The Study On Profitability Model Of Security Companies In Fiercer Competition Situation

This thesis firstly reviews the regulatory reform process of China securities industry. China securities industry has experienced from the local supervision to the central supervision, the decentralized supervision to the centralized supervision. After the "Securities Act" published, China security supervision system and its responsibilities have basically straightened out. The form an initial multi-level supervision framework which has China Securities Regulatory Commission as the core, the local representatives of agencies, stock exchanges and the Securities Industry Association as the group member. There basically forms the securities industry regulatory system and a more self-regulatory rules system which has the "Securities Act" as the core, the various departmental regulations, and normative documents as the member to implement a multi-level system constraint to practitioners institutions and personnel qualifications, the Code of Conduct and the main part of the business.The thesis uses the industry construction and concentration to theoretically analyze the current securities traders’competitive situation. The analysis shows the operating profit of China’s security companies’concentration is relatively low and the market competition is more incentive. The operating profit condition of the security company is relatively more dispersed. The business structure mainly concentrated in the traditional; business of brokerage business, underwriting business, self-employed business and the brokerage business. The brokerage business mainly focus on securities trading agency business, investment banking focus on equity financing and its proportion of self-employed business is still relatively smaller. The analysis further draw conclusions that due to the similar business structure and the business quality, the securities companies, lack of the effective competition means and the price becomes almost the only means of competition.Based on the research of security traders’competition, the article further analyzed the characteristics of China’s security traders’profit model, which is still focus on brokerage business and still the main source of domestic security traders’ income. The domestic security traders’earnings are vulnerable to the impact of market instability and cycle. With the launch of direct investment, margin trading, stock index futures such innovative business,the income source of Chinese security companies appear diverse characteristics, but significantly optimized profit model will take time.The article based on the analysis of competition in the industry and the. current profit model, by comparing our security traders’ function positioning and overseas investment bank gap, showing that China’s stock market as an emerging industry is basically based on origin, traditional business, its function is to present a single, simple characteristic, and the financial intermediary functions still the domestic investment banks’ main function. The primary market’s securities underwriting and distribution business reflect the financial intermediary function of the investment bank. China’s capital market is still in urgent need of development and expansion, the expansion of capital markets makes investment banks in China’s capital intermediary business has a huge market. Recent years, the rapid development of the investment bank in China has close relationship with the huge profits of traditional business.The articles discuss the internal and external forces of the profit model transformation based on the analysis of security traders’industry problem in the second part. The article argues that financial innovation is a source of inner motivation to improve the security traders’core competitiveness, the security traders’ financial innovation fundamental motivation is to adapt to the changing economic and financial environment. Thus, in order to adapt to the changing economic and financial environment, the inner motivation of the security trader transforming the profit model is to maximize the goal’s profit, and financial innovation provide the path and the means to achieve changes in the pattern of profitability. External institutional change and deregulation process is to expand business scope and the scale of the external force.The fourth part of the article based on the Guosen security brokerage business to analyze security traders’ brokerage business profit model and give out the development advice. The article hold out that the brokerage business should speed up the transformation, maintain the profit model which has service brokerage as the core. Combining with Guosen security brokerage business development situation, the article bring out below ways to transform the profit model:(1) maintain the original brokerage business advantage and foundation, maintain existing customers, maintain a certain channel commission income to be the fundamental basis of competition.(2) Speed up the construction of a comprehensive customer relationship management, customer classification management and service, and prepare the transition to the service commission model.(3) Try to builds and run "stores", as the prototype of the securities supermarket.(4) Develop investment advisory business, and actively carry out innovative business.(5) Further improve the service quality and standardization.