Since 2015, small and medium-sized securities firms in the industry have been trying to leverage the business of the entire company through the pivot point of the research institute.
Today, another small and medium-sized securities firm is entering the sell-side research industry.According to people familiar with the matter, Huang Fusheng, president of the Pacific Securities Research Institute, will join China Post Securities as the director of the research institute.
It is also understood that China Post Securities Research Institute is still looking for the positions of chief executives of various industries and sales directors of various districts.
China Post Securities will focus on research institute business
Today, a person familiar with the matter told reporters through WeChat that Huang Fusheng, president of the Pacific Securities Research Institute, will join China Post Securities as the director of the research institute.The reporter also confirmed the news from other sources.
It is also understood that China Post Securities Research Institute is currently recruiting for the positions of industry chiefs and regional sales directors in Beijing, Shanghai and Shenzhen.
According to public information, Huang Fusheng holds a doctorate in economics. Since 2017, he has served as the dean of the Pacific Securities Research Institute and the chief food and beverage industry analyst.From 2008 to 2017, during his tenure at CITIC Securities, he won several awards such as the Best Analyst of New Fortune.
Judging from Huang Fusheng's WeChat public account, the last time he released the relevant research report of Pacific Securities was on May 14 this year.
Image source: Screenshot of China Post Securities 2021 Annual Report, the same below
According to the 2021 annual report of China Post Securities, China Post Securities is a securities company registered in Xi'an. It was established in 2002 and its predecessor was Xi'an Huahong Securities Brokerage Co., Ltd.In history, it has experienced 5 times of capital increase and share expansion. At present, the three shareholders are China Post Group Co., Ltd., China Post Capital Management Co., Ltd., and Xi'an Investment Holdings Co., Ltd.
In 2021, China Post Securities will realize a revenue of 663 million yuan and a total profit of 184 million yuan. The wealth management business is currently the most reliant business of the company.In terms of total profit alone, the scale of China Post Securities last year was almost the same as that of Pacific Securities.
At present, China Post Securities has set up 18 headquarters departments, including research institutes.However, according to the data disclosed by the Securities Association of China, there are only 5 analysts currently employed by China Post Securities.Last year, the commission scale of China Post Securities was only more than 2 million yuan.In contrast, the analyst scale of the Pacific Securities Research Institute can be ranked among the top 30 in the industry, and the commission scale of split positions last year reached 136 million yuan.
Since his resignation from CITIC Construction Investment in 2017, Huang Fusheng has joined small and medium-sized securities firms in the western region.It is worth mentioning that two other small and medium-sized brokerages, Kaiyuan Securities and Western Securities, also registered in Xi'an, have been developing sell-side research in recent years.
How can small and medium-sized securities companies break through in the sell-side industry?
Since 2015, small and medium-sized securities firms in the industry have been trying to leverage the business of the entire company through the fulcrum of the research institute, including Pacific Securities.Taking this year's industry trends as an example, in addition to China Post Securities, securities companies such as Caitong Securities and Huafu Securities have also begun to develop research institute business.
According to the information disclosed by the association, Huang Fusheng officially joined Pacific Securities in March 2017, and Pacific Securities also began to increase its sell-side research business in early 2017.
In the following two years, through continuous investment in human resources, Pacific Securities’ commission sub-position ranking has gone from unknown to the top 30 in the industry in 2018 and 2019, and its research business has improved significantly.
However, in the past two years, the rapid rise in the ranking of Pacific Securities' commissions has begun to hit the "ceiling".In 2019, the company ranked 27th in the industry in terms of commission distribution, dropped to 29th in 2020, and further dropped to 34th in 2021.During this period, open-source securities, Zheshang Securities and other sell-side research institutions that have risen rapidly in the past two or three years have begun to replace the original position of Pacific Securities.
At the same time, in recent years, the Pacific Securities Research Institute has also experienced the phenomenon of brain drain.According to Choice data, at the end of 2019, Pacific Securities had a total of 59 analysts, which increased to 61 at the end of 2020, but fell to 52 at the end of 2021.As of now, the company has 47 analysts.Some of the former industry chiefs of the Pacific Securities Research Institute have also switched to other brokerages.
Although the sell-side research industry of securities companies has been surging in recent years, and various princes are competing to appear, in addition, the growth of public funds has also brought new opportunities to the sell-side research industry, but the top camps in the industry are still those old-fashioned brokers.According to the statistics of Choice, since 2016, the vast majority of the top 10 brokerages in the industry by commission distribution are still those with certain traditional advantages in the business of large-scale leading brokerages and research institutes.Although some small and medium-sized brokers can enter the top 10 in some years, their sustainability is not strong.
How can small and medium brokerages stand out in the increasingly competitive sell-side industry?Huang Fusheng said in an interview with the media about three years ago that even small and medium-sized securities firms should vigorously develop research institutes. There are two main reasons: First, the development of investment banking, brokerage and other businesses requires a certain accumulation of resources to develop research institutes. Some results can be achieved in the short term; second, the development of the research institute can bring huge dividends to the company's brand and the coordination of other businesses.
However, Huang Fusheng also soberly analyzed the pattern of the sell-side research industry in the interview.He mentioned that the size of the equity market for public funds has not expanded much in recent years, and the commission rate has declined, from a high of around 1,200 in the past to around 10,008 now, and some have dropped to 10,005.Therefore, the entire seller's cake has not become larger, but the number of people who divide the cake has increased.
