Guolian Minsheng Securities integrates into the “deep water zone”: Xu Chun, a leading officer of the research institute, crosses investment banks and faces the challenges of performance and compliance

(Photo source: Visual China)

Blue Whale News, February 22 (Reporter Wang Wanying)As a fast horse in the new round of mergers and acquisitions by securities firms, Guolian Minsheng Securities (601456.SH) has been established, and internal integration is advancing at full speed.

The reporter learned that the renamed Guolian Minsheng Securities has completed the first round of mid-level personnel adjustments, involving multiple functional departments, and the layout of the 1+5 leadership group + special working group has been unveiled. Among them, the leader of the investment banking business integration coordination group is Xu Chun, vice president of Guolian Minsheng Securities. It is reported that Xu Chun may also serve as the chairman of the investment bank subsidiary.

This is also regarded as a major highlight of this personnel adjustment. ldquo; Xu Chun, a post-85s research institute, has been parachuted into investment banks, and the span is not huge. Why Xu Chun? There are also some opinions in the industry. For example, from the perspective of overall business, Xu Chun’s withdrawal from the management of the research institute not only solved the original problem of the League of Nations People’s Livelihood Research Business, but also retained Hu Youwen, the tough player of the In terms of promoting investment banking business integration, its airborne status has no interest implications, and it can be more liberal in management during the integration period and implement drastic implementation.

However, the integration of the investment banking business of the two institutions clearly poses many challenges. The first is the performance pressure faced by top investment banks. In the past two years, Minsheng Securities ‘underwriting and sponsorship income has continued to decline, and the number of IPOs reserved is also in short supply compared with previous years. Secondly, the investment banking practice quality of Minsheng Securities has been rated as the worst Class C by the China Securities Association for two consecutive years, and it has frequently received regulatory fines, making its stubborn disease difficult to eliminate. Huaying Securities, an investment banking subsidiary of Guolian Securities, has also been subject to regulatory penalties many times. There is much room for improvement in quality and compliance. In addition, in the current market environment, whether there are too many people after the business is merged and how to adjust and optimize the structure are all testing this young executive.

Finalize the first round of mid-level personnel changes

The series of personnel appointments and subsequent business adjustments after the integration of Guolian Minsheng Securities have been the focus of market attention.

The first is how to develop the business after business integration? From an overall structure perspective, Guolian Minsheng Securities ‘research and self-operated businesses will be developed under the main body of the parent company, and investment banking, wealth, and asset management businesses will all operate independently in the form of subsidiaries.

The reporter learned that Guolian Minsheng Securities has established a leading group and five special execution teams to promote integration matters. The leading group is responsible for overall coordination and decision-making, and the execution teams focus on wealth management, investment banking, research, asset management and information technology (IT) fields.

In terms of the leadership group, Gu Wei, Secretary of the Party Committee of Guolian Securities and Chairman of Minsheng Securities, Ge Xiaobo, Chairman and President of Guolian Securities, served as the team leader, Wang Jinling, Chairman of the Executive Committee of Minsheng Securities and in charge of the Human Resources Headquarters, and Xiong Leiming, President of Minsheng Securities, served as deputy team leaders.

The leaders and deputy leaders of the five special groups are respectively the leaders of each business line of Guolian Securities and Minsheng Securities. Looking at it one by one, the wealth management business integration coordination group is headed by Gu Wei and Ge Xiaobo, and Jiang Xiaolin and Liu Hongsong serve as deputy leaders. Gu Wei and Ge Xiaobo directly came to focus on wealth, which shows that Guolian Minsheng Securities will focus on wealth management in its future development.

The investment banking business integration coordination group is headed by Xu Chun, and Zhang Mingju and Wang Shiping serve as deputy team leaders. Among them, Zhang Mingju is co-president of the investment banking division of Minsheng Securities and Wang Shiping is president of Huaying Securities.

The research business integration coordination group is headed by Hu Youwen, and Li Minjie and Bao Chengchao serve as deputy team leaders, responsible for the integration of research businesses. Among them, Hu Youwen is the vice president and dean of the research institute of Minsheng Securities, and Bao Chengchao is the deputy general manager and chief strategic analyst of Guolian Securities Research Institute.

The asset management business integration coordination group is headed by He Wei, general manager of Guolian Asset Management, and Zhao Ye serves as deputy leader.

The IT integration coordination group is headed by Wu Zherui, President of Minsheng Securities Information Technology Center, and Huang Wei serves as deputy leader.

Although the big framework has been initially finalized, the integration process has sunk to the employee level one by one, and there are still many problems that need to be faced and solved.

For example, will the number of people be more saturated after the merger? Information on the official website of the China Securities Association shows that currently, there are 2245 employees in Guolian Securities (excluding Guolian Asset Management) and 2825 employees in Minsheng Securities, and the number has exceeded 5000. Moreover, if personnel in each business line overlap, who will go and who will stay? It is also not ruled out that it will speed up intaglio or activate the horse racing mechanism.

Another example is that at the salary level, Guolian Securities is a local state-owned enterprise, and Minsheng Securities was originally a private enterprise. The salary systems of the two are different. Taking the per capita salary in 2023 as an example, Wind data shows that the per capita salary of Minsheng Securities that year was nearly 700,000 yuan, while Guolian Securities is just over 400,000 yuan. After the merger, the salary will be closer to the system. Whether the average salary of the former Minsheng Securities employees will be lowered or whether it will lead to a certain loss of personnel will test the management’s disposal methods and management wisdom.

Zhi Peiyuan, vice president of the Listed Company Investment Professional Committee of China Investment Association, pointed out in an interview with reporters that the most important thing is to let outstanding talents see the space for growth, clarify promotion standards, and continue to provide diversified career development paths and upward channels, and do a good job in anticipatory management. In addition, additional rewards can also be given to core positions and outstanding personnel with outstanding contributions to increase employees ‘sense of gain. rdquo;

“Potential stock Xu Chun cross-border investment bank

Among several groups of personnel deployments, investment banks are the focus. Why did Xu Chun, who came from a research institute background, cross the border?

In terms of business integration, investment banks are the highlight of Guolian Minsheng Securities. Minsheng Securities is known for its investment banking business and ranks relatively high in the market. Guolian Securities has also continued to develop its investment banking business in recent years. According to conventional thinking, to do 1+ 12, experienced investment banking veterans will be used, but judging from the actual personnel actions, this is obviously not the case.

Some industry insiders told reporters bluntly that they did not expect it, but when they delved deeper into it, they had their own logic.

Xu Chun is a post-85s post-85s general, vice president of Guolian Securities, administrative head of the research institute, and was once the director of the youngest securities research institute in China. He joined Changjiang Securities in 2011 and served as the leader of the industry research team and deputy general manager of the research institute. In 2018, he was promoted to director. From 2014 to 2020, he successively won the first place in the home appliance industry in the New Fortune Best Analyst selection. In 2023, Xu Chun moved to Guolian Securities and became the company’s vice president at the age of 36. It can be seen that in the research field, Xu Chun’s career has been smooth, which is also the reason why he is recognized and continued to be reused.

Another industry insider pointed out to reporters that Xu Chun’s research background is also a bonus in the current trinity strategy of investment + investment banking + investment research.

However, judging from the comprehensive internal environment, this employment may have deeper considerations. Xu Chun is in charge of investment banking, which can break the pattern of three tigers in one mountain in the research institute. Earlier, Xu Chun, Yang Yehui, co-director of the Guolian Securities Research Institute, and Hu Youwen, vice president and director of the Institute of Minsheng Securities, were well-known figures in the research field. Xu Chun’s transfer to an investment bank will not only further open up room for career advancement, but also stabilize the relevant team of Minsheng Securities Research Institute. In addition, the reporter noticed that Yang Yehui’s practice institution had been changed to Huaying Securities in September 2024, or he might also bid farewell to the research business and continue to cooperate with his old partner Xu Chun in investment banking business management.

In addition, as a cross-industry airborne leader, Xu Chun is more liberal in management during the integration period.

“As a cross-border leader, Xu Chun’s advantage lies in his deep research foundation, his ability to keenly capture market trends and industry dynamics, provide accurate research support for investment banking business, and improve the foresight and success rate of projects. At the same time, his accumulated connections in the research field and influence of listed companies will also help expand investment banking business channels, including mergers and acquisitions. rdquo; Zhi Peiyuan pointed out.

A senior investment bank official further told reporters that from the perspective of industry characteristics, the barriers to investment banks are not high. Xu Chun is at a higher level and does not require excessive professional skills at the executive level, but mainly tests management capabilities. Affected by the market environment, IPOs are currently tightening, investment banks have limited room for incremental development, and the focus is still on internal integration issues. Judging from the current situation of the people’s livelihood of the League of Nations, internal integration or facing multiple issues such as personnel optimization and adjustment and salary cuts also requires clear goals and no interests involved. Xu Chun, a cross-industry leader, can not be bound by the original department or team, so that it can be better to implement it. rdquo;

Investment bank compliance issues need to be rectified urgently

However, judging from the current situation of the investment banking business of Minsheng Securities and Huaying Securities, an investment banking subsidiary of Guolian Securities, Xu Chun also faced many thorny problems when taking office, and it is inevitable that he will be drastic.

The first is performance pressure. The market gave Guolian Minsheng Securities high expectations for the investment banking business merger, saying it would attack the top investment banks and break into the top ten in the industry.

However, since 2023, with the sharp decline in the number of newly listed companies, the IPO performance of brokerage investment banks has generally shrunk significantly. In terms of Minsheng Securities, underwriting and recommendation revenue continued to decline. In 2023, the number of IPO companies successfully sponsored by Minsheng Securities will be 20, with a total underwriting of over 20 billion yuan, and underwriting and sponsorship income of 1.599 billion yuan. In 2024, Minsheng Securities only sponsored 6 IPO companies to list, raising a total of 3.896 billion yuan, a year-on-year decrease of 80%, and underwriting and sponsorship revenue totaled 274 million yuan, a year-on-year decrease of more than 80%. At present, there are only 9 IPO projects left in the reserve of Minsheng Securities, and the number of projects under review on the Science and Technology Innovation Board is zero. After successive withdrawals, the number of reserve projects has begun to be in short supply compared with previous years. In 2024, there were 4 IPO sponsorship projects for Huaying Securities, all of which were withdrawn last year, with a withdrawal rate of 100%, and there were no projects under review.

The second is practice quality and business compliance. The practice quality of Minsheng Securities’s investment bank has been rated as the worst Class C by the China Securities Association for two consecutive years. In 2024, its bond business and financial advisory business will also be rated as Class C. In that year, its investment banking business received more than 10 fines. Huaying Securities was also subject to regulatory penalties many times last year for failing to fulfill its responsibilities in project supervision.

Jiang Han, a senior researcher at Pangu Think Tank, pointed out that the integration of compliance issues between the two investment banks is likely to have an impact on the regulatory rating of the new institution. When assessing the rating, regulators will comprehensively consider the new institution’s past compliance record and existing compliance hidden dangers may pull down the rating. rdquo;

Previously, some industry insiders pointed out to reporters that the merged Guolian Minsheng Securities may face potential risks and negative impacts caused by the legacy projects of Minsheng Securities. Supervision has repeatedly emphasized the principle of responsibility when reporting. Even if the sponsor project is finally terminated, the sponsor’s violations will be punished accordingly after verification. Therefore, the situation in Minsheng Securities ‘previous projects such as passing through difficulties and changing performance may lead to legal disputes and financial risks in related projects, causing unnecessary impact and financial losses to the merged company entities. These remaining issues may also affect the reputation and credibility of Guolian Minsheng Securities in the market and reduce the trust of investors and customers.

In addition, in terms of personnel, there are currently 332 insurance agents for Minsheng Securities and 63 insurance agents for Huaying Securities. The number of equity and bond investment banks of the two companies may be in the thousands. In the current market environment, are there too many personnel after the business is merged, and how to adjust and optimize the structure?

It can be seen that after Xu Chun took office, how to effectively strengthen the management of investment banking practice quality and business compliance and smooth transition of personnel teams is the top priority and the primary challenge that comes across borders. (Blue Whale News Wang Wanying wangwanying@lanjinger.com)