Got a job offer to work in a securities company (prob 2nd or 3rd tier) in a major city (think Beijing/Shanghai) in mainland China. Does anybody know anything about sell-side equity research in China? Are the local firms more respected or are BB's more respected?
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Hi -- American here who recently lived in Shanghai for year and a half. My company took its China arm public in HK and in addition to working the IPO, I ran IR for the newly listed company and worked very closely with BB and local banks in China. We're covered by 20+ analysts so I saw a broad spectrum of analysts.
First off, just so you are aware, for intl BB banks to have a presence in mainland China they typically have to partner with a local firm. Ie GS operates under a Gao Hua Securities JV.
We were HK listed (H-shares), so our coverage and investor based was a bit more international and with that intl exposure, our BB coverage had more weight and generally had more access to mgmt. That said, much of our local coverage had developed niche's within the mainland market and that was quite valuable too us as well; especially with some of the larger, local hedge funds. That said, the A-share market (mainland) is very retail driven and I imagine that can be frustrating from a local research standpoint. The BB deal a lot less with the retail guys. Also, there is no shorting on the a-share market and valuations as a result of the big retail presence and lack of shorting can be astronomical, which can make providing research/recommendations on companies difficult, given the price a lot of these companies trade at, especially those on the Shenzhen exchange.
Without knowing your background (do you speak mandarin, are you planning on moving back to the US/Europe), I would prefer to be at a BB whose coverage entails a blend of H share and A share companies. You'll also have more exit opps if you move back from China.
Kind of rambling so I apologize, but hope this adds some color.
MKM, thanks so much for the reply. To give you a little bit of background, I am a Chinese citizen, and received my education in the US. I plan to go to a top MBA program in the US in a few years.
I have to agree with you that BBs are more international but I am having a hard time getting interviews although I had sell-side ER experience in the US. Any advice on where/how I can network with Americans working in Shanghai/Beijing?
Once you're living in Shanghai, I would join meetup.com. There were several financially-oriented networking events I attended through that website, that were helpful. Moreover, LinkedIn can prove to be a useful resource. Especially if you can find some expats working at a BB target. 95% of expats--myself included--would be happy to meet up for a beer with a fellow american that moved to Shanghai and was working in the industry.
You're asking at the wrong place. Most people on this forum don't know anything about ER in China, especially A-share coverage. It operates in a completely different manner.
Yes, Chinese securities firms are way more respected in A-share coverage mainly because BB are kind of out of touch.
BB research generally don't participate in New Fortune rankings. So I would say it's better to cover A-shares with a respected local securities firm (Citic/HT/GF/GTJA etc.) than a lower tier BB. This also applies even if you're doing H-share/International market. but the latter is debatable.
Your best bet is to find alumni or high school friends (assuming you went to the US for tertiary education only) and try to network from there. Network as important, if not more, as your research skills.
Equity Research in Hong Kong and China? (Originally Posted: 06/03/2010)
Maybe a dumb question - do equity researchers in Hong Kong or China write research reports in Chinese? (I should kick myself in the head but just want to confirm) How about in English?
English in HK and China but it depends. Big banks write in English...
Thank you sir.
What about in France, Japan, or in Germany?
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