Levin Wang of Huatai Financial Holdings: Controlling risk exposure while driving company growth
Inside the Sell Side
Levin Wang
CEO | Huatai Financial Holdings (Hong Kong) Limited
Levin Wang Lei is the CEO of Huatai Financial Holdings (Hong Kong) Limited, the flagship of Huatai Securities’ overseas business. He is a tried and tested industry veteran with years of experience leading Chinese and global investment banks and a deep knowledge of Chinese finance. As a noted expert in economic theory, he is also an adjunct professor at the Central University of Finance and Economics in Beijing.
Over the past decades, Chinese investment banks have become a significant force in Hong Kong’s capital market. At Huatai, our aim is to be a reputable securities house that not only cares about our profits but also our impact on society. We make substantial investments in earning our investors’ trust and respect, with the belief that Chinese investment banks will be increasingly influential in the international financial market.
Q. How does your ‘technology driven strategy’ work in your international business expansion plans?
Technology is at the heart of our international business strategy. Our parent company, Huatai Securities, has been a leader in this arena, far outpacing all other Chinese securities firms with 1.95 billion yuan in information and technology investments last year. Empowered by proprietary technology in big data and financial product platforms, it is able to deliver world-class client services and experiences.
From Huatai Financial in Hong Kong – Huatai’s main launch pad for international business – we have leveraged this technology-driven model to expand our service offerings, increase our investor influence, and strengthen our wealth management and securities trading businesses. As a result, from 2017 to 2020, our assets grew tenfold to more than HK$100 billion.
We are also the first Chinese investment bank to develop a mobile wealth management platform – ZhangLe Global – targeted to Chinese retail investors worldwide. Within six months of launching, registered users on the platform surged sixfold.
Huatai has been using technology to improve sales and trading capabilities to meet the increasingly sophisticated demands from onshore and offshore clients.
In 2016, Huatai acquired AssetMark, an integrated platform that serves thousands of independent financial advisors in the United States. This acquisition was the first of its kind by a Chinese securities company, which contributed to the further expansion of its international business. The company will further develop AssetMark’s product capabilities to retain its industry leading position in the US.
Q. What are some of the challenges that you face and how this has been solved?
As with other financial industry players, we are facing challenges from global macroeconomic uncertainties and market volatilities such as tightening monetary policies and inflation risks. There is fierce competition, especially from international investment banks, over market share development and talent acquisition.
Huatai’s clear strategic focus on cross-border business and intermediary services in the capital market allows us to focus on business growth, with a relatively limited and controlled risk exposure. We are also able to leverage our strengths in market knowhow and connections in the Chinese market to maintain our competitive edge.
Huatai’s clear strategic focus on cross-border business and intermediary services in the capital market allows us to focus on business growth, with a relatively limited and controlled risk exposure.
Q. The market for Chinese retail investors trading offshore is growing rapidly. How are you using technology to tap this market?
We are attracting Chinese retail investors through two fast growing business units – private wealth management and fintech units – to offer customized and innovative solutions for our clients.
For example, the ZhangLe Global mobile application allows onshore customers who are looking to invest abroad and offshore clients who are interested in the mainland Chinese market to trade stocks listed in Hong Kong, US, Singapore, and mainland China without paying commission and fees. The app offers investment choices such as FX trading and publicly offered funds, and will soon be outfitted with additional AI-based features.
Mobile technology has significantly changed the way people invest. Our goal is not only to help investors invest in global markets at lower costs, but also to share good investment strategies and solutions with clients.
Our private wealth management business also leverages the strength of our investment banking and cross-border trading capabilities. We target family offices and small asset management firms with tailor-made solutions.
Q. How do you stay ahead of peers who have backings from tech giants?
While our competitors entered the overseas retail market at an earlier date, we have caught up quickly thanks to our ZhangLe Global app. This is because we offer a comprehensive suite of products and services that leverage our investment banking and markets capabilities.
Our strong capital base also allows us to provide affordable and sizable financing to our customers. At the same time, we continue to invest in cutting-edge technology to improve our fintech business.
Huatai’s extensive retail client base in mainland China gives us another considerable advantage. In 2014, our parent company launched ZhangLe Wealth – a mobile application targeted to mainland customers – that has become the top brokerage app in China with monthly active users surpassing 10 million.
Q. What are the biggest opportunities you see in the year ahead?
The biggest opportunities are in cross-border business as the Chinese government continues to reform and open up financial markets. As an important international financial center, Hong Kong plays a critical role in this process.
Because of China’s quick recovery from the pandemic, foreign investors have increased their holdings of Chinese assets through various cross-border channels since early 2020. The central government has also been encouraging domestic investors to start investing in offshore markets, including through the upcoming Southbound Bond Connect. The increasing capital flows into and out from China present a significant opportunity for Chinese investment banks, and we will be able to capitalize on this to become a market maker that can facilitate these flows.
With the combination of our market knowledge and familiarity with Chinese firms and their financial needs, we are well positioned to further expand our cross-border business.
Q. Name the top three things you want changed in your industry and how can this be done?
Over the past decades, Chinese investment banks have become a significant force in Hong Kong’s capital market. At Huatai, our aim is to be a reputable securities house that not only cares about our profits but also our impact on society. We make substantial investments in earning our investors’ trust and respect, with the belief that Chinese investment banks will be increasingly influential in the international financial market.
We would like to see more innovation from brokerage firms in Hong Kong, which have fallen behind banks and insurance companies in their access to market, scale and management. As a result, they are in a disadvantaged position in product offerings and innovation investments. Strategic partnerships or deeper collaboration with fintech platforms and tech giants could be a way for them to remain competitive in the industry.
Green finance is also pivotal to how the financial industry develops in the future, as investors are increasingly concerned with the types of investments funds are making. We believe that ESG frameworks will become more important not only to assess risks and to identify value creation opportunities, but also to manage portfolios and ultimately deliver better returns. We want to help sustainable businesses raise capital and offer more sustainable assets to clients. We encourage the industry to come together to drive this trend and hope regulators can implement more supportive policies for sustainability.