CC 6105 Presentation

8/14/2019 CC 6105 Presentation

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Case Analysis Presentation

Fujian Industrial Securities Company

CC6105 - The Dynamics of Investment in GreaterChina

presentsalvin charles lynniceboon kok theng hweepuay leng


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FIS problems solutions features strategies


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limited size and lack of powerful ties

limitation in the volume of business

competition with national securities houses in Shanghai

lack of local favoritism

1 Size


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24Shanghai : 3

Fuzhou : 4


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Offices 24 113

Clients TransactionSettlement Fund

(2006)

RMB 5 BillionRanking : 18/20

RMB 26 BillionRanking: 3/20


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targeted at niche areas

Proprietary Trading Priority Services for the riches


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Income from Proprietary trading

Operating Income= 21.5%

Proprietary Trading: the most profitable activity


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Net Profit(2006) RMB 0.3 Billion RMB 1.5 Billion

Income fromProprietarytrading(2006)

RMB 0.2 Billion RMB 0.74 Billion


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* Return on Equity (ROE)firm's efficiency at generating profits from every dollar of net assets (assets minusliabilities)

shows how well a company uses investment dollars to generate earnings growth

ROE*(2006)

48.62%

Ranking : 9/20

39.93%

Ranking : 17 /20


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Big client & Mid client rooms : special trading rooms for wealthycustomers


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unlike other developing countries, Chinas aim at raising

capital had accelerated the competition

extremely competitive environment

though market is young, M&A, financial restructuring

and consulting services already popular

2 Industry


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Professional Advices

Transaction Platform

Conferences and seminars

Analyst Reports

Stock Tips

Investment education prog

...


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15% 6.12%

9% 80

110 307 6 18

18 30%


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lacked good relationship with government andenterprises in other provinces besides Fuzhou

Guan Xi with local government : Approval of IPO listing

missed many business opportunities as an outsider

3 Ties


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Hiring people from different regions

Open more branches

Search for new business


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Shortage of talented and qualified employees

4 People Management


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Performance based Bonus + SalaryAdjustment


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SOE Worker

R&D

Investment Banker

Graduate

RMB 800

RMB 2000

RMB 2000 + Bonus

RMB 8000


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: 20032004 2005 2007 4 400


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Inherent risks

Professional knowledge and experience is required

1 proprietary trading


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Investment bankers can work with R&D analysts

Research report maybe biased to suit the speculative

trading by proprietary unit

2 moral hazard


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3 investment banking

Securities underwritingdebt & equity capital market Corporate advisory

Huge Potential Expansion strategy in place

Risky Business


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strong emphasis on analyst report to meet clients needs

comfortable environment for customers

comparative advantage of R&D analysis on medical,

railway, food & beverage, construction, fujian

enterprises

4 quality service


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Thank You


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Q&A session

Documents

CC 6105 Presentation