In Fang Leis opinion, this is due to the fact that tiger has a huge retail user group. Chinese companies listed in the United States hope to learn more about their Chinese investors and become shareholders of the company.
Tiger securities has IPO retail distribution advantages. According to the financial report of 2020q2, during the reporting period, the number of accounts opened by Tiger securities increased by about 91000, reaching 834000; the net increase of customers entering gold increased by about 34000, reaching 168000. The number of customers increased by 4.6 times in the same period of last year, setting a new record in the number of new customers in a single quarter.
On the other hand, tiger securities has solved the pain point needs of Chinese companies and has strong technological capabilities. We know more about Chinas new economy companies, and we are more willing to do simple things in detail and do well in execution.
With this, tiger securities, which started with brokerage business, has gradually become the standard investment bank for Chinese companies to go to the United States for IPO. According to the data of SEC and Bloomberg, tiger ranked first in the world in the number of China capital stocks underwritten in 2019.
But tigers ambitions go beyond that. Recently, tiger has won five new financial licenses, such as investment research, which has successfully formed a business closed loop. In addition, tiger securities is opening up a second battlefield outside the United States.
Rising up: a problem solver of zhonggegus pain points
Therefore, for many years, how to eliminate the cognitive barriers between Chinas new economy companies and investors has been a difficult problem in the US capital market.
But it turns out that problems dont last forever. The surging tide of the times has given birth to such problem solvers as tiger securities. In this regard, Fang Lei believes that this is due to the inherent gene of tiger securities.
Back six years ago, at that time, Wu Tianhua, an old shareholder, was deeply afflicted by US stock trading software. He decided to build a professional trading software to meet the trading needs of Chinese funds and investors. In March, he left the company and founded netherworld securities.
Guo Dajiang is a partner of tiger securities investment banking business and a witness to the implementation of from 0 to 1 in investment banking business. Most of the companies we contacted last year didnt know tiger could still be an underwriter. This year, not only did a lot of customers come to us on their own initiative, but also local institutions in the United States would actively contact us to place orders.
In his opinion, the reason behind this change is that tiger securities itself is an entrepreneur. He is on the track of the new economy. He has also experienced the whole process of American IPO, and understands the demands of new economy companies better.
Fang Lei also felt the same way. We are trying our best to help Chinas new economy companies to do simple things in the best detail, do well in execution, and impress companies with their expertise.
Compared with traditional investment banks that rely heavily on offline investment banks, the technology investment bank tiger securities, based on the background of independent R & D and innovation investment banks, has the advantages of comprehensive coverage of over 500 top investment institutions in the world and a number of funds focusing on China capital stocks, as well as millions of business users as the foundation. Its institutional and retail brokerage business volume can help investment banks very well Business.
In the interview, Fang Lei gave two examples to the emperor. One is huise insurance. In huise IPO, in order to help the company successfully issue tiger securities, the investment bank team introduced Xiaomi as its strategic shareholder to help both sides find common interests to the greatest extent.
The second is the Blue City brothers. In the early stage of IPO, investors did not understand the business model and growth potential of its business model because there was no benchmarking company in the U.S. stock market. As the focus of the roadshow, it finally won the subscription of several famous fund companies and realized the successful issuance.
In fact, tiger securities is not only the underwriter of China capital stock IPO, but also its friends. Many of our IPO customers are also customers of our ESPO business. They think tiger is a trusted partner, Fang said.
Development: new investment banks dimension reduction
In fact, this is not the first time tiger securities has won the top spot in the jungle of traditional American brokers. According to the financial report of tiger securities in 2019, tiger securities has underwritten 12 IPO cases of China capital stock in the United States throughout the year, making it the largest underwriter.
In Fang Leis opinion, this is due to the evolution of the technology wave and the dimension reduction of the new investment bank to the traditional investment bank.
Reviewing the development history of American securities investment banks, we can clearly see that the first generation of securities investment banks in the United States was mainly established before 1975. For example, Morgan Stanley and Goldman Sachs rose respectively in two industrial revolutions.
In the 1980s and 1990s, the rise of the Internet has brought electronic revolution to the securities industry. The second generation of securities companies, such as Yingtou securities, have stepped onto the historical stage.
Today, the tide of Internet technology is surging and surging, and finance is deeply integrated with Internet technology, so the third generation of securities investment bank represented by Tiger securities is rising.
In the past six years, tiger securities has continuously increased its research and development of science and technology, and its app platform has gone through 302 update iterations.
Compared with traditional investment banks, tiger securities faces not only institutions and high net worth customers, but also millions of small and medium-sized investors, so it has a stronger natural demand for the accuracy and efficiency of massive customer order data processing.
Now, tiger is building an innovative investment banks middle and back office work mode that integrates retail, high net worth and institutions. It has formed a fully automated solution for the whole process of placing orders from the front desk, cooperation between the middle office and the back office settlement and distribution.
In a typical case, in June this year, in the underwriting project of burning stone medicine, more than 10000 retail customers poured into the tiger platform in just three days. But from order to distribution, the stability and capacity of the back office system in tiger securities are under pressure.
This is due to the differences in economic forms between China and the United States, which will also lead to differences in the future fate of securities investment banks in different times.
Recently, tiger securities has won five U.S. financial licenses, including investment research, securities proprietary trading, and U.S. government securities broker. So far, tiger securities has more than 20 financial licenses in the US market. This also means that tiger securities has formed a closed-loop business from brokerage business, investment research, securities issuance and underwriting, proprietary investment, wealth management to liquidation.
With multiple advantages, tiger securities has successively won the IPO orders of two new energy vehicles. On August 27, Xiaopeng auto was successfully listed in the US stock market, and its share price rose 41.47% on that day. Tiger securities, the underwriter of Xiaopeng auto, contributed $2.4 billion in orders. Previously, tiger securities also acted as the underwriter of the ideal car, contributing $1887 million in orders.
But Wu Tianhuas business ambition is obviously more than that. It is revealed that tigers small goal in investment banking business this year is to open up a second battlefield outside the US market.
In June this year, Netease went back to Hong Kong for a second listing. Tiger securities is the only Internet broker in its international placement, contributing nearly HK $5 billion in institutional orders. In the same month, Warner Music returned to the U.S. stock market, and tiger securities was also the only Chinese funded Internet broker in its underwriting group. Earlier, tiger also participated in the IPO of zoom, and gained a lot in the international battlefield.
But for now, one question is why tigers investment banking business accounts for less than 10% of revenue?
The investment banks revenue ratio is still in its infancy. In addition, the benefits of investment banking business are not only reflected in financial reports, but also form a strong synergy effect with other businesses.
First of all, the rapid development of investment banking business has given tiger more new projects and underwriting shares, which in turn drives the outbreak of brokerage business. From the perspective of the second quarter, the company launched seven new U.S. stock projects, including Jinshan cloud, legend biology, sound network, and burning stone medicine, of which five were exclusive to tiger, attracting a large number of investors to hold currency, which became one of the important boosting factors for the outbreak of brokerage business.
On the other hand, in the second quarter, tiger securities signed 16 new contracts, including ESOP customers such as jinshanyun, Maimai, Gaosi education, KUKE music and spark thinking. Since the beginning of this year, tiger ESOP has won more than half of the newly listed medium cap companies in the US stock market, accounting for 52.9% of the market share, far ahead of other ESOP suppliers.
Through a careful analysis of the ESPO business acquired by Tiger securities this year, we can see that Huixuan and a large part of China general stock companies were clients of tiger securities investment banking business. In the second quarter, more than 10% of the new customers of tiger securities came from ESOP customers, and the feedback effect was obvious. With such a long cycle, more and more new economy companies choose to grow with tiger securities. They share the ups and downs of growth and IPO together. In just two years, tiger securities team on Wall Street has completed what Chinese investment banks have been able to accomplish in the past few years. Tiger securities is listed with Goldman Sachs and Morgan in more and more new economy companies prospectuses. Now its main role is the underwriter, and it is moving towards the lead underwriter in the future. Tiger securities has begun to gradually lay out financing, M & A, IPO, investment and research links, and has absolute platform advantages in IPO retail distribution. This Matthew effect is becoming more and more obvious, and it is becoming a new force that can not be ignored by Wall Street investment banks. Source: editor in charge of mass news: Chen Tiqiang_ NB6485
Through a careful analysis of the ESPO business acquired by Tiger securities this year, we can see that Huixuan and a large part of China general stock companies were clients of tiger securities investment banking business. In the second quarter, more than 10% of the new customers of tiger securities came from ESOP customers, and the feedback effect was obvious.
In just two years, tiger securities team on Wall Street has completed what Chinese investment banks have been able to accomplish in the past few years. Tiger securities is listed with Goldman Sachs and Morgan in more and more new economy companies prospectuses. Now its main role is the underwriter, and it is moving towards the lead underwriter in the future.
Tiger securities has begun to gradually lay out financing, M & A, IPO, investment and research links, and has absolute platform advantages in IPO retail distribution. This Matthew effect is becoming more and more obvious, and it is becoming a new force that can not be ignored by Wall Street investment banks.