Hua'an Securities' Chu Jun: Deep Industry Cultivation Is Key for Small and Mid-Sized Brokerages to Build Moat

The "2026 Financial Institutions Annual Conference & Securities Investment Banking Forum," hosted by Securities Times, was recently held in Shenzhen. In a keynote speech, Chu Jun, Secretary of the Board of Directors of Huaan Securities and Chairman of Huafu Ruixing, stated that China's securities industry is standing at the most profound crossroads of differentiation in over 40 years. This represents a structural transformation driven by the upgrading of industry production factors and is an inevitable path toward industry maturity.

During this process, small and mid-sized brokerages face a "medium-scale" bottleneck. Relying solely on cost control, market expansion, and risk management is no longer sufficient to achieve upward breakthroughs. Instead, these firms must lead differentiated and specialized development through deep industry cultivation, building their own moats.

Industry Calls for "Small but Beautiful" Specialized Investment Banks

The securities industry continues to encourage small and mid-sized institutions to concentrate resources on niche segments, specialized client groups, and key regional markets. The goal is to cultivate "small but beautiful boutique investment banks, specialized investment banks, and specialized service providers."

Huaan Securities has chosen to leverage resources from Anhui Province and the Yangtze River Delta region, focusing on several high-growth industrial tracks. By deeply cultivating these industries, the firm aims to share in the dividends of industrial growth.

"Deep industry cultivation is a difficult but correct thing to do. Only by doing this difficult but correct thing can small and mid-sized brokerages build their core capabilities," Chu Jun said.

Building an "Industry Investment Bank": Core Challenges and Strategic Framework

According to Chu Jun, the core challenge of becoming an industry-focused investment bank lies in translating the concept of "industry" from a strategic document into an organizational behavior model and value standard, thereby fostering a complete set of cultural genes for serving industries.

Huaan Securities began by selecting its tracks and establishing a "3+2+X" industrial target system:

• Three leading industries
• Two emerging industries
• X future industries

The selection criteria follow three dimensions, termed "Heaven's Timing, Geographical Advantage, and Human Harmony":

1. Heaven's Timing: Industry prospects and policy direction
2. Geographical Advantage: Anhui's industrial base and research capabilities
3. Human Harmony: Huaan Securities' own talent and capital reserves

The "12345" Action Roadmap

Around this system, Huaan Securities has proposed a "12345" action roadmap:

• 1 role positioning: "Industry Partner"
• 2 core capabilities: Industrial services and resource integration
• 3 core mechanisms: Chain-chief system, task-force system, and digital platform
• 4 value transformations: Research to investment, investment to investment banking, services to wealth management, and clients to ecosystem
• 5 development safeguards: Organization, talent, resources, culture, etc.

The Three Core Mechanisms

The three core mechanisms are considered the most distinctive features of Huaan Securities' roadmap:

1. Chain-Chief System (Addressing coordination): A senior executive is designated as the "chain chief" for each key industry track. Within compliance boundaries, this chief can mobilize investment banking, investment, and research resources related to that industry.

1. Task-Force System (Addressing implementation): Through regional industry service task forces, sponsor representatives are deployed to regional stations. Together with investment personnel and branch offices, they form an "iron triangle" combat unit, truly embedding the "three-investment linkage" (investment banking, investment, and research) at the regional level.

1. Digital Platform (Addressing knowledge accumulation): By building an intelligent middle platform for industrial clients, individual knowledge and understanding of industries are transformed into organizational capabilities that can be accumulated and reused.

Case Study: The Long-Term Bet on ChangXin Memory Technologies

"Even five years ago, investing in ChangXin Memory Technologies (CXMT) was by no means a sure profit," Chu Jun said, reflecting on the decision made five years ago. At the time, the memory chip sector faced extremely high technical barriers, massive capital requirements, and a highly concentrated international competitive landscape, making the path to domestic production highly uncertain.

Nevertheless, Huaan Securities made the firm decision to invest. The company recognized that memory chips serve as the industrial foundation of the digital economy and are critical to the security and self-sufficiency of the industrial chain.

Chu Jun noted that years of practice have increasingly led Huaan Securities to understand that functionality is a prerequisite for profitability. In the long run, the two are unified. "Doing difficult but correct things is not only a fulfillment of a securities company's functional mission but also the most sustainable development path for small and mid-sized brokerages," he concluded.