SHANGHAI—China Huarong Asset Management Co., Ltd., a state-owned asset management company, sought to turn the page on a deep annual loss on Aug. 30, as its chairman said it was in talks with potential new strategic investors alongside a CITIC-led (CITIC Group Corporation Ltd., a state-owned investment company) consortium.
Wang Zhanfeng, on a call a day after releasing earnings results, said many investors continue to have faith in Huarong and that it was speaking with new potential domestic and foreign strategic investors.
On Aug. 29, Huarong announced a first-half 2021 profit of $24.5 million and a nearly $16 billion loss for 2020. Restructuring uncertainties delayed its annual results statement by nearly five months.
Earlier in August, the indebted company informed investors of a state-backed rescue plan led by the CITIC Group Corp.
The deal would make Huarong a subsidiary of CITIC Group, part of a plan by regulators to fold financially shaky state asset managers into financial holding groups, according to two sources familiar with the restructuring process.
Huarong is one of four distressed state-owned debt managers and counts China’s finance ministry as its largest shareholder.
“We need to turn from quick profits to long-term profits to hard-earned profits,” Liang Qiang, executive director of Huarong, said on the earnings call, alluding to the company’s rapid expansion under its former chairman Lai Xiaomin.
Lai was executed in January, following one of China’s highest-profile corruption cases.
Huarong executives emphasized that a more stable outlook for the company will require focusing on its core business. They said the company’s offshore unit, Huarong International, would remain a strategic platform. They believe that it will continue to improve its asset structure and that its financial indicators will recover.