Fund company's one-time "settlement" could affect a year's profit?

Guotou Ruixin Silver LOF continues to attract more attention.

During the Spring Festival holiday, Guotou Ruixin official account released the “Announcement on the Relevant Plan for Silver Fund by Guotou Ruixin Fund Management Co., Ltd.,” announcing a special “settlement” for individual investors who confirmed redemption on February 2.

On the last evening before returning to work after the holiday, Guotou Ruixin’s “indirect shareholder” (a shareholder of a shareholder) Guo Investment Capital issued an announcement regarding the potential impact of the above work plan on the company’s performance (see below).

This revealed further “details” and “progress” of the Guotou Ruixin Silver LOF incident.

Impact of Guo Investment Capital Announcement

The main content of Guo Investment Capital’s announcement includes the following:

Recently, the valuation adjustment of Guotou Ruixin Silver Futures Securities Investment Fund (LOF), a subsidiary of Guotou Ruixin Fund under Guo Investment Capital’s third-level holding company, has attracted market attention. Guotou Ruixin Fund issued a special work plan on February 15, 2026.

According to the relevant regulations of the Shanghai Stock Exchange Listing Rules, relevant information and its impact on Guo Investment Capital should be disclosed promptly, hence this announcement.

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

What is the maximum impact?

So, what is the actual impact?

Specific data has not been disclosed, but based on Guo Investment Capital’s 2024 annual report, its net profit attributable to shareholders was 2.694 billion yuan. Therefore, the announcement confirms that the “settlement” plan for Guotou Ruixin Silver LOF is expected to impact Guo Investment Capital’s net profit attributable to shareholders by no more than 135 million yuan.

However, considering that Guotou Ruixin is a “third-level subsidiary” of Guo Investment Capital (a great-grandchild company), which fully owns Guo Investment Capital Holdings Ltd., which in turn holds 61.3% of Guotou Taikang Trust, and Guotou Taikang Trust owns 51% of Guotou Ruixin Fund (see below).

If this impact is calculated based on the penetrating shareholding ratio, then it can be inferred that Guo Investment Capital estimates that the overall expenditure for Guotou Ruixin’s plan will not exceed 432 million yuan.

Is the “upper limit” of the plan higher than the fund company’s annual profit?

Additionally, according to Guo Investment Capital’s 2024 annual report, Guotou Ruixin achieved a net profit of 376 million yuan in 2024.

“After penetration,” the annual profit of Guotou Ruixin accounts for approximately 3.69% of Guo Investment Capital’s net profit attributable to shareholders (see below, source: Guo Investment Capital 2024 Annual Report).

Using this as a reference, the estimated upper limit of the expenditure for this work plan by the fund’s shareholders does not exceed 1.36 times Guotou Ruixin’s 2024 net profit.

Detailed Explanation of the Silver Fund Work Plan

Looking back now, Guotou Ruixin’s “record-breaking” work plan still contains many “innovations” and unprecedented “work details” in the industry.

First, the fund manager reiterated in the announcement that the valuation adjustment on the evening of February 2 was influenced by historically extreme market conditions in silver prices. To treat all investors fairly and avoid “preferential redemption,” this decision was made.

However, given the valuation adjustment of the silver LOF, the related announcement has attracted high investor attention. “In response to everyone’s concerns, we have always responded actively with urgency, striving to address all demands, and have promptly coordinated and advanced various tasks, formulating a special work plan.”

Second, Guotou Ruixin states that the plan follows principles of layered classification and convenience and reliability. To maximize the protection of investors’ legal rights, especially small and medium investors, the scope of the plan is limited to natural persons who redeemed based on the net asset value confirmed on February 2, 2026 (including redemption applications submitted after 3:00 pm on January 30, 2026, and before 3:00 pm on February 2, 2026), excluding institutional investors.

Third, the plan also differentiates the “settlement” ratio based on different redemption amounts for individual investors:

For affected amounts (from -17% to -31.5%) below 1,000 yuan, the full amount of the impact will be used to determine the settlement amount (over 90% of the redemption investors on that day fall into this category).

For affected amounts above or equal to 1,000 yuan (from -17% to -31.5%), the total settlement amount will be calculated by adding 1,000 yuan plus the excess over 1,000 yuan multiplied by a certain ratio.

Fourth, eligible individual investors can search for the “Guotou Ruixin Silver Fund” mini-program on Alipay, complete identity verification as prompted, and handle related matters online.

Due to the large number of investors and workload, to ensure that investors’ demands are addressed conveniently and reliably, Guotou Ruixin is actively preparing technical support. The mini-program will be officially launched on February 26, 2026.

Additionally, the announcement states that since the mini-program is on Alipay, the company has provided a dedicated consultation line for mini-program usage and also announced a hotline for clients without Alipay access.

“Hot topics” and “impacts” are still many

Guotou Silver LOF’s work plan is a groundbreaking institutional arrangement in the industry for the controversy caused by fund valuation adjustments, setting a record in the industry. After its release, discussions, debates, and impacts within the industry are expected to continue for a long time.

First, this plan originated from the fund company’s approach to valuation adjustments, serving as a reminder for fund companies to carefully determine valuation adjustment schemes, especially regarding the timing and specific details of the plan.

Second, it was triggered by the historic volatility of silver prices, highlighting the need for fund companies to prudently create and meticulously design commodity and futures-linked fund contracts, and to prepare comprehensive contingency plans for potential large fluctuations.

Third, since the involved funds operate both in OTC and on-exchange markets with distinct price behaviors, such products demand high professional standards in product design, risk management, compliance, disclosure, and external communication—these requirements are systematic, comprehensive, and continuously evolving.

Fourth, after the specific work plan is released, different types of investors may have their own demands and opinions, such as why institutional investors are not included, or why the “full settlement” threshold is set at 1,000 yuan. These issues require rational communication and understanding.

In summary, although this event is not over, it offers many lessons for the industry. An important insight is:

A public fund product is not something that can grow naturally once created; it requires managers, sales teams, and all involved parties to continuously refine and improve. Also, no fund product is perfect at inception; through ongoing refinement and time, it can become better.

Risk Warning and Disclaimer

Market risks exist; investments should be cautious. This article does not constitute personal investment advice and does not consider individual users’ specific investment goals, financial situations, or needs. Users should consider whether any opinions, viewpoints, or conclusions herein are suitable for their circumstances. Investment is at their own risk.