Photographer: Nelson Ching/Bloomberg

Billionaire Shi Boosts Investment in China’s Minsheng Bank

  • Shi boosts his exposure ahead of a looming board revamp
  • Anbang is biggest shareholder in private Chinese lender

Chinese billionaire Shi Yuzhu has boosted his investment in China Minsheng Banking Corp. ahead of a looming revamp of the privately owned lender’s board.

Shi, the chairman of Giant Interactive Group, an online game developer, now has an interest, including derivatives, equivalent to 9.6 percent of Minsheng Bank’s currently issued Hong Kong stock, according to an exchange filing this week. That was up from a previous 1 percent, the filing showed.

Anbang Insurance Group Co., the Chinese firm that has been on a global dealmaking spree, is the lender’s largest shareholder.

Minsheng Bank’s board is overdue for an election after a three-year term ended in April 2015. Anbang, which became Minsheng Bank’s biggest shareholder in 2014, has indicated that its stake, which stood at 17.8 percent as of June, is only a financial investment.

In a posting on Weibo in January 2015, Shi said he welcomed the insurer as the biggest shareholder and joked that since Anbang Chairman Wu Xiaohui is an old classmate, Shi would “kick his ass” if Wu screwed the company up.

Shareholder Moves

A series of shareholder moves have prompted speculation on what plays could be possible at the lender. Minsheng Bank’s Vice Chairman Lu Zhiqiang in July boosted his stake in the lender to 4.6 percent, while in June two other shareholders, Orient Group Inc. and Huaxia Life Insurance Co., struck a deal to act in concert.

Jonathan Koh, a Singapore-based analyst at UOB Kay Hian, said that the significance of Shi’s purchases could depend on “whether he continues buying and who he has been buying from.” It’s possible that a “tussle for control” that drives up the share price could emerge if Shi has been buying from the market, said Koh, who has a hold rating on the stock.

Founded in 1996 by 59 private investors, the bank has faced challenges including former President Mao Xiaofeng resigning early last year amid an investigation by the authorities.

Minsheng Bank shares have climbed 12 percent in Hong Kong this year, outpacing a 2.5 percent gain in the benchmark Hang Seng Index.

— With assistance by Jun Luo

(Updates with share performance in final paragraph.)
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