a critical stage of business transformation, with most trust companies under significant performance pressure and ongoing exposure of industry risks, leading to a decline in overall valuation. This impact is especially pronounced for minority shareholders. In the short term, this trend is unlikely to reverse, and the transfer of trust equity by minority shareholders may continue.