GF Securities "Re Start": Build The Management Committee Before The Restart Of Recommendation Business, Reshape The Organizational Structure Of Investment Banks

Guangfa Securities, which was heavily punished for the fraud case of Kangmei pharmaceutical, made a major adjustment to the relevant organizational structure during the "suspension" period of its investment banking business.

Recently, GF Securities announced that the company's investment bank will cancel its investment banking business management headquarters and investment banking department, and establish an investment banking business management committee. After the adjustment, the investment banking business management committee has six first-class departments, related industries and regional business groups.

"GF Securities should also take advantage of the suspension of investment banking business to adjust its structure and establish an investment banking business management committee. It is easy to make up for the missed business development period after the punishment period. A large domestic securities firm investment banking business head said.

Prior to that, on July 10, the CSRC issued a prior notice to the administrative department on the illegal operation of GF Securities in the investment banking business related to Kangmei pharmaceutical, and planned to take the control measures of suspending the qualification of sponsor for 6 months and not accepting the relevant documents of bond underwriting business for 12 months. According to this calculation, GF Securities will be able to restart the recommendation business in January next year.

Follow the example of head securities companies to build management committee structure

"After the news of the establishment of the investment banking business management committee of Guangfa came out, I felt familiar, basically the same as the current investment banking structure of CITIC Securities," said an investment banker close to CITIC Securities.

According to the reporter of 21st century economic report, in the "Three China and one China" which occupy the head of the investment banking business of securities companies, CITIC Securities, China Securities construction investment and Huatai United Securities all adopt the structure of "investment banking business management committee".

Among them, the Management Committee of CITIC Securities Investment Bank consists of bond underwriting business line, asset securitization business line, merger and acquisition business line, stock capital market department, debt capital market department, quality control group, talent development center, operation Department and other departments / business lines, as well as various industry groups and regional business divisions.

The newly established investment banking business committee of GF Securities has six first-class departments under its jurisdiction, including investment bank comprehensive management department, investment bank quality control department, capital market department, strategic investment banking department, merger and Acquisition Department, bond business department, as well as related industries and regional business groups. The organizational structure is highly similar to that of CITIC Securities.

The investment bank's management department is close to the management department of the investment bank. "The establishment of the investment bank management committee should mainly focus on reducing the intermediate level, in addition, there are also considerations of strengthening internal risk control.".

After receiving the relevant regulatory measures of Guangdong securities regulatory bureau for 12 months, they were informed by the securities regulatory agency of Guangdong securities regulatory agency that they had not accepted relevant regulatory measures for 12 months.

Meanwhile, six relevant personnel including Ouyang Xi and Qin Li, then vice presidents of GF Securities, were also taken administrative and regulatory measures, such as public condemnation and regulatory talks. Eight persons directly in charge of investment banking projects were fined not to hold relevant posts in bond underwriting business of securities companies or actually perform the above duties within 20 years.

In this context, GF Securities also said that the organizational structure adjustment of investment banking business will further strengthen the internal control mechanism of the company's investment banking business, and strengthen the overall compliance management and comprehensive risk management of the investment banking business.

Some senior investment banks in Beijing said that from the perspective of development, the investment banking businesses such as stocks, bonds, mergers and acquisitions, and the third board, which were originally in charge of by different leaders, are now under the unified management of one leader, so as to strengthen the coordination among various businesses.

Planning the layout after business recovery

Compared with grasping internal risk control, for the adjustment of investment bank structure of GF Securities, the market thinks that it is overtaking after planning business recovery.

"It's not easy to get up again after business suspension. Southwest Securities, which was suspended from investment banking business before, is an example. Guangfa Securities is also facing the same situation as southwest China in the past few months. The project has been robbed and the personnel are running away. ". The senior investment banks in Beijing said.

According to the statistics of 21st century economic report, as early as July this year, before GF Securities was issued the notice of administrative supervision measures, there were 23 IPO projects under review, including 14 main board and small and medium-sized board, 6 gem and 3 sci-tech innovation board. In addition, GF Securities also holds 66 companies to be listed on the stock exchange market.

According to the public information, the three listed companies recommended by GF Securities have been divided into Huatai united and Zhongtai securities. On the gem, except for Shenzhen Jingtai Co., Ltd., which voluntarily withdrew its IPO application, other IPO projects have also been lost.

However, in the main board market and the small and medium-sized board market, GF Securities has left a "spark". Weihai Lily Biotechnology Co., Ltd., which plans to list on the main board, and Sichuan Langjiu, which plans to list on the SME board, are still sponsored by GF Securities. Both enterprises are new projects to be declared in 2020, and they can be listed again after the ban on investment banking business of GF Securities is lifted.

What's more, according to wind data, as of November 11, Guangfa Securities still held 58 enterprises to be listed, which were in the acceptance stage of guidance, filing and registration, and the decline was not obvious compared with that before the company was punished. Its project reserve ranks 12th in the industry, even ahead of CICC.

However, a careful analysis of the data shows that only 10 of the projects submitted for approval by GF Securities will receive counseling after 2019. In contrast, CICC has 32 enterprises in 2020 annual report review alone, and there are 43 more in 2019 and 2020.

However, in terms of investment banking talents, GF Securities still has a certain scale. According to the statistics of the Securities Industry Association, as of November 11, Guangfa Securities had 174 sponsor representatives, only 3 less than before the punishment in July. All of them were "old people" who joined the company in 2019.

"After the case of Kangmei pharmaceutical was determined by the CSRC, the staff began to lose, and there should be 200 Baodai by the end of last year.". Some people close to GF Securities said.

Limited business development will inevitably affect the company's performance. In the first three quarters of 2020, with the support of asset management business, GF Securities achieved a net profit of 8.14 billion yuan, ranking fifth in the industry. However, investment banking business income decreased by 33.25% over the same period. Among the 40 listed securities companies, it ranked 20th, down 10 places from the same period last year. Among them, the company's investment banking income in the third quarter was even more obvious, with a sharp drop of 53% to 170 million yuan.

The research department of Tianfeng securities also said that in view of the asset management business exceeding expectations, it raised the profit forecast of GF Securities in 2020 by 3.6% to 10.39 billion yuan. However, considering the continuous impact of investment banking business, the company chose to reduce the company's profit forecast in 2021 by 1.9% to 11.34 billion yuan.

"On the whole, compared with the successive" stepping on thunder "of Southwest Securities Investment Bank, its business has been suspended for nearly three years. The suspension of the sponsor's qualification for six months is still acceptable for the relatively strong GF Securities. It is easy to centralize resource management, reserve resources as soon as possible, and it is not impossible to restart business quickly after the suspension period. China's medium-sized securities companies non bank analysts said.