Sunshine Insurance to auction 674 million domestic shares, starting at ~2.12 billion yuan, linked to 'Fuxing' fraud case

Following the successful auction of 100 million shares held by Guangxi Yuanchen in January this year, Sunshine Insurance (06963.HK) equity has once again appeared on judicial auction platforms.

Recently, three announcements for auctions of domestic shares in Sunshine Insurance Group were simultaneously posted on Alibaba Assets’ judicial auction platform, totaling 674 million shares with an aggregate starting price of approximately RMB 2.123 billion, uniformly priced at RMB 3.15 per share. All three lots are being handled by the Shanghai No. 2 Intermediate People’s Court, with bidding scheduled to begin at 10:00 a.m. on November 3 and close at 10:00 a.m. on November 6.

Based on Sunshine Insurance’s total share capital of 11.502 billion shares, the shares up for auction account for approximately 5.86% of its total share capital, marking the largest concentrated disposal of equity since the company listed in Hong Kong at the end of 2022.

Source: Alibaba Assets Judicial Auction Platform

Three Lots Split; Two Long-Term Shareholders Set to Exit Completely

According to the announcements, the 674 million shares have been divided into three lots:

• Two lots under Beijing Taihe Fangyuan Investment Co., Ltd. (totaling 500 million shares):
• 411.22 million shares – starting price: approximately RMB 1.295 billion
• 88.78 million shares – starting price: approximately RMB 280 million
• One lot under Beijing Zhongcheng Hengtai Investment Co., Ltd. (174 million shares):
• Starting price: approximately RMB 548 million

If all lots are successfully sold, both long-term shareholders will exit their positions entirely.

Pricing Details

An appraisal report dated August 1, 2026, as the valuation base date, assessed the value of the 674 million domestic shares at RMB 1.847 billion, equivalent to RMB 2.74 per share. The current displayed starting price of RMB 3.15 per share represents a premium of approximately 15% over the appraised value.

The announcements note that RMB 3.15 is merely a displayed price; the actual starting price will be finalized before November 3, calculated by multiplying the average closing price of Sunshine Insurance’s H-shares over the preceding 20 trading days by the HKD-to-RMB exchange rate.

Bidding Qualifications

Bidding qualifications are stringent:

• Buyers must meet the shareholder qualification requirements stipulated in the Administrative Measures for Equity of Insurance Companies
• Approval from the National Financial Regulatory Administration is required before ownership transfer can be completed
• A pre-qualification review must be passed prior to paying the bid bond
• Full payment must be settled within 15 calendar days after winning the bid

Underlying the “Fuxing System” RMB 7 Billion Legacy Case

The inclusion of these shares in judicial auctions stems not from ordinary commercial debt disputes but rather from the enforcement of pledged assets involved in criminal cases related to illegal fundraising by the “Fuxing System,” following the effective judgment of those cases.

Background

In 2018, risks associated with the private equity group controlled by Zhu Yidong, known as the “Fuxing System,” erupted. On November 22, 2021, the Shanghai No. 2 Intermediate People’s Court issued its verdict:

• Fuxing Group was fined RMB 2.1 billion
• Zhu Yidong was sentenced to life imprisonment, deprived of political rights for life, and fined RMB 15 million

The trial revealed that between 2014 and 2018, Fuxing Group illegally raised more than RMB 56.5 billion, with unredeemed principal amounting to as high as RMB 21.8 billion at the time the case broke.

Impact on Caitong Asset Management

Caitong Asset Management was among the institutions most severely impacted. According to public reports, it served as the manager for multiple asset management plans issued by the “Fuxing System,” with a total scale of approximately RMB 7 billion. The 674 million Sunshine Insurance shares currently up for auction constitute core collateral or pledged assets.

Penetrating the equity structure reveals:

• Taihe Fangyuan is wholly owned by Beijing Wanquan Yide, which can be further traced back to Caitong Asset Management
• Major shareholders of Zhongcheng Hengtai also retain ties to the “Fuxing System”

As early as February 2018, the relevant shares had already been pledged to Caitong Asset Management. Due to prolonged judicial freezes on assets involved in the case, monetization efforts only commenced after the criminal judgments became legally effective.

Second Judicial Auction This Year; Pricing Down Approximately 29% Compared to January Transaction

Notably, this is not the first appearance of Sunshine Insurance’s domestic shares on judicial auction platforms.

Previous Auction in December 2025

In December 2025, 100 million shares held by Guangxi Yuanchen Investment Group were initially listed with a starting price of RMB 551.34 million but failed to attract any bids. Half a month later, the starting price was reduced by 20% to approximately RMB 441 million for a second-round auction, ultimately won by Beijing Shouyuan Xinrong, a wholly-owned subsidiary of Hong Kong-listed Shoucheng Holdings (00697.HK), for RMB 441.07 million, equivalent to RMB 4.41 per share.

At that time, Sunshine Insurance itself was a major shareholder of Shoucheng Holdings, and the two parties had jointly established an urban development infrastructure investment fund with a total scale of RMB 10 billion, leading the market to view the transaction as a friendly acquisition by affiliated capital.

Price Comparison

Using this as a reference point, the current displayed price of RMB 3.15 per share represents a decline of approximately 29% compared to the unit transaction price of RMB 4.41 achieved in January.

Beyond stock price fluctuations, the overall disposal of insurance institution equity remains subdued, with listings of equity stakes in several small and medium-sized insurers failing to attract bids since 2025.

Fundamentals

On the fundamentals front, Sunshine Insurance reported net profit attributable to shareholders of RMB 4.694 billion in the first half of 2026, representing a year-on-year increase of 38.5%; comprehensive...

(Source: Southern Metropolis Daily)