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Jun'an Securities: The Fall of a Star

Early Glory

Like Wanguo Securities, Jun'an Securities was one of the promising Chinese securities firms at the end of the twentieth century. The company was incorporated in 1992. Its charter members included Shenzhen Heneng Real Estate Development Ltd., ABC (Shenzhen) Trust and Investment Corp., CITIC Industrial Bank (Shenzhen Branch), and two other government-owned companies. The initial investment was CNY 50 million. Zhang Guoqing acted as president.

Thanks to a stimulating environment for innovation and a flexible mechanism, the company developed after incorporation a distinct, daring corporate culture and achieved good business results. Between 1993 and 1998, Jun'an Securities helped more than 100 companies raise a total of about CNY 30 billion in A or B shares, IPOs, or placements on the primary market. In terms of brokerage, Jun'an Securities had more than 60 business offices and ranked first or second on the Shenzhen Stock Exchange. It was among the top six firms on the Shanghai Stock Exchange in trading volume. The company was also very active in proprietary trading. It was widely acknowledged as the securities firm (among all Chinese securities firms) that invested most and was most capable in research and development. In regard to asset management, the company created Jun'an Benefit (one of the first Chinese funds) and brought about the first merger and acquisition in China's stock market, known as the battle between Jun'an and Vanke. The company also had a flexible distribution arrangement and employee incentive programs (for employees below officers). The company generated great corporate earnings and shareholder returns. As of December 31,1997, the company had total assets of CNY 17.5 billion and more than 2,300 employees. It had earned record-high net profits of CNY 711 million—the highest amount among all Chinese securities brokers.

 
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