indianajonespinballmachine| Responding to the slowdown in equity financing, securities firms promote diversification of investment banking business structure

Stock speculation to see Jin Kirin analyst research report, authoritative, professional, timely, comprehensive, to help you tap the potential of the theme opportunity!

Ma Jing and Liu Yiwen, a reporter from the Securities Times

At present, equity financing slows down in stages, and the investment banking business of securities firms is affected to varying degrees. How to deal with it is a problem that securities firms need to solve.

"take the current market environment as a valuable opportunity to strengthen the foundation, improve internal skills, and adjust direction, and take up the responsibility of being the gatekeeper of the capital market in a down-to-earth manner." Recently, the relevant person in charge of Shenwan Hongyuan Securities said in an interview with a reporter from the Securities Times. Citic Securities and Minsheng Securities also hold similar views.

By interviewing and combing the contents of various head brokerage performance presentations, a reporter from the Securities Times found that securities firms are stepping up their efforts to seek diversified business layout, such as targeting mergers and acquisitions of state-owned enterprises, coordination of industry and finance, and the listing of the new third board. At the same time, investment banks should not only be "investment banks", but also extend the service chain, strengthen internal coordination, and become integrated financial service providers.

In the long run, securities firms are not pessimistic, believing that investment banking is still full of business.IndianajonespinballmachineWhen there is an opportunity, we should keep pace with the times, follow the strategic guidance of supervision, and adjust the business focus and resource layout accordingly.

The long-term opportunities still outweigh the challenges.

Since the "827" new policy of the CSRC proposed a phased slowdown of IPO last year, the business of equity financing has tightened, the number of declarations has decreased, and the pace of review and issuance has slowed down. Brokerage investment banking bears the brunt, with 25 of the 31 listed brokerages that have disclosed their 2023 transcripts falling from the previous year, according to Wind.

Since the beginning of this year, the downward trend of equity financing business has not improved significantly. According to the date of issue, equity financing fell by 75% in the first quarter of 2024 compared with the same period last year. IPO and refinancing of listed companies both declined by more than 70%.

"the current environment not only puts forward higher requirements for the high-quality development of investment banking business in the short term, but also brings some pressure on the transformation and upgrading of investment banking equity business lines, but in the long run, there are still more opportunities than challenges." The person in charge of Shen Wanhongyuan Securities told the Securities Times reporter.

People related to Minsheng Securities mentioned in an interview with reporters that the policy goal of the new "National Nine articles" is to improve the quality of listed companies from the source and guide the market to develop and optimize in a benign direction, while various regulatory policies put forward specific measures from various aspects. conducive to the construction of a long-term and healthy development of the capital market.

The person in charge of Shen Wanhongyuan Securities further mentioned that the future development task of China's capital market has been clearly defined in the new "National Nine articles". Investment banks should use this as a blueprint to strengthen investment banks and constantly deepen their understanding of the spirit of the current policy. update the internal system and best adjustment guidelines with reference to the new regulatory requirements, starting from the interests of investors The recommended enterprises with strong "investment", strict internal control and innocence can land in the capital market. It is necessary to have a deeper understanding of the business pattern and industry characteristics of issuers, identify the targets of excellent assets, tap enterprise value, and select high-quality enterprises with both "approbability" and "investability".

In the recent performance presentation meeting, Guotai Junan, Haitong Securities and other securities firms also mentioned a similar point of view. Guotai Junan said that strictly controlling the entry of issuance and listing and co-ordinating the balanced development of the first and second levels does not mean the stagnation of investment banking business. the focus of the capital market to serve the high-quality development of the economy is still to promote the development of new quality productive forces and the construction of a modern industrial system. In the long run, with the comprehensive and strict strengthening of financial supervision, the quality of listed companies will be further improved. The professional service level of intermediary agencies is also improving, and the capital market will form a more virtuous circle.

Seek diversification of business structure

In the new market environment, where should investment banks look for business increment? Generally speaking, the high-frequency words mentioned by securities investment banks are to open up the debt market, boost the market of the Beijing Stock Exchange, focus on mergers and acquisitions, and speed up overseas layout.

Citic Securities said that it will provide in-depth professional services for comprehensive debt financing, strengthen the development of strategic customers such as central enterprises, state-owned enterprises, financial institutions and strategic emerging industries, and actively expand overseas customers in conjunction with the "Belt and Road Initiative" initiative of the country. efforts will be made to promote the development of bond incremental business. At the same time, we will continue to promote debt financing innovation, increase policy-oriented investment in science and technology bonds, green bonds, and rural revitalization bonds, work together to build a complete business ecology from Pre-REITs to public REITs (real estate investment trusts), and serve multi-level REITs market construction.

In terms of M & An and restructuring business, several securities firms have their own focus. Huatai Securities said that it is necessary to go deep into the industrial integration opportunities of leading enterprises in key industries, actively pay attention to the trading opportunities for the transfer of control of listed companies, seize the opportunities for the restructuring of state-owned enterprises, and promote state-controlled listed companies to be better and stronger. Guotai Junan said it focused on M & An and bond financing aimed at industrial investment banks. Haitong Securities said that it is necessary to firmly seize the M & An opportunities in the upper and lower reaches of the industry encouraged by the current regulation. China Merchants Securities mentioned that the M & A business will focus on strengthening industry-finance coordination and industrial mergers and acquisitions with the China Merchants Group, helping the group to distribute emerging industries and strengthening the linkage and coordination with the financial sector of the China Merchants Group.

In terms of overseas business development, Citic Securities said it would strengthen equity financing in Hong Kong equities, GDR (Global Depositary receipts) and overseas markets such as Southeast Asia, as well as debt businesses such as Chinese offshore bonds and US dollar bonds in overseas markets such as Southeast Asia. In addition, it also includes the development of M & A business such as outbound mergers and acquisitions of Chinese-funded enterprises, inbound mergers and acquisitions of foreign-funded enterprises, industrial mergers and acquisitions of overseas listed companies and privatization, so as to continuously enhance international competitiveness.

Build the market of the Beijing Stock Exchange

Characteristic and differentiated service

In addition to the above direction, almost every brokerage has stated that it wants the Nuggets North Stock Exchange market opportunity.

"the Beijing Stock Exchange is positioned to create a 'main position' for serving 'innovative small and medium-sized enterprises', while the target positioning of the 'main position' represents that the Beijing Stock Exchange is not a 'small market', but a 'big market' that is linked with the first-level private equity market, the local regional equity market, the new third board, the Shanghai and Shenzhen exchanges, and the omni-directional, full-chain and full-life cycle to support the innovation and development of small and medium-sized enterprises." Introduction of Shen Wanhongyuan Securities.

Based on this, Shenwan Hongyuan Securities said that the long-term strategic layout of the company's business line in the North Stock Exchange is not limited to the North Exchange market itself. but a set of covering the first-tier equity investment, regional equity market, the new third board, the Beijing Stock Exchange, Shanghai and Shenzhen exchanges and other omni-directional markets, linkage "investment + investment banking + research" full-chain business system. Shenwan Hongyuan Securities has set up a special department in investment banking, research and other lines to provide in-depth services to companies listed on the North Stock Exchange. At the same time, it pays more attention to specializing in the listing and cultivation of new small and medium-sized enterprises in breadth, extending the tentacles of capital market services to "earlier, smaller, newer" small and medium-sized enterprises, and providing some inclusive services.

Citic Securities and Minsheng Securities also mentioned similar expressions of the "investment + investment banking + investment research" strategy. In addition, the two brokerages also stressed the need to pay more attention to serving strategic emerging industries and future industries.

Citic Securities said that in recent years, the company has regarded the business of the Northern Stock Exchange as an important strategic direction, continuously strengthening the market research and customer service of the Northern Stock Exchange, focusing on the areas of scientific and technological equipment manufacturing, new materials, national defense and military industry, new generation information technology and medical and health care, and exploring and cultivating more high-quality, specialized and new enterprises with sustainable operating ability and investment value, so as to better grasp the value of issuers and the needs of investors.

Basic skills should be well practiced during the trough period.

Over the past decade, investment banks have also experienced several rounds of cyclical fluctuations, and once the market fever returns and passes the trough, the prospect is promising. A reporter from the Securities Times noted that in addition to adjusting the focus of operation according to the situation, a number of securities firms said that they should practice their basic skills in personnel organization, technical support, project reserves, and so on.

For example, Minsheng Securities and Guotai Junan all mentioned the need to strengthen the construction of digital investment banks. Haitong Securities and others said that it is necessary to deeply explore and develop key areas and industry markets, increase market expansion efforts, and reserve high-quality and high-quality projects.

China Merchants Securities said that it is necessary to dynamically optimize and adjust the personnel structure and improve the team efficiency according to the changes in the market environment.

It is worth mentioning that a number of securities firms unanimously stressed the need to strengthen compliance risk control and implement the duty of "gatekeeper". For example, Everbright Securities (rights protection) said that it is necessary to strengthen pre-judgment, grasp the key, and control risks. Through strengthening the risk management of the whole process of the project, controlling the risk points of different stages in the whole life cycle of the project, strengthening the screening, prevention and analysis of the project, drawing lessons from the supervision cases, strictly implementing the procedures of full adjustment and continuous supervision, standardizing the work of full adjustment and supervision.

Shenwan Hongyuan Securities believes that in accordance with regulatory requirements to strengthen internal controls, improve business implementation efficiency, reduce costs, including the possibility of appropriate personnel adjustments to adapt to changes in business volume. At the same time, pay attention to the improvement of staff skills and professional knowledge, pay attention to the training of the team, and maintain the stability and cohesion of the team. All these help to improve the risk resistance of the business as a whole.