GF SEC: Common experiences and individual choices in the global layout of international investment banks

GF SEC released a research report stating that international development is the inevitable path for top investment banks, and the deepening internationalization of Chinese securities firms is currently in a golden period. In the "China investment, investment in China" service chain, Chinese securities firms have a natural advantage. Investment banking and cross-border derivatives businesses have promising prospects. At the same time, the ongoing deepening of global wealth management demand provides opportunities for Chinese securities firms to expand their wealth management business, focusing on Hong Kong initially, extending to Southeast Asia, and then looking globally. The main points of GF SEC are as follows: International development is the inevitable path for top investment banks, driving further growth in overall performance Represented by Goldman Sachs, Morgan Stanley, and Nomura Securities, top investment banks continuously enhance the breadth and depth of their international business. In recent years, the revenue contribution of international business for these three organizations has been stable at around 30%, with international business growth and profit margins having little correlation with domestic business, effectively stabilizing overall performance. The expansion of international business for top investment banks has certain commonalities. From the rise of international business, development serves the overseas expansion of domestic companies and relies on the strength of domestic business. From the process perspective, seizing the trend of the times, continuously expanding regions, and strengthening business synergy. In terms of regions, focusing on economically mature areas, deepening connections with local business domains, and seizing opportunities in open capital markets. The business focus and path of expansion for international layout of top-tier investment banks have certain differences 1. Wealth management and asset management business: In order to meet the cross-border investment needs and target global high net worth clients, top investment banks use more flexible and efficient acquisitions and joint ventures as core methods, focusing on global wealth hubs and prioritizing North America and Europe. 2. Investment banking business: U.S. investment banks focus on overseas demand and capabilities for going abroad, while Japanese investment banks focus on domestic cross-border demand. However, both primarily start with self-establishment as a way to go abroad, and then strengthen their position through acquisitions or joint ventures, sequentially expanding into Western Europe, Japan, and other Asian regions. Nomura's investment banking business has had a lesser effect in going abroad, with its local foundation and expansion approach being the main reasons. 3. Capital intermediary business: Primarily focusing on cross-border/foreign demand, expanding synchronously with investment banking business, and providing synergistic services to institutional clients. Acquiring or collaborating to rapidly enhance trading capabilities, continuously deepening globalization and innovation with policy changes. Overseas experience insights Business strategy: Advantages in business can serve as a starting point for experience reuse, seeking multidimensional business expansion, maintaining sufficient flexibility to adjust business focus. Regional layout: In-depth analysis of global market trends, selecting open and mature regions, expanding naturally advantageous areas with deep connections to the local area and similar institutional culture. Path considerations: Combining business characteristics, resource endowments, and strategic positioning, employing multiple strategies simultaneously, timely actions, acquisitions should pay attention to the integration and synergy of business, enhancing integration capabilities; controlling shares helps strengthen business control and strategic stability. The deepening internationalization of Chinese securities firms is currently in a golden period The deepening opening of the capital market and the goal of building top investment banks have created a favorable policy environment for the international layout of domestic securities firms. CITIC Securities, China International Capital Corporation (CICC), and Huatai Securities have all made substantial progress in their international development and have become new growth points. CITIC Securities and CICC both hold leading positions in investment banking in the domestic market, using institutional and investment banking businesses to consolidate their client advantages overseas; Huatai is focusing on opening up the internationalization path for retail businesses to establish unique advantages. In the "China investment, investment in China" service chain, Chinese securities firms have a natural advantage. Investment banking and cross-border derivatives businesses have promising prospects. At the same time, the ongoing deepening of global wealth management demand provides opportunities for Chinese securities firms to expand their wealth management business, focusing on Hong Kong initially, extending to Southeast Asia, and then looking globally. Risk Reminder: Inadequate significance of borrowing overseas experience; economic growth falling short of expectations; geopolitical risks; risks from unexpected changes in policy environment.