GF Securities: Southeast Asia has become a key destination for brokerage firms to go overseas, and it is recommended to use a balanced and overall layout

The Zhitong Finance App learned that GF Securities released a research report saying that Southeast Asia has become a key destination for domestic brokerage firms to go overseas, but the total economy of a single country is low. It is recommended to use Indonesia, Singapore, or Vietnam as a starting point and take a balanced and overall layout. In terms of strategy, the first is to combine two tracks, using the establishment of subsidiaries and mergers and acquisitions to speed up the localization process; the second is to enter the business into brokerage business to seize the growth opportunity period for wealth management, and supplement the investment banking business to serve the demands of local enterprises to go overseas; and the third is to obtain a comprehensive license to broaden business authority.

The main views of GF Securities are as follows:

The Southeast Asian market has superior endowments, providing a good foundation for going overseas

As the fifth largest economy in the world, ASEAN's economy is huge, growing strongly, and the urbanization process is relatively mature, providing guarantees for financial infrastructure and talent gathering. Significant demographic dividends, high internet penetration rates, and rapid development of the digital economy have spawned strong financial demand. Coupled with the close economic and trade cooperation and deep cultural ties between ASEAN and China, it has created a unique opportunity for Chinese brokerage firms to go overseas.

The securities market pattern is complex and diverse, showing a differentiated development trend

(1) In terms of financial supervision: Strengthen division of business supervision, adapt to mixed business trends, and continue to attract foreign capital inflows. (2) In terms of market space: the Singapore and Malaysian securities markets are mature and developed; Indonesia and Thailand later took the lead, and the securities market grew rapidly; the Philippine and Vietnamese securities markets are still in the early stages of development, reserving broad room for growth. (3) From the perspective of market structure: At the level of investor structure: In terms of transaction volume, foreign investment participation is divided, with the exception of Vietnam, the overall level of foreign investment penetration is high. Indonesia, Malaysia, the Philippines, and Thailand account for 42%, 38%, 46%, and 45% of foreign investors, respectively; the Singapore Stock Exchange opened earlier, with foreign investors accounting for 41% of the market value of overseas companies; while Vietnam's two major exchanges account for less than 10% of foreign investors, the top three securities brokers are all local brokerage firms. At the level of brokerage business concentration: New Mataiyue securities brokerage business is highly concentrated and the competitive pattern is stable. CR3 is about 45%, 32%, 32%, and 35%, respectively; the securities brokerage business in Indonesia and the Philippines is less concentrated and competitive. CR3 is about 27% and 30%, respectively.

The development model of leading institutions is based on the mainland and has reference value

(1) Saigon Securities (SSI) took advantage of the opening up of the Vietnamese stock market and actively participated in international cooperation in the early stages to establish a pioneering advantage; based on the characteristics of the market dominated by local retail investors, it expanded customer acquisition channels, optimized product quality and investment services, enhanced user stickiness, and reached the top three independent brokerage firm in Southeast Asia by market capitalization. (2) UOBKH (UOBKH) relies on the resources of UOB in Singapore, strengthens regional competitiveness, continues to expand its global footprint through mergers and acquisitions; focuses on brokerage credit business, creates a full range of financial product matrices, develops its own digital platform, and positions itself as a leading brokerage firm in Southeast Asia.

Risk warning: risk of large market fluctuations; increased risk due to industry competition; changes in policy environment, etc.