The top management of Huaxing Securities has undergone tremendous changes, and the dilemma of consecutive losses in performance still needs to be solved

Photo source: Visual China

Blue Whale News, February 28 (Reporter Hu Jie)Blue Whale News reporter noticed that recently, the chairman and general manager of Huaxing Securities, a subsidiary of Huaxing Capital, have both been revitalized. Wang Lixing, CEO of Huaxing Capital, has become chairman of the company. Ma Gang, former deputy general manager and head of the retail business department, has become general manager. Xiang Wei, former chairman and general manager, has left office.

Wang Lixing and Ma Gang are senior officials in the fields of investment banking and wealth management respectively. Huaxing Securities may also intend to strengthen the two-wheel drive strategy of large investment banks and large asset management wealth.

Another industry insider pointed out that when Wang Lixing stepped up to take charge of Huaxing Securities, shareholder control was strengthened, which may also highlight the importance of Huaxing Securities in the Huaxing Capital business sector in the next stage.

However, in 2022 and 2023, Huaxing Securities ‘net profit was-152 million yuan and-99 million yuan respectively. In the first half of 2024, the company’s net profit was-42 million yuan. Under successive losses, subsequent performance growth and pressure to turn losses are still considerable.

The two new coaches are from investment banking and wealth fields respectively

Recently, Huaxing Securities announced that after review and approval by the company’s board of directors, Wang Lixing was elected as chairman and Ma Gang was appointed as general manager of the company.

According to his public resume, Wang Lixing graduated from Tsinghua University in 2007 with a bachelor’s degree in automotive engineering and a master’s degree in information and communication engineering. He joined Huaxing Capital in investment banking in the same year. During his career, Wang Lixing focused on technological innovation and high-growth fields, explored many well-known companies, and his investment performance was quite eye-catching.

Ma Gang, the new general manager, has been promoted from deputy general manager. He has 30 years of cross-cycle practice experience and has made great achievements in the field of wealth management. His career began at Guotai Junan Securities. He has served as general manager of the Internet Finance Department and later moved to Zhongshan Securities, Aijian Securities, etc. Since March 2021, he has joined Huaxing Securities as deputy general manager. Ma Gang led the team to independently develop Huaxing Securities Duojin APP and fully digital wealth operation system.

Overall, the employment logic of the new leadership team matches the investment banking and asset management wealth strategies being implemented by Huaxing Securities. Both senior executives have strengths. As early as 2021, Huaxing Securities proposed a two-wheel drive strategic plan for large investment banks and large asset management wealth. This deployment may be intended to release and strengthen the above strategic signals.

Another person close to the company also told reporters that Huaxing Securities ‘management change was more obvious, but the company’s internal strategic direction had not changed significantly.

In an interview with Blue Whale News, the relevant person in charge of Huaxing Securities said that in terms of large investment banks, the company will seize market opportunities, integrate shareholder resources, deepen the technology track, use professional investment banking capabilities to link technology and capital, and create a new economy led by technology. investment bank; The large-scale asset management wealth business serves residents ‘wealth management needs, has established a fully digital wealth operation system, focuses on ETF index fund services, and creates buyer investment characteristic scenarios. Recently, it has also completed the localized deployment of DeepSeek, the AI model. This deployment will focus on completing the in-depth integration and transformation of business processes to achieve the transformation and upgrading goal of intelligent business, and will also improve the quality and efficiency of the wealth management business.

Successive performance losses need to be reversed, and shareholder Fang Huaxing Capital strengthens control

It is worth mentioning that Wang Lixing, the new chairman of Huaxing Securities, is also the new CEO of its shareholder Huaxing Capital.

Huaxing Capital was once called a unicorn promoter in the industry. Since 2023, due to the investigation of founder Bao Fan and changes in the market environment, the company’s performance has suffered a major impact.

According to Huaxing Capital’s 2023 annual report, the total income and net investment income during the reporting period were approximately 800 million yuan, a year-on-year decrease of approximately 50%, and a net loss attributable to the parent company was 472 million yuan. In addition, the personnel structure has also been proactively adjusted. As of the end of the reporting period, there were 566 employees, a year-on-year decrease of 25%. The 2024 interim report shows that in the first half of the year, the company achieved total revenue and net investment income of 360 million yuan, a year-on-year decrease of 39%; the net loss attributable to owners of the company was RMB 74 million yuan. At the end of the reporting period, there were 521 employees, compared with the end of 2023. 8% reduction.

Judging from the layout of Huaxing Capital’s business segments, Huaxing Securities’s revenue accounts for about one-third of its total. In 2023, Huaxing Securities ‘annual total revenue and net investment income will reach 261 million yuan, a year-on-year increase of 27%, accounting for 33% of the group’s total revenue and net investment income. During the same period, the total income and net investment income of the group’s investment banking business and investment management business were 192 million yuan and 270 million yuan respectively, down 54.5% and 68.1% respectively from the previous year.

Industry insiders pointed out that now that Wang Lixing is now in charge of Huaxing Securities, shareholder control has been strengthened, which may also highlight the importance of Huaxing Securities in the Huaxing Capital business sector in the next stage.

However, judging from the profitability of Huaxing Securities in recent years, the pressure on subsequent performance growth is still considerable. In 2022 and 2023, Huaxing Securities achieved operating income of 188 million yuan and 254 million yuan respectively, while net profit suffered consecutive losses of-152 million yuan and-99 million yuan respectively.

Nowadays, through the adjustment of core executives ‘deployment and then transmission to the performance side, Huaxing Securities may need more patience to open up various business lines to coordinate and get out of the dilemma of turning losses. (Blue Whale News Hu Jiehujie@lanjinger.com)