Can Overseas Business Of Frequent Stepping On Thunder Add Points To The Classification Evaluation Of Haitong Securities?

The 21st century economic report's insiders' office has learned that the classification and evaluation of securities companies in 2020 has been started recently. At present, China Securities Regulatory Bureau has issued a self-assessment notice to the securities companies in its jurisdiction, and the securities companies should complete the self-assessment work before July 17.

Among them, the proportion of securities companies' classified evaluation of a, B and C categories has been adjusted from 40%, 50% and 10% of last year to 50%, 40% and 10% of this year.

The self-assessment of securities companies may refer to the regulation on classification of securities companies revised by the CSRC recently. Under this scoring rule, some institutions have measured that the bonus points of Huatai Securities, Guotai Junan, CITIC Securities, CICC, Guangfa Securities, Haitong Securities, CITIC construction investment, and China Merchants Securities are all over 10 points.

According to the statistics of Shenwan Hongyuan, in the evaluation sections of operating income, brokerage business, underwriting and recommendation, financial consultant, asset management, institutional trading, wealth management, profitability and it investment, many securities companies can get more or less scores. Only in the overseas revenue sector, only Haitong Securities, CICC, CITIC Securities and Huatai Securities can get more or less scores Bonus points.

Among them, Haitong Securities and CICC added 1 point respectively; CITIC Securities and Huatai Securities added 0.5 points respectively.

The rules for calculating the bonus points are from the "securities company classification regulation" that "if the securities business income of the overseas subsidiaries of the securities company accounted for 30%, 20% and 10% of the operating income in the previous year, and the business income was above the industry median, 2 points, 1 point and 0.5 points would be added respectively".

Looking at the operating data of securities companies in the whole market in 2019, the top five securities business revenues of overseas subsidiaries in operating revenue in 2019 are: Haitong Securities (26.12%), CICC (24.50%), CITIC Securities (11.09%), Huatai Securities (10.75%) and Cinda securities (9.39%).

At the beginning of its establishment, it has been a representative of overseas securities companies since its establishment.

In contrast, Haitong Securities, which lacks the "Chinese" prefix gene, will surpass CICC in the proportion of revenue of its overseas subsidiaries in 2019, which means that it will catch up with the rest of the world. In 2019, with Haitong international as the main carrier of overseas business, Haitong Securities has made good achievements in many sectors.

Taking Haitong's investment banking business as an example, Haitong international has completed 49 IPO projects and 58 equity financing projects in the global market, 44 IPO projects and 48 equity financing projects in the Hong Kong market, both of which rank first in all investment banks in Hong Kong.

In addition, Haitong international participated in the IPO project of lucky coffee, becoming the second largest IPO of Asian companies on NASDAQ last year. In this project, another joint sponsor of the Chinese investment bank is CICC.

Behind the full achievements is the radical expansion of Haitong Securities.

Fortunately, Gaorui's IPO project was regarded as a fake achievement at the beginning of the year. As the main underwriters, Haitong international and CICC were pushed into the air of public opinion.

In fact, it is not only the investment banking department that will bear the corresponding responsibility in this fraud incident, but also the research department's comments on Ruixing coffee show that the research department serving the secondary market has some "cooperative support" for the investment banking department serving the primary market.

Some people from securities companies believe that "it is not that the secondary departments can not cover the company, but the report itself does not show that there should be some rigor, which is more like" cooperation ". Theoretically speaking, the primary and secondary business of securities companies should be isolated by firewall

In addition to Ruixing coffee, since 2019, Haitong international has stepped on a number of companies, including leihanneng group, Xingmei holding, China smart energy, Ping An Securities Group holding, etc., including stock slump, bond default, etc. These parts show that Haitong Securities has some weakness in risk control while expanding overseas business at a high speed.

"Although securities companies are encouraged to develop overseas business, local securities companies may be slightly radical in developing overseas business, and it may not be very appropriate to add points to the classification evaluation of securities companies only from the operation results. Last year, the overseas business of a securities company stepped on thunder, and the bonus of the whole department was cancelled. However, at present, the media and supervision still pay relatively little attention to the overseas business of the securities company, so there is no special discussion. " The above securities dealers said this analysis.