New Era Trust Equity Fourth Auction - Transfer Floor Price Further Reduced by 20%

From “Unbreakable” to “Hot Potato,” the valuation of trust licenses continues to “shrink.” On March 18, the fourth listing of shares for New Era Trust Co., Ltd. (referred to as “New Era Trust”), expired. Currently, the minimum transfer price has been repeatedly lowered, but market response remains tepid. Industry experts point out that the trust industry is at a critical transformation stage, and relying solely on license arbitrage models is no longer sustainable. The overall valuation of trust companies’ 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, New Era Trust’s 6 billion shares (representing 100% ownership) were again listed on the Beijing Equity Exchange. The disclosure period is from February 13 to March 18, 2026. This is the company’s fourth listing, with a transfer minimum price set at 1.481 billion yuan, an 80% discount from the previous listing price, and only 64% of the initial listing price from just 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 its registered address is in Baotou City, 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 contributing companies hold 58.54%, 24.39%, 14.63%, and 2.44%, respectively.

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

The transfer conditions include that the acquirer must fully understand the functions, business nature, and risk characteristics of trust companies, as well as the shareholder responsibilities and obligations. They should further strengthen New Era Trust’s capital strength and have the capacity to maintain stable development and ongoing operations. The source of funds for the acquirer must be from their own funds or other approved sources; borrowing or entrusted funds are not allowed. After the transfer, the employment relationships with existing staff will remain unchanged, and the acquirer commits to safeguarding the legitimate rights and benefits of current employees. The acquirer also promises to cooperate with regulatory authorities and facilitate the company’s risk disposal work.

Industry experts believe that the continuous “shrinkage” in New Era Trust’s equity valuation is driven both by internal mismanagement and external industry transformation. Due to illegal and non-compliant operations, many products under New Era Trust have experienced widespread overdue payments. On July 17, 2020, the China Banking and Insurance Regulatory Commission (CBIRC) took over the company, with the takeover lasting until July 16, 2021. Since then, 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, the CBIRC extended the takeover for another year, until July 16, 2022.

During the takeover period, New Era Trust announced a plan to resolve the principal of individual investors. In June 2022, the company’s official website showed that New Era Trust would acquire the trust beneficiary rights held by investors, offering four different prices based on principal size: under 3 million yuan (excluding) at 80%; 3-6 million yuan (excluding) at 70%; 6-10 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, 6 billion shares were again listed on the Beijing Equity Exchange with a minimum price of 2.314 billion yuan. “Trust licenses used to be ‘hard currency,’ with deals often exceeding hundreds of millions or even billions. Now, they’ve fallen to just over ten billion,” said a trust industry insider. They 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 establish a foothold in trust, asset management, and wealth management. Without real skills, even holding a license won’t make money and could lead to faster losses.

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 stakes. However, some trust companies’ equity targets have received little market response, with multiple transfers, delayed listings, or price reductions. Western Trust’s equity, for example, has been listed four times for transfer.

“Market coldness toward 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 Youyi Financial Trust Research Institute. He noted that the trust industry is in a critical phase of business transformation, with most trust companies under significant performance pressure and ongoing exposure of industry risks. This has led to a decline in overall trust company valuations, especially impacting the value of equity held by minority shareholders. In the short term, this trend is unlikely to reverse, and the transfer of trust company equity by minority shareholders may continue.