Caitong Securities Co.Ltd(601108) investment banking business management changes in recent years have reshaped the investment banking culture and operation mechanism. In a recent selection, it has become the investment bank with the fastest progress in the industry, and the trained investment bank employees have also attracted the poaching of head securities companies.
“Civilians”, “soldiers” and “special forces” may be the most easily understood metaphor among many management concepts of CAITONG investment bank Caitong Securities Co.Ltd(601108) deputy general manager Li Jie told Chinese reporters of securities companies, “I understand that the essence of investment banking is how to create value for customers, make customers’ more ‘satisfied with our services and recommend new customers, as well as how to expand market share in the process of intensifying industry competition.”
Management creates value. In the fourth quarter of 2019, Li Jie began to reorganize CAITONG’s investment banking business through Caitong Securities Co.Ltd(601108) global talent recruitment. With the support of Zhejiang provincial Party committee, provincial government and company leaders, CAITONG investment bank began high-intensity talent training, designed a standardized investment bank work manual, and comprehensively strengthened business process management and team ability improvement. CAITONG investment bank spends more than 12 working days each year on training. It is one of the investment banks that pay most attention to employee training in the industry, realizing the synchronous expansion of team size and per capita efficiency. From 2019 to 2021, the ranking of Caitong Securities Co.Ltd(601108) investment banking net income rose from 34th to 25th, the scale of direct financing increased from 45.2 billion yuan to 71.7 billion yuan, and the IPO market share of state-owned enterprises in Zhejiang Province reached 40%.
high intensity training and standardized investment banking process
“Strategy is the overall situation and management is the details.” Li Jie said that the management logic is that when the company is at the bottom of the industry, it must determine a reasonable incentive mechanism, and then work around the essence of the industry through high-intensity standardized training and good team management to melt the customer-centered consciousness into the blood.
Public information shows that Caitong Securities Co.Ltd(601108) is a securities company affiliated to Zhejiang Province. Zhejiang provincial leaders and competent departments support Caitong Securities Co.Ltd(601108) to become bigger and stronger in an all-round way, realizing the development path of Caitong Securities Co.Ltd(601108) full license and collectivization, and providing a better development platform for the synergy between investment banking and collectivization.
The Chinese reporter of the securities firm learned that in terms of the incentive system, Caitong Securities Co.Ltd(601108) creates an incentive mechanism combining the assessment dimensions of “value creation, customer experience and practice quality”, pursues the combination of long-term expectation and openness and transparency, and enhances the sense of gain of all employees; In terms of capacity improvement, build a comprehensive and systematic capacity improvement system, and improve the comprehensive professional ability of the team through the whole chain of “recruitment, training and selection”; In terms of standard operation, we made a manual for investment banking business to improve the efficiency of standardized exhibition industry through a standardized and efficient standardized investment banking operation system; In terms of quality control, standardized and strict quality control evaluation system is adopted to promote the standardized practice of employees.
“We may be the only one in the industry to compile the backbone experience of investment banking into a standardized investment banking manual.” Li Jie further explained the growth path of CAITONG investment bank employees “civilians soldiers special forces”. Generally speaking, “civilian” refers to the ordinary project manager, who is the project manager whose contracting efficiency is at the average level of the industry; “Warrior” refers to a professional project manager, who is an excellent project leader and solution provider of trained investment banking projects; “Special forces” refers to the first-class project manager in the industry. They are important decision-makers involved in enterprise capital operation and excellent integrators of investment bank resources. Li Jie said that CAITONG investment bank hopes to train a group of such soldiers and special forces in three to five years, so as to improve the reputation of customer service.
Li Jie said that the work content of the investment bank is not mysterious. It is a work of “professional sales, on-site operation and considerate service”. The manual is to improve the work efficiency of the investment bank and establish a practical and effective differentiated competitive advantage through standardization, process and temsector. With the continuous maturity of investment banking business and team, the accumulation of experience, management tools, management system, management culture and division of labor and cooperation will be solidified as the basis for the “standardization” of team management, and more than 80% of investment banking work will be standardized. Finally, through the unified integrated management of investment banking, we will supervise and implement, strengthen the business support system of “big, medium and Taiwan”, and establish a standardized professional investment banking team.
jump out of the cycle of low price competition with professional services
China’s investment industry is far from entering the era of oligopoly. According to relevant data, the market share of the industry’s first brokerage investment bank is only about 10%, and more than 50% of IPO projects have changed their service teams during subsequent refinancing. Li Jie firmly opposes turning the investment banking business into a “stall business” of low-cost competition. He believes that the industry, especially the leading investment banks, need to deeply think about the value creation of the industry to China’s economic development, especially how to compete with internationally renowned investment banks, so as to help Chinese Enterprises improve their global competitiveness through value consolidation.
Li Jie believes that investment banks should pay more attention to the market and customer needs. Caitong Securities Co.Ltd(601108) , as a medium-sized securities firm, has achieved good results in investment banking in recent years. By the end of 2021, in terms of equity business, Caitong Securities Co.Ltd(601108) ipo and 14 projects reviewed by Beijing Jiaotong Stock Exchange (including joint lead underwriting), ranked the 20th in the industry and the top 3 in Zhejiang Province; 31 counseling and filing projects (25 IPO projects and 6 Beijing stock exchange projects), ranking first in Zhejiang jurisdiction. In terms of creditor’s rights business, Caitong Securities Co.Ltd(601108) 2021 issued 101 corporate bonds and corporate bonds with an underwriting amount of 60.241 billion yuan, ranking 19th in the industry and top 3 in Zhejiang Province At the same time, the underwriting amount of corporate bonds ranked 10th in the industry, and the underwriting amount of private bonds ranked 13th in the industry.
Li Jie believes that as a management consulting business, the essence of investment banking is customer experience. At present, many investment banks try to seize the market with low rates, which is difficult to work. Low price means that employees are not motivated enough, customer service quality is difficult to guarantee, and customer experience feedback is relatively poor. The investment banking business focusing on professionalism and service has become a “floor stall business”. In the long run, it not only backfires, but also is not conducive to the sound and healthy development of China’s investment industry.
Under the situation of repeated low-cost contracting in the industry, CAITONG investment bank firmly chooses the direction of improving customer service quality and creating value for customers. Through the introduction of excellent teams and the addition of experienced professionals, the personnel structure of CAITONG investment bank has been greatly improved. At the same time, through continuous high-intensity training and the construction of customer service system, CAITONG investment bank’s personnel quality, market reputation and operation mode have been greatly improved and highly recognized by customers. He said that in the past year, most of the investment banking business of CAITONG investment bank was introduced by customers.
Li Jie expressed the hope that the best Chinese investment banks can lead Chinese enterprises to go abroad, have a certain foresight and leadership, conduct overseas investment and M & A, solidly serve the real economy, serve the landing of top technologies in China, lead China’s economic development at the industrial end, and contribute to China’s rapid development in the next 10 and 20 years, which is also the future goal of CAITONG investment bank.
exceeding the expected service to make customers “more” satisfied
Customer satisfaction is not enough, “more” satisfaction is the management requirement of CAITONG investment bank.
“The reasonable demands of customers must be met. The logic of investment banking is to build an investment bank around entrepreneurs with the growth of enterprises.” Li Jie further said that Caitong Securities Co.Ltd(601108) as a characteristic comprehensive securities group has provided positive help for the sales of stocks and bonds in investment banking. CAITONG fund is one of the first institutional investors to set foot in the fixed growth market in China and has the largest cumulative business participation. It has the honor of “king of fixed growth” and has strong advantages in the field of fixed growth; CAITONG asset management is one of the top ten cutting-edge securities companies in the industry. The total scale of asset management is more than 220 billion yuan, of which the scale of active management is more than 210 billion yuan and the scale of public fund management is more than 110 billion yuan. It has a number of institutional customer reserves in the fixed growth field and continues to take the lead in the fixed income field. In addition, Caitong Securities Co.Ltd(601108) built a professional stock and bond sales team, mainly covering professional institutional investors, and established close cooperative relations with various types of institutional investors such as state-owned / joint-stock banks, insurance, securities companies, trusts, financial companies, PE Institutions and sunshine private placement.
Li Jie said that we should provide customers with better than expected services. After 2019, CAITONG investment bank group was renamed CAITONG professional investment bank group. The purpose is to hope that each employee can further improve their love and efforts for investment banking business and become a professional investment bank. Specifically, CAITONG investment bank hopes to further practice the “1 + 4” service mode of “underwriting recommendation + financing norms + strategic consulting + industrial empowerment + direct investment”, so as to make the investment bank industry chain longer, finer and deeper, change from a simple underwriting recommendation to an industry consultant of the enterprise and an industry consultant of the government, and build a professional investment bank for comprehensive financial services in the whole life cycle of the enterprise.
Some exceed expectations from diligence, some from the deep cultivation of the industrial chain. CAITONG investment bank can accompany customers to run two laps in Beijing, Shanghai, Guangzhou and Shenzhen during the roadshow, so as to basically cover 80% ~ 90% of fund and institutional investors, and fully create communication opportunities between investors and entrepreneurs. The issuance P / E ratios of Huayan Jingji and Zhejiang Entive Smart Kitchen Appliance Co.Ltd(300911) gem projects in charge of CAITONG investment bank are higher than the average market level of the same industry. The reason is that we have really discovered two or three bright spots of the enterprise, continuously passed the bright spots of the enterprise to the mainstream investment institutions in the market, and obtained the recognition of institutional investors.
Taking Zhejiang Dayang Biotech Group Co.Ltd(003017) as an example, CAITONG investment bank has been involved since the early stage of enterprise growth to help enterprises finance and introduce strategic investors, introduce important customers for enterprises with industrial empowerment, and help enterprises create sales revenue and profits. Another example is Zhe Jiang Li Zi Yuan Food Co.Ltd(605337) , a leading dairy enterprise in Zhejiang Province. CAITONG investment bank assisted in introducing Maotai war investment fund according to its industry status and characteristics, improved its nationwide sales network, and finally realized restructuring and listing.
It is worth mentioning that CAITONG investment bank also regularly helps enterprises sort out the analysis reports of industry dynamics and competitors by inviting strategic consulting experts and industry researchers to communicate with enterprises, so as to provide intellectual support to entrepreneurs. By expanding the service dimension, we can form differentiated competition with other securities companies, and then deeply bind enterprise customers.
Li Jie hopes that by continuously optimizing the training and service mechanism, every employee will grow into a soldier and the ultimate target special forces, so that CAITONG investment bank can become the preferred supplier for customers. When customers have any professional problems to consult, they will choose CAITONG investment bank at the first time. Finally, through the better customer satisfaction and business feedback brought by the unexpected service, the benign development of projects and personnel will be formed, so as to achieve the goal of the 14th five year plan of CAITONG investment bank.
