What is the impact of the Silver LOF compensation plan? Guo Investment Capital: Expected impact on net profit is less than 5% in 2024

One week after the Silver LOF announced its valuation adjustment and compensation plan, the parent company of Guotou Ruixin Fund, Guo Investment Capital, issued its first official statement on the financial impact on the listed company.

On the afternoon of February 23, Guo Investment Capital Co., Ltd. (hereinafter “Guo Investment Capital,” stock code 600061) released an announcement regarding matters related to its subsidiary, Guotou Ruixin Fund Management Co., Ltd. (hereinafter “Guotou Ruixin Fund”).

The announcement disclosed that the valuation adjustment of Guotou Ruixin Silver Futures Securities Investment Fund (LOF) (hereinafter “Guotou Silver LOF”) under the company’s third-level holding investment has attracted market attention. Guotou Ruixin Fund issued a special work plan for this matter on February 15, 2026.

Guo Investment Capital stated that, based on preliminary estimates, this plan is expected to have a certain negative impact on the company’s net profit attributable to shareholders in 2026, with the impact amounting to less than 5% of the company’s audited net profit attributable to shareholders in 2024, and will not have a substantial effect on the company’s overall business development.

On the same day that the parent company disclosed the financial impact, Guotou Silver LOF (161226) once again issued an announcement regarding suspension and resumption of trading in the secondary market. The announcement showed that due to recent trading prices in the secondary market being significantly higher than the net asset value of the fund shares, resulting in a large premium, the fund will suspend trading from market open on February 24, 2026, until 10:30 a.m. on the same day, when trading will resume.

This is the latest in a series of suspension measures taken by the fund to address the risk of high premiums.

What is the impact?

According to Guo Investment Capital’s 2024 annual report, the company’s net profit attributable to shareholders in 2024 was 2.694 billion yuan. If calculated at the “less than 5%” maximum as stated in the announcement, the impact amount would be approximately 134.7 million yuan.

However, since Guo Investment Capital does not hold Guotou Ruixin Fund outright, this figure needs to be adjusted based on the equity structure. Public information shows that Guo Investment Capital indirectly holds 61% of Guotou Taikang Trust Co., Ltd., which in turn holds 51% of Guotou Ruixin Fund.

Based on this ownership structure, to reach the maximum impact of 134.7 million yuan on net profit attributable to shareholders, Guotou Ruixin Fund itself would need to bear an even higher amount due to this compensation plan.

According to Guo Investment Capital’s annual report data, in 2024, Guotou Ruixin Fund achieved a total operating revenue (consolidated) of 1.379 billion yuan and a net profit of 376 million yuan.

Guo Investment Capital concluded the announcement by stating that it will continue to supervise its controlling investment enterprises to strictly adhere to compliance, fulfill their main responsibilities, improve risk management capabilities, enhance investor returns, and maintain the steady and healthy development of the capital market. The company also emphasized that this matter “will not have a substantial impact on the company’s overall business development.”

As of the close on February 13, according to Dazhihui VIP, Guo Investment Capital closed at 7.58 yuan per share, down 1.94%, with a total market value of approximately 48.466 billion yuan.

Extreme Market Conditions and Valuation “Cliffs” and Tiered Compensation

The root of this incident can be traced back to the international precious metals market at the end of January 2026. Influenced by multiple international political and economic factors, the COMEX silver futures experienced an epic single-day drop of over 36% on January 30.

Due to differences in trading limit systems between domestic and international futures markets, the Shanghai Futures Exchange’s silver futures, which are linked to the international market, were limited to a ±17% daily price limit in subsequent trading days. This prevented the prices from fully reflecting the sharp decline in the international market, leading to difficulties in determining fair value for the main domestic silver futures contracts used to calculate the net asset value of Guotou Silver LOF.

To treat all holders fairly and prevent some investors with insider knowledge from exploiting valuation time lags for “early redemption advantage,” Guotou Ruixin Fund adjusted its fund valuation, reducing the net value decline from -17% (based on domestic futures prices) to -31.5%. While this adjustment made the fund’s net value more aligned with the actual international market decline, it also caused disputes among investors who redeemed their shares the day before the adjustment regarding their redemption amounts.

In response to investor concerns, Guotou Ruixin Fund issued a special work plan on February 15, 2026. This is the first time a public fund has introduced a compensation plan following valuation adjustments caused by extreme market conditions.

According to the plan, the compensation applies to individual investors who redeemed their shares on February 2, 2026, with net asset value confirmation (including redemption requests submitted after 3:00 p.m. on January 30, 2026, and before 3:00 p.m. on February 2, 2026), excluding institutional investors.

For individual investors affected by the valuation adjustment (from -17% to -31.5%) with impact amounts below 1,000 yuan, the full impact amount will be used to determine the settlement amount (more than 90% of the investors redeeming on that day fall into this category).

For those with impact amounts exceeding 1,000 yuan, the total settlement amount will be calculated by adding 1,000 yuan plus the excess over 1,000 yuan multiplied by a certain proportion.

Guotou Ruixin Fund stated that affected individual investors can search for the “Guotou Ruixin Silver Fund” mini-program on Alipay, complete identity verification as prompted, and follow the instructions to handle related matters online. Due to the large number of investors involved and the workload, the company is actively preparing technical support, and the mini-program will be officially launched on February 26, 2026.

(Source: The Paper)