Sunshine Insurance 674M Domestic Shares Up for Auction at 2.1B Yuan, Tied to Fuxing Case Asset Disposal

Source: Time Finance Author: He Xiulan

Following the successful auction of 100 million domestic shares held by Guangxi Yuanchen in January this year for 441 million yuan, equity stakes in Sunshine Insurance Group Co., Ltd. ("Sunshine Insurance," stock code: 06963.HK) have once again become a focal point on judicial auction platforms.

According to information from the Ali Assets Judicial Auction Platform, Sunshine Insurance's domestic shares held by Beijing Taihe Fangyuan Investment Co., Ltd. ("Taihe Fangyuan") and Beijing Zhongcheng Hengtai Investment Co., Ltd. ("Zhongcheng Hengtai") have been split into three lots and collectively listed for auction. The total number of shares is 674 million, with an aggregate starting price of approximately 2.123 billion yuan. Bidding for all lots will close at 10:00 AM on November 6.

The volume of equity to be disposed of in this round is nearly seven times the scale of the auction in January this year. All three lots are displayed with a uniform starting unit price of 3.15 yuan per share, representing a decline of approximately 29% compared to the transaction unit price of the previous auction.

Based on Sunshine Insurance's total share capital of 11.502 billion shares, the shares up for auction account for approximately 5.86% of the company's total share capital. This marks the largest concentrated disposal of equity since the company's listing on the Hong Kong Stock Exchange at the end of 2022.

If the transaction is successful, Taihe Fangyuan and Zhongcheng Hengtai — two long-standing shareholders of Sunshine Insurance — will achieve a complete exit through this process. The reason these equity stakes entered the judicial auction procedure lies behind the "Fuxing System" asset management default case, which has persisted for eight years, involves approximately 7 billion yuan, and remains unresolved to this day.

Assets Involved in the Fuxing Case Listed for Auction; Shareholder Structure May Change

The equity up for auction in this instance can be traced back to the nationwide "Fuxing System" illegal fundraising scandal that erupted in 2018.

In 2018, risks within the "Fuxing System" private equity group, effectively controlled by Zhu Yidong, burst simultaneously. At its peak, the group managed assets worth hundreds of billions of yuan. A failure in market manipulation in the secondary sector led to a broken cash flow chain, resulting in one of the major cases with significant involvement in China's private equity industry. Multiple financial institutions were caught up in the fallout, with Shanghai Caitong Asset Management Co., Ltd. ("Caitong Asset") being one of the most severely affected institutions.

According to a 2019 report by Red Weekly, the total scale of multiple asset management plans issued by Caitong Asset for the "Fuxing System" was approximately 7 billion yuan. Among these, product series using 674 million shares of Sunshine Insurance as collateral assets or repayment sources represented the most difficult to dispose of and also the core pledged or collateralized assets.

The direct holders of these 674 million shares of Sunshine Insurance equity are precisely Taihe Fangyuan and Zhongcheng Hengtai. Previously, the "Fuxing System" indirectly achieved 100% ownership of these two holding entities through two subsidiaries of its Shanghai Fulong Asset Management Co., Ltd.: Beijing Wanquan Yide Investment Fund Management Co., Ltd. and Tibet Taixi Investment Management Co., Ltd.

From the latest equity penetration information:

• Taihe Fangyuan is currently wholly owned by Beijing Wanquan Yide Investment Fund Management Co., Ltd., which can be further traced back to under Caitong Asset.
• Zhongcheng Hengtai has undergone shareholder changes, but its major shareholders still retain ties to the "Fuxing System."

Business registration records show that in February 2018, there were two unpublicized equity pledge registration records for Sunshine Insurance, with Caitong Asset as the pledgee in both instances. Additionally, according to Sunshine Insurance's 2020 solvency report, all Sunshine Insurance shares held by Taihe Fangyuan and Zhongcheng Hengtai were already in a pledged state at that time.

The market had long been watching the disposal prospects of this batch of equity, but due to the long-term judicial freezing of "Fuxing System" assets, the monetization of these assets was delayed for a considerable period.

Eight years after the outbreak of the "Fuxing System" crisis, with the advancement of judicial procedures, the long-shelved pledged assets have finally been split and listed for auction. In this auction, the three lots correspond respectively to:

• 411.22 million shares held by Taihe Fangyuan
• 88.78 million shares held by Taihe Fangyuan
• 174 million shares held by Zhongcheng Hengtai

The total number of shares matches exactly with the aforementioned "674 million shares."

It is evident that this is not a scattered reduction of holdings by ordinary shareholders, but rather a comprehensive liquidation of pledged assets under the same debt chain. If the delivery is completed in this auction, the main shareholder structure of Sunshine Insurance may undergo another reshuffle.

Notably, according to an appraisal report issued by Shanghai Dahong Asset Appraisal Co., Ltd. on August 1, 2026, the appraised market value of the 674 million domestic shares of Sunshine Insurance was 1.847 billion yuan, equivalent to 2.74 yuan per share. However, the aggregate starting price for this auction is approximately 2.123 billion yuan, equivalent to a displayed unit price of about 3.15 yuan per share, representing a premium of 14.94% over the appraised value.

By lot, the displayed starting prices are:

| Lot | Shares | Displayed Starting Price | |-----|--------|--------------------------| | Taihe Fangyuan | 411.22 million | 1.295 billion yuan | | Taihe Fangyuan | 88.78 million | 280 million yuan | | Zhongcheng Hengtai | 174 million | 548 million yuan |

The auction announcement also notes that the starting prices marked on the platform are merely display prices and not the actual starting prices. Affected by factors such as stock price fluctuations, the actual starting prices will be adjusted before November 3, 2026. The pricing method is based on the average closing price of Sunshine Insurance's H-shares over the 20 trading days prior to the starting date, multiplied by the HKD/CNY exchange rate.

Fundamentals of the Target Are Solid, but Barriers to Entry Have Risen

Comparatively, although the displayed starting unit price of 3.15 yuan per share in this auction carries a premium over the appraised value, it is still approximately 29% lower than the transaction unit price of 4.41 yuan from the Guangxi Yuanchen equity auction in January this year.

This pricing may have learned from the lesson of the first auction failing to attract bids in the previous round. The initial listing starting price for the equity held by Guangxi Yuanchen was 551 million yuan, attracting no bids. It was only after a price reduction of nearly 20% that the deal was finally concluded at the reserve price. Based on the closing price of Sunshine Insurance's H-shares on January 15 of 3.961 HKD per share, converted to RMB at 3.38 yuan, the transaction unit price of 4.41 yuan for Guangxi Yuanchen's equity represented a premium of over 30% compared to the secondary market price.

At the asset level itself, this batch of equity holds strong appeal. Sunshine Insurance is one of the few full-license private insurance groups in China, with business coverage spanning property insurance, life insurance, credit guarantee insurance, asset management, healthcare, elderly care, and other sectors.

Interim results announcements show that in the first half of 2026:

• Net profit attributable to parent company shareholders: 4.694 billion yuan (year-on-year increase of 38.5%)
• Embedded value: 129.428 billion yuan (up 7.2% from the end of 2025)
• Comprehensive solvency adequacy ratio: 185%
• Dividends: Maintained stable since listing

An insurance industry observer analyzed for Time Finance that while equity auctions for small and medium-sized insurers frequently fail to attract bids, top-tier targets with solid fundamentals can still secure capital offers. The combination of a full license, clear governance structure, and dividend visibility constitutes the basis for the premium of Sunshine Insurance equity in a cold market.

However, compared to the auction in January this year, the practical difficulty of this asset disposal has increased significantly.

Firstly, the funding threshold brought about by the transaction volume. The 674 million shares correspond to a displayed starting scale of 2.1 billion yuan on the platform. Simultaneously, bidders must meet regulatory qualification conditions for insurance company shareholders, and upon winning the bid, they must pay the remaining auction balance in full within 15 calendar days. Potential bidders who simultaneously possess large-scale financial strength and insurance shareholder regulatory qualifications are inherently very limited in number.

Secondly, there is the issue of space for related-party takeover. Looking back at the auction in January this year, the winner, Beijing Shouyuan Xinrong Investment Co., Ltd., is a wholly-owned subsidiary of Shoucheng Holdings (stock code: 00697.HK), while Sunshine Life and Sunshine Property Insurance — subsidiaries of Sunshine Insurance — are major shareholders of Shoucheng Holdings. This transaction was widely viewed by the market as a continuity takeover by related parties under existing cooperative relationships. If the three lots in this round still require backing by "insiders," determining which industrial capitals outside the "Shoucheng system" are willing to step in will directly dictate the outcome of the auction.

Furthermore, from an industry environment perspective, the disposal of insurance institution equity remains overall in a low-temperature zone. Since 2025, equity auctions for several small and medium-sized insurers — including Ancheng Property Insurance, Beibu Gulf Property Insurance, Sanxia Life Insurance, Minsheng Life Insurance, Xintai Life Insurance, and Qianhai Property Insurance — have all failed to attract bids. Whether the 2.1 billion-yuan-level Sunshine Insurance equity can successfully find buyers concerns not only the realization of recovery rates for creditors in the "Fuxing case" but will also once again test the market's confidence in pricing high-quality insurance assets.