Investment bank boss status was shaken

Recently the market came CICC to be listed in Hong Kong news, suddenly caused a hot debate. As an aristocratic investment bank that has long been famous, CICC used to be the head of an investment bank for many years. However, there are indications that the company has come down from the altar and its already prudent trump card investment banking business has eclipsed.

Investment bank boss status was shaken

The full name of CICC is China International Capital Corporation Limited. It is not hard to guess from the name that when it was established, the scope of its business should not be confined to the domestic market. The reason why CICC is so full Emboldened, because the company has a strong background.

In 1995, CICC came into being with the aura of the first joint-venture investment bank in China. The two major shareholders forming the company are particularly dazzling: China Construction Bank and international investment bank Morgan Stanley. In other words, since its inception, CICC has the mature experience of state-owned investment network and international investment bank. With the help of these two "engines," CICC's investment banking business was handy. The first large-scale project it completed was an IPO of China Telecom (Hong Kong) in New York and Hong Kong in 1997, raising as much as $ 4.2 billion . Since the early CICC companies often undertake IPO projects of large state-owned enterprises and earn more income than those who undertake small and medium-sized IPO projects, CICC is firmly in the domestic market for more than ten years Investment bank boss's throne. The 22.1 billion U.S. dollars raised by A + H, the Agricultural Bank of China underwritten by the company in 2010, is still the world's largest IPO today.

However, setting itself up in the "tall" position also laid a hidden danger for CICC, which is why the company will later be squeezed into the altar one of the reasons. Speaking, CICC went down the line with the Shanghai Stock Exchange down somewhat similar, in the era of state-owned enterprises have listed, both of which are beneficiaries, and when the lack of large-scale IPO resources, they fell into the dilemma of development, In particular, by the end of 2009, when the GEM was opened, SMEs listed one after another, leaving both the Shanghai Stock Exchange and CICC in crisis. "A securities analyst said.

The location of CICC's investment bank boss is indeed shaken after the GEM was booming, which can be concluded from the rankings of brokerage investment banks in recent years. Beijing Commercial Daily reporter from China Securities Industry Association statistics show that just started in 2009 and 2010, CICC's underwriting, sponsorship and mergers and acquisitions and other financial advisory business net income of more than 2 billion yuan, the broker Industry is still in the first place. However, after 2011, CICC's investment banking business quietly changed its position in the industry. The company's investment banking revenue in 2011 was only 991 million yuan, the rankings suddenly slipped from the first place to the fifth, I believe CICC at the time to see the rankings must also start to panic, which indicates that the company has not Then with the boss's emboldened investment bank. The facts also prove that CICC has failed to regain the number one position in recent three years. In 2012 and 2013, its investment banking business still ranked fifth in the industry.

Business is too embarrassed

At the beginning of its birth, CICC was entrusted with the mission of an international investment bank. With a strong shareholder background, the investment banking business indeed became the company's trump card business and pillar business. However, due to being too focused on investment banking, CICC does not have the advantage in both brokerage and asset management businesses, leaving the company in a rather embarrassed position in the A-share market, where overall strength is now dominant.

In the analyst's view, the business is too single is an important reason for the decline of CICC. "After the financial crisis in 2008, A-share IPO went stop-and-go, which was fatal to CICC, which is dominated by investment banking. Ordinary brokers could make up for brokerage, asset management and channel businesses This vacancy. "Financial commentator Chen Jianwei told Beijing Commercial Daily reporter said.

Here, the big bull market of A shares in 2006-2007 was one of the things to be mentioned. At that time, the stock market in China was virtually universal and the number of retail investors exploded. As a result, a number of brokerage firms specializing in retail brokerage business . Although CICC also has a brokerage business, the company is mostly engaged in cross-border brokerage business such as the US stock exchange business and exchange-traded fund business. Most of the institutions accepted are QFII (Qualified Foreign Institutional Investors) Bureau restrictions. So other brokers have emerged, CICC began panic.

Perhaps aware of its own situation, CICC started to gradually develop other businesses. In recent years, the company has stepped up its investment in brokerage business, asset management, fixed income, research, direct investment and self-support business, initially forming an integrated business system. However, up till now, apart from the investment banking business, CICC's other businesses are only unsatisfactory. According to the statistics compiled by the Securities Association of China, CICC's net income from agency securities trading was 854 million yuan in 2013, ranking 24th in the industry. Galaxy Securities, Guotai Junan and CITIC Securities Securities, ranked No. 1 in Galaxy Securities brokerage business revenue of 3.909 billion yuan, a huge difference between the two; in asset management business in 2013, CICC entrusted customer asset management business net income of 1.48 billion yuan, ranking 14th in the industry Bit, and ranked No. 1 Guotai Junan still 449 million yuan gap.

In response to the downturn of CICC, Chen pointed out: "Another sign of the decline of CICC is that many heavyweights have left their influence in the industry weakened. Brokers can do research and sell the results to fund companies and then ask Sub-positions, in exchange for brokerage commission income, and CICC on the brokerage business is not very important, so the decline of the company's Institute is normal. " According to reports, CICC three star generals - fixed income research group researcher Xu Xiaoqing, electronics industry analyst Zhao Xiaoguang and cultural communications industry analyst Jinyu, both left in 2013.

Transformation is not firm missed the good opportunity

In fact, if CICC can make a firm transition in the past, it may not be reduced.

Take the investment banking business as an example. If CICC is willing to make a transition, it may take a short break and reduce fees to undertake small-scale IPO projects. The location of its investment bank may not be easily surpassed by securities firms such as CITIC Securities, Guotai Junan Securities and Guosen Securities. Data show that in 2011-2013, CICC successfully sponsored only seven listed companies, namely Zhejiang Energy, Midea Group, Loncin General Motors, Guangzhou Automobile Group, Jiyi Technology, Xinhua Insurance and Phoenix Media, are not the scale Small project.

In the investment banking business transformation, Chen Jianwei believes that CICC did not really do well in overseas underwriting. "Although there are not many domestic IPOs in these two years, there are not many projects going overseas, but these projects are basically taken away by Hong Kong and foreign securities companies. CICC did not grasp this opportunity at all. You can use this to develop your own overseas underwriting business, for example, by helping companies such as Jingdong Mall go overseas to increase their experience in overseas capital operation, and finally to feed back the overseas capital operation of state-owned capital, "pointed out Chen Jianwei. In this regard, some market participants think that CICC may have wanted to change its thinking for a long time, but it has the common problems of state-owned enterprises. It may be difficult to reach a consensus on decision-making. As a result, the transition of investment banking business is not firm.

In brokerage business, CICC has not expanded its retail brokerage business in six years since its establishment in 2003 in Beijing, Shanghai and Shenzhen. Until 2009, CICC continued to set up a business division. However, by 2013, CICC only has 17 securities branches in total, which is still far behind the investment brokerage business of the investment bank in 2013: There are 204 securities branches in CITIC Securities and 195 in Guotai Junan Securities Sales Department, CSC There are 175 securities sales department, Guoxin Securities 84 Securities Sales Department. Some analysts pointed out that CICC brokerage business did not broaden the road, but also partly because of the lack of determination will be transformed, so missed the development opportunity. "In 2007, CCB Investment intends to merge the two brokerages below it to allow CICC to absorb CIC Securities, but CICC is said to be hesitant about this at that time and the final transaction was not facilitated. The number of securities sales offices of CIC Securities More, which could make up for CMB's shortcomings in this area. "An industry official said.

The scarcity of securities business department directly leads to the limited development of CICC's brokerage business. In 2013, when the revenue from brokerage business of Guosen Securities and Guotai Junan both exceeded RMB3.6 billion, more than four times of their investment banking revenue, CICC's brokerage income only amounted to 1.08 times of that of investment banking business, which clearly reflects CICC's weakness in brokerage business.

Beijing Commercial Daily reporter Ye Long trick / text