Mergers and acquisitions reshape the new landscape of the securities industry; specialized services become the key to development

The Chairman of China’s Securities Regulatory Commission, Wu Qing, recently stated clearly that efforts will be made to revise and implement regulations for securities companies, actively supporting top-tier institutions to grow stronger and larger, while promoting differentiated development among small and medium-sized brokerages.

The development path of the securities industry is becoming clearer. In recent years, mergers and acquisitions in the securities sector have accelerated significantly. Leading brokerages are enhancing their core competitiveness through integration and acquisitions, while small and medium-sized firms are carving out their niche through regional focus and specialized services. Several representatives and committee members have expressed that securities companies can leverage regional enterprise development needs to provide comprehensive, professional wealth management services, creating a virtuous cycle of “industry wealth creation, financial preservation, and professional wealth transfer,” thereby providing a solid foundation for the long-term stable development of regional industries.

Accelerated Industry Mergers and Acquisitions

Wu Qing recently emphasized guiding industry institutions to focus on their core businesses and develop in a regulated manner. For securities companies, this includes promoting revisions to regulations and actively supporting top-tier institutions to grow larger and stronger, while encouraging small and medium-sized firms to develop through differentiated strategies such as regional specialization and unique services. The goal is to better improve governance, strengthen internal controls, optimize services, and pursue differentiated development.

This stance has clarified the direction for the development of the securities industry. Leading brokerages are strengthening their core competitiveness through mergers and acquisitions, accelerating the construction of first-class investment banks with international competitiveness. Examples include Guotai Junan’s merger with Haitong Securities, Guosen Securities’ acquisition of Wanhua Securities, and China International Capital Corporation’s (CICC) planned share swap to acquire Cinda Securities and Dongxing Securities. These large-scale restructuring cases mark a new stage of industry consolidation and upgrading in China.

Small and medium-sized brokerages are also opening up space for survival through regional deepening and specialized strategies. For instance, Guolian Securities acquired Minsheng Securities; Zheshang Securities acquired Guodu Securities; Western Securities acquired Guorong Securities; and Dongwu Securities plans to acquire Donghai Securities—these specialized institutions are achieving rapid growth through targeted mergers and acquisitions.

Many industry insiders told reporters that mergers and restructuring are vital means to enhance companies’ core competitiveness and achieve growth and strength. Through M&A activities, firms can expand capital, consolidate client resources, and improve service capabilities, thereby accelerating the building of a strong financial nation and better serving national strategies and the real economy.

The “14th Five-Year Plan” period is a strategic opportunity for the securities industry to rise on the momentum, deepen capital market reforms comprehensively, and accelerate the development of first-class investment banks and investment institutions.

Building a first-class investment bank with international competitiveness relies heavily on cross-border business. Yan Feng, member of the National Committee of the Chinese People’s Political Consultative Conference and Chairman of Guotai Junan International, believes that a more vibrant and stable Hong Kong market will significantly boost international investors’ confidence and willingness to allocate Chinese assets through connectivity channels, thereby forming a new pattern of mutual support and mutual promotion between the two regions, with stable and balanced development.

“Continue to explore the potential for coordinated development of the two markets, further optimize relevant mechanisms, and enhance the ability and attractiveness of both markets to absorb international liquidity. Through bidirectional flow of incremental funds between the north and south, achieve mutual support and coordinated development of the two stock markets,” Yan Feng said.

Enhancing Professional Service Capabilities

As the support for technological innovation in capital markets continues to strengthen, improving professional service capabilities has become a key focus for securities companies.

Jia Wenqin, a deputy of the National People’s Congress and former director of the Beijing Securities Regulatory Bureau, suggested increasing support for technological innovation. Given the large R&D investments, high operational uncertainties, and long profit cycles of tech companies, it is necessary to further improve systems for identifying, screening, and pricing innovative tech enterprises, and to more precisely support high-quality companies in going public and engaging in mergers and acquisitions. Continuous efforts should be made to elevate the high-standard professional services of intermediary institutions.

Regarding services for tech startups, Feng Yidong, General Manager of Zhongtai Securities and a member of the Chinese People’s Political Consultative Conference, believes that for early-stage companies, securities firms can provide capital through venture capital and private equity, focusing on “earlier, smaller, and newer” companies, building an ecosystem from resource discovery to incubation, helping tech-based SMEs to break out of their cocoon. For growth-stage companies, IPO services can serve as a bridge, offering diversified services such as listing financing and cross-border financing to facilitate a healthy “capital-tech-industry” cycle. For mature companies, tools like refinancing and bond issuance can help strengthen their financial health and promote their extension into higher-end industrial chains.

Feng Yidong stated that securities firms can base their services on regional enterprise development needs, offering comprehensive, professional wealth management services across multiple dimensions such as wealth investment, planning, value-added services, shareholding management, and corporate governance. This creates a virtuous cycle of “industry wealth creation, financial preservation, and professional wealth transfer,” providing a solid foundation for the long-term stable development of regional industries, allowing entrepreneurs to focus on their core industries and innovation.

At the investment research level, Yang Chuangzhang, Chief Economist at Shenwan Hongyuan Securities Research Institute and a member of the Chinese People’s Political Consultative Conference, believes that the securities market’s research system should strengthen in-depth studies of key technological directions. Combining interdisciplinary research and industry chain analysis can help identify truly long-term potential technological routes. Additionally, attention should be paid to companies’ R&D systems, industrial collaboration, and commercialization capabilities to assess whether they can transform technological breakthroughs into industry and market advantages.