Exclusive Interview With Sheng Xitai: Capital Market Is The Important Tool Of A Country And The Infrastructure Of A Big Country

In the past 30 years, there have been ups and downs in history.

For those in the financial sector who are in the wave of reform, there are not only "success" but also stories that make people sad.

This contrast is particularly prominent in the field of investment banking.

Sheng Xitai, the guest of interview with 30 people in China's capital market in the 21st century economic report, was one of the earliest investment banking practitioners in China. Previously, he served as chairman of Huatai United Securities and President of United Securities. It is regarded by the market as a representative of the "92 school" in the securities industry.

From the perspective of investment banks, the institutional change of China's capital market has a special meaning.

However, he eventually withdrew from the investment industry and founded Hongtai fund to enter the investment field. He is currently the chairman of Hongtai group.

Don't prejudge whether the reform is feasible

From joining Jun'an securities in 1992, to Shandong Securities, United Securities, Huatai United Securities, some of the securities companies in which Sheng Xitai performed his duties have disappeared in history. Talking about the reform and change of the capital market in the past 30 years, Sheng Xitai said that he had a "skin feeling" for the industry.

21st century: you have been on the front line of China's securities market for a long time. Can you share some special time points in your work?

Sheng Xitai: I have been in the securities industry for almost 20 years from 1992 to early 2012.

Recently, we saw a data that the number of Listed Companies in China has exceeded 4000, which is very difficult.

There are now 40 million legal persons in China's industrial and commercial enterprises. After 30 years of development, there are only 4000 listed companies in the capital market. It is very difficult for Chinese companies to go public, with a ratio of one in ten thousand.

In the past 30 years, the development of the capital market has also experienced various difficulties. For example, when I first started working in 1992, no one knew what the securities industry was doing; when I was a student in Nankai, I learned the accounting system of the former Soviet Union, and when I was a graduate student, I had the Chinese accounting standards.

In the second half of 1992, I went to Shenzhen to look for a job. The Securities Regulatory Commission has not yet been established. I remember that I went to Sichuan at the end of 1992 to prepare for the listing of Jinlu group. At that time, there was no Securities Regulatory Commission (SFC) and no template for the prospectus. I just drew a gourd according to the same pattern in a prospectus of the Hong Kong stock exchange.

Following the establishment of the SFC, the market has been regulated since then.

Another great event is the reform of non tradable shares.

Before 2005, 2 / 3 of the stocks could not be circulated. After the reform of non tradable shares was launched by the state in 2005, we ushered in the era of big circulation in 2007. It can be said that the development of today's capital market is brought about by the reform of non tradable shares.

Then there will be the reform of the whole issuance system. There have been many times, from the quota system, the examination and approval system, to the approval system and the registration system. But in the end, every step has been successful and should be done in every step.

21st century: what are your experiences after so many changes?

Sheng Xitai: a deep feeling is that any reform needs to be tried. Don't judge whether it is feasible or not.

I remember a very heavy event at that time, which was the Trading Commission of stocks.

Before 2003, the national regulation was 3% per 1000, but we were in the Huanggang business department in Hubei Province at that time. Because it was relatively remote, the service charge of 3% per thousand was very high. At that time, it was very difficult to change. I felt that if we let go, the securities company would collapse. Because this is the ration of securities companies, is the basic income.

Later, it was demonstrated that it was still liberalized for a long time. In fact, the effect was very good. The market was free to choose. The securities companies did not collapse, but also greatly improved their competitiveness. On the contrary, securities companies are forced to rely on creativity rather than Commission, and to innovate business quality rather than traditional business development.

In the development of China's capital market, we emphasize the need to be in line with international standards. What the developed countries have proved to be correct, we should be in line with them. Capital market has been born in western developed countries for one or two hundred years. It is enough to use their effective and successful experience. If we don't use it well, or we don't use it completely, it means that the maturity is not enough and we don't fully adapt to this general rule.

The significance of the registration system cannot be overemphasized

A year ago, the science and technology innovation board was officially launched, and now the registration system of the gem has been implemented. "After 30 years of waiting for the capital market to come to the registration system, it is of great significance." Sheng Xitai said.

21st century: how to treat the reform of registration system?

It reflects the real meaning of the capital market.

What is the core of capital market? Listed companies are the ultimate products of the capital market.

The way for the common people to participate in the financing of listed companies is to buy and sell stocks. Therefore, whether the company can be listed on the stock market and how much the stock is worth depends not on the regulatory authorities, but on the investors. Investors decide whether the enterprise is not listed and whether it is qualified to be listed.

The first core meaning of registration system is full information disclosure. In other words, the enterprise should fully disclose its information. Show all the information and investors will decide what stocks to buy.

The second point is to severely punish counterfeiting. It is a kind of malicious fraud for investors that too much paint and too much plastic work will overturn the true face of the company.

21st century: you have always been in the forefront of the capital market. What are your impressions on the process from the brewing to the launch of the registration system reform?

Sheng Xitai: after 30 years of waiting for the capital market to come to the registration system, it is of great significance.

Looking back, an important watershed is 2015. The extreme market in 2015 brought the development process of China's capital market to a standstill. Before 2015, an important event was the listing of Alibaba in the United States in 2014.

After more than 30 years of China's market economy development and 24 years of China's capital market development, we still can't keep Ali as an enterprise in China's capital market. I think the whole country has been deeply shocked.

In my opinion, a country can not have a great capital market without a great economy. Similarly, capital market is the infrastructure of a country, a heavy weapon of a big country, and an important means of national security of a big country.

Now that Sino US relations are tense, we have deeply felt that our commercial companies in the United States are in danger of being "pinched off" at any time. In the future, if our enterprises are listed in other countries, they will be handed over to others. Our country has cultivated these unicorns for five years or even longer, which represent the future enterprises. If these enterprises are listed overseas, we need a longer time to cultivate a batch of new unicorns.

Capital market is the most important tool of a country, an important means of national security and the infrastructure of a big country. From the opening of the science and technology innovation board to the current registration system of the growth enterprise market, which provides a very favorable development weapon for China, can not be overemphasized.

21st century: what is your vision for the future development of China's capital market and China's economic development?

Sheng Xitai: the wisdom of the Chinese people is unparalleled, and the efforts of the Chinese people are also unparalleled.

Over the past 30 years in the capital market, we have been successful so far.

The registration system is a new door. In the past 30 years, from the establishment of China's capital market to the reform of non tradable shares in 2005 to the establishment of the science and technology innovation board and the opening of the registration system, every big node is a great opportunity to expand. The reason why the capital market is getting better and better is that China's economy will get better and better. Without a great economy, there will be no great capital market.

Merging and cultivating big Mac is the future direction

During his tenure as president of United Securities, Sheng Xitai spent more than a year to turn around the situation of United Securities, which was heavily deficit and unknown. During his tenure, he promoted a number of reforms, including fund sales, construction of securities broker marketing system, reconstruction of investment bank and research system, etc. "Financial institutions are risk management enterprises. My idea is that non-standard development equals zero." Sheng Xitai said.

21st century: you took over as president of United Securities in early 2004. During your tenure as president of United Securities, you promoted a number of industry reforms and innovations. What was the background at that time?

Sheng Xitai: when I was the president of United Securities, it was the worst years in China's capital market. In 2001 and 2002, when China joined the WTO, it was a great time for China's real economic rise, but it was also the time when securities companies began to collapse.

From 2001 to 2005, more than 40 securities companies were closed and the market was in turmoil.

Almost often in the morning to see the newspaper, there is a headline "so and so securities company closed.". When I was in charge of the securities company at that stage, I felt that the whole industry was "leaking everywhere". At that time, United Securities was also in a very difficult situation, and the morale of its employees was very low. Under such circumstances, I am under great pressure. First of all, I am going to boost my morale. I will tell you that in three years, I will make a miracle; secondly, we will unify our thinking through meetings and promote the process; and we will stimulate the enthusiasm of employees through various specific events.

One of the typical is selling funds, which is a particularly important means for me to mobilize the enthusiasm of employees in United Securities, which also gives a good impression to the regulatory authorities. At that time, we were very famous for selling funds. We could sell funds well in both bear and bull markets. The concept proposed at that time was "buy funds to United Securities, sell funds to joint securities".

Of course, the process is also very difficult, including personally leading the staff, each community to the platform "stall" and so on.

Another important concept is "non-standard, development equals zero".

The reason why some securities companies collapsed at that time was that they were not standardized. The definition of a financial institution is an enterprise that manages risks. If it doesn't do the right thing all day long, it will not develop well if it is not standardized and speculated. At that time, we didn't regard the standard of office building as the standard of our company's development.

At that time, United Securities was a model that survived the extremely weak situation, so I had time to promote a lot of reforms, such as IPO, bond underwriting, research and other businesses, as well as introducing the concept of broker into the securities industry.

"21st century": how do you think of the current tide of securities companies merging?

Sheng Xitai: the securities industry needs to have a number of real leaders and a number of strong competitive securities companies.

In fact, this development trend is also obvious.

The reason why domestic securities companies are not respected is because their size is too small. The largest securities company is not as good as a second and third rate commercial bank. How can we say that we can contribute to this country and increase the proportion of direct financing? It's all empty talk.

Securities companies should be an extension of the supervision of China's financial institutions. If they are large enough, they can play a greater role in the market as the ultimate intermediary, effectively improving the financial structure of China and increasing the proportion of direct financing. Only by doing more can the securities companies improve their status.

I think it is absolutely right for securities companies to merge and cultivate big Mac, which is the future direction. Small securities companies do not need to exist, because financial institutions are a very risky industry. Financial institutions are defined as enterprises with operational risks. Since the business risks are large enough, they can only have a chance to slow down, have a chance to breathe, and have room to move if there is a problem. It's too small to do it.

One of the reasons for the collapse of securities companies from 2001 to 2005 is the capital problem of securities companies. Once we do self-management and asset management, the company will collapse after the loss. If the capital of securities companies is 100 billion, trillion level, it is impossible to have this situation.

On the contrary, the scale of bad debts and bad debts of banks is far larger than that of securities companies. Why can banks "cover them" is that they are large enough. Therefore, there must be opportunities for companies to take risks.

Turning to investment and looking at more technology

After leaving the securities industry, Sheng Xitai chose to be an angel fund. In the angel investment stage, he invested in Kunlun Jue, Zhongshang Huimin, Liyuan gene, xiaoxiandun, Yidian rent and other companies.

21st century: how do you plan to be an angel fund after leaving the securities industry?

Sheng Xitai: to be an angel fund, the first thing is to help a start-up enterprise, which will have a great sense of achievement; second, many young entrepreneurs do not have enough life experience. My age can provide them with a lot of help, not only money, but also life philosophy and methodology. Third, I can help them with business management.

Over the past few years, I have a great sense of achievement. I have also invested in a number of enterprises, such as Kunlun Jue and Chinese businessmen benefiting the people.

21st century: what is your favorite investment direction at present?

Sheng Xitai: there are still many opportunities in the era of mobile Internet. The first and most important opportunity is technological innovation.

Now the international environment forces China to promote technological innovation. Many people know the importance of chips in the Huawei incident. Therefore, China's semiconductor industry must be improved in the next decade. This is also a good opportunity for investors.

The second opportunity is biomedicine and medical devices. So far, our biomedical technology and medical device industry is far behind the world. This is the future must be developed, and there will be many opportunities. Of course, bubbles are serious, but without bubbles, there will be no precipitation and no prosperity. The third opportunity is the industrial Internet, which is the continuation and penetration of mobile Internet. In addition, there is an opportunity related to the industrial Internet, that is, the b-end. In general, there are infinite opportunities in the future, which depends on how to seize them.

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