In response to the latest development in China’s capital markets, Haitong Securities fundamentally transformed its brokerage business. With the founding of its Brokerage Division in June 2003, the company has achieved a great deal in its “grand brokerage” business model. Despite sustained market weakness and intensified competition in 2003, Haitong ranked No. 3 in terms of A-share and fund trading volume, which rose by 16.61%, outperforming the growth of 12.49% for the market as a whole.

Haitong has established a qualified fund sales team to capitalize on the rapid expansion of China’s mutual fund industry. The company also helped fund management companies develop marketing strategies. In organizing the marketing of the funds for Fortis Haitong Investment Management Co., Ltd., Haitong invited, for the first time in China, executives of foreign financial groups to promote the concept of value investing, and provided investors with opportunities to interact directly with fund managers via video conference system. Haitong was a leading distributor of funds in 2003. For the first quarter of 2004, the company has distributed up to RMB 2bn worth of funds.

To better serve its clients, Haitong has taken steps to streamline its service offerings and established a set of procedures modeled after leading global broker-dealer. The system includes:

• A standardized service model featuring the effective interaction between “Research Institute-Brokerage Division-Brokerage Branch-Clients”;
• Area sales manager system, covering 10 major areas across the nation;
• Broker management system tailored for the particular situations of China’s capital markets;
• Differentiated customer services and competition strategies. Created “Fortune Club” and offered individualized services to high new worth clients; Made available online investment advisors, which provided buy and sale recommendations, company analysis and Q & A to middle- and low-end customers; and updated research products were wired to branches in a timely manner;
• Training programs offered to branch personnel.

In its continued efforts to improve its brokerage business, Haitong has integrated its research and brokerage activities, enabling its analysts to interact more closely with clients of high net worth, QFIIs, pension funds, mutual funds and insurance companies by delivering insightful and objective research.

In addition, the company has developed complete guidelines regarding the operations of its brokerage business. These include “3-year Strategic Plans for Brokerage Business”, “Integrated Brokerage Service and Competitive Strategies”, and “Four Evaluation Criteria for Brokerage (service, training, sales, and branch evaluation).”