Reporter丨Han Lu Editor丨Tan Lu
Has it fallen out of the first echelon? Will it be profitable in the first quarter of this year? Is there any measure to turn losses into profits?......
At the results meeting on the morning of April 12, Zhou Jie, chairman of Haitong Securities, received many questions and has been at the helm for 8 years, and he has been under great pressure in the past two years.
Haitong Securities has seen its revenue and net profit decline for two consecutive years, especially in 2023, with a year-on-year cut of 84% in profit, and a loss of 3.4 billion yuan in the fourth quarter.
The peers are expected to increase the good news, and Haitong's decline is very conspicuous.
Since the release of the financial report at the end of March, its share price has fallen all the way, and as of the close of trading on the 12th, the market value has retreated to the 100 billion mark, a new low in more than three years.
Zhou Jie did not appear in the live broadcast of the performance meeting, but only expressed his position on the interactive communication platform, which will strengthen product capabilities and management capabilities, and effectively exercise the responsibilities of service providers, gatekeepers, and managers.
Consecutive fines
Since the beginning of this year, Haitong led by Zhou Jie has received fines in a row, mostly related to the quality of IPO projects.
In January, the two major exchanges issued "fines", giving Haitong regulatory talks and written warnings for a number of violations in the IPO project, circulating criticism of digital insurance agents, and three business leaders received regulatory warnings;
Source: Shenzhen Stock Exchange
In February, due to incomplete internal control of OTC options business, he was ordered to be punished by the Shanghai Securities Regulatory Bureau.
You must know that in November 2023, Haitong has experienced a round of "intensive punishment". The investment banking business is constantly negative, and investors are also asking sharp questions.
Zhou Jie responded on the platform that he would continue to deepen reform, improve the construction of internal control and defense lines, improve the accountability mechanism, and "be a good 'gatekeeper' of the capital market with a diligent and conscientious attitude".
The reporter's inquiry found that Haitong is indeed under a lot of pressure to be a good gatekeeper, and its IPO projects do frequently violate the rules, frequently step on the red line, and the relevant data is also a little embarrassing.
According to wind data, in 2023 and 2022, Haitong will voluntarily withdraw 23 and 16 respectively, with a withdrawal rate of 17.97% and 11.1%, both ranking first in the list of top brokerages.
Since 2024 alone, Haitong has withdrawn 5 IPO projects, namely Jingyang Technology, Kelide, PharmaLegacy Biologics, Belite Chemical, and Shengwei Electromechanical.
These have also affected the confidence of regulators.
The China Securities Regulatory Commission dynamically adjusted the "white list" of 8 batches of brokers, and none of Haitong entered the list.
The "white list" system has been implemented for three years, and it is mainly included in securities companies with standardized governance and operation and a high level of compliance and risk control, and entrants have some priority rights.
For example, some regulatory opinion requirements can be abolished, the process of issuing some regulatory opinions can be simplified, and the application qualifications for innovative pilot businesses can be obtained.
Haitong's management was slightly embarrassed that only one of the top 10 brokerages had never been selected for the white list, and the innovative pilot business was also rejected.
Earnings are sluggish
Zhou Jie and others are particularly under pressure because of the large decline in performance.
In 2023, Haitong's revenue will be 22.953 billion yuan, a slight decrease of one percent, and its net profit will be 1 billion yuan, a decrease of more than eighty percent.
A number of core business lines, such as wealth management, investment banking, asset management, etc., have declined to varying degrees, and only financial leasing is slightly better.
Among them, the income of securities brokerage business decreased, the largest segment of wealth management business, revenue of 8.315 billion yuan, down 12%, the amount of domestic and overseas IPO financing declined, and investment banking business also shrank by 14.8%.
Brokerages have the cyclical attribute of relying on the sky to eat, and most business callbacks are also normal. Compared with peers, the team led by Zhou Jie has some businesses that are actually good.
For example, although the compliance of investment banks is insufficient, they still completed 22 IPO projects throughout the year, ranking third in the market, especially 10 IPO projects on the Science and Technology Innovation Board, with a financing amount of 38 billion yuan, ranking first in the market.
In 2023, Haitong has successfully sponsored 6 of the top 20 companies in the whole market in terms of financing scale.
It's a pity that some businesses have poked a big basket for Zhou Jie and other management.
A typical example is Haitong International, with a net loss of 8.156 billion Hong Kong dollars last year, equivalent to 7.535 billion yuan, and in the past two years, Haitong's global chess piece has lost nearly 13 billion yuan.
At the earnings meeting, management blamed the loss on "factors such as financial market volatility and increased interest costs," but they nevertheless took action.
The top management decided to privatize Haitong International last year, and at the beginning of this year, it has completed its delisting.
Zhou Jie said that after the privatization is completed, Haitong International will be included in the group's matrix management structure, improve the integrated management and control of overseas subsidiaries, strengthen the empowerment of the headquarters, and promote its recovery.
"In the long run, if the delisting can reduce the burden of losses, it will improve the company's overall financial position. ”
Zhang Yue, chairman of Aoyu International, believes that Haitong's management needs to re-evaluate its overall strategy and business model to adapt to market changes.
Accelerate adjustments
Haitong Securities' water reversal is obviously not accidental.
Some analysts believe that some of its business losses are heavy, and it cannot stop losses in time when it fluctuates, that is, because the risk exposure is too large, which exposes the imperfection of its risk control mechanism and the negligent management of individual subsidiaries.
"To reverse the trend, Haitong Securities can carry out rectification and strategic adjustment from the dimensions of strengthening the compliance culture, improving risk control capabilities, and standardizing business operations. Yu Fenghui, a specially invited researcher at China's financial think tank, suggested.
The management led by Zhou Jie has taken action, especially to identify 2023 as the "Year of Consolidation of Compliance and Internal Control Culture" to enhance the allocation of compliance forces.
In June 2023, Haitong Securities appointed Zhao Huiwen as Chief Compliance Officer.
According to public information, Zhao worked as an accountant in China Railway Group, and later went to work in the China Securities Regulatory Commission, and worked in many departments such as the Inspection Bureau, the Issuance Supervision Department, and the Securities and Fund Institutions Supervision Department.
In March this year, Zhao Huiwen concurrently served as the general manager of Haitong's compliance management department, and transferred Xu Qi from the wealth management headquarters as deputy general manager.
At the same time, in response to the salary reform of the financial industry, Haitong also focuses on reducing costs and increasing efficiency.
Its employee salary has dropped from 784,500 yuan per capita two years ago to 494,000 yuan last year.
The remuneration of directors, supervisors and senior executives has also been reduced, and its total expenditure in 2021 will be 48.7268 million yuan, which has dropped to 23.7835 million yuan last year, a decrease of more than half in two years.
Haitong also expressed confidence in the adjustment of compliance, salary and other aspects.
At the results meeting on the 12th, the management said that the company will continue to implement share repurchases to boost market performance.
Since last year, it has implemented two share repurchase plans, with a cumulative repurchase amount of nearly 600 million yuan.
In terms of comprehensive capacity, Haitong's total assets exceed 750 billion yuan, net assets exceed 170 billion yuan, and a number of business lines, the industry is in the forefront, and its strength is still not to be underestimated.
It's just that if you want the market to pay, you have to come up with tangible performance in the end.
Image source: Haitong Securities, except for the annotations