Huatai Securities hiring ahead of $3b HK IPO

Lu Ting, former economist at Bank of America Merrill Lynch, is among a group of industry veterans joining Huatai Securities in the firm’s run-up to a public listing in Hong Kong.

Chinese broker Huatai Securities is on a hiring spree in Hong Kong as part of a campaign to raise its profile and capability in overseas markets in advance of its H share listing, which is expected to raise $2 billion to $3 billion.

Shanghai-listed Huatai Securities has recently hired Lu Ting, chief Greater China economist at Bank of America Merrill Lynch, as head of research, according to two sources familiar with the situation. Lu will start the new role in Huatai’s Hong Kong office in a couple of months, one source said.

Lu, an award-wining China economist, joined BofA Merrill in 2006 after he received his doctoral degree from the University of California at Berkeley.

The news of Lu’s leaving BofA Merrill was first reported by a Chinese newspaper last week.

Huatai is looking to acquire talent to fill key roles. Patrick Ngan recently joined as head of equity capital markets, after serving on the ECM team at UBS, while Huatai has also poached two ECM bankers from HSBC, according to a source familiar with Huatai’s activity.

Ngan was a senior director in wealth management at UBS. Previously he served as head of equity syndicate and block origination in Asia at RBS, and before that was head of Taiwan ECM at UBS.

Companies preparing a public offering often hire people from investment banks, in order to make their financials, accounts and senior management look capable. “But Huatai Securities itself is an investment bank and, as far as I know, is willing to spend a lot in hiring from global peers,” said the source.

Hong Kong IPO

The firm filed on Tuesday for its Hong Kong listing, which is expected to come to the market as soon as late May.

The broker is looking to hold an analyst presentation later this month for the IPO. It will also invite more banks as joint bookrunners to help it sell up to 20% of an enlarged capital base. Huatai has to compete with other Chinese brokers seeking to tap the Hong Kong IPO market, including rival GF Securities, which aims to raise $2 billion to $3 billion in a listing this month.

JP Morgan and UBS are joint sponsors for Huatai Securities’ IPO, as is the firm’s affiliated, Hong Kong-based unit, Huatai Financial.

Huatai Securities is based in Nanjing; its largest shareholder, with a 23.52% stake, is the Jiangsu provincial government.

Huatai Securities plans to put its IPO proceeds to develop its margin finance and investment banking activities, which are capital-intensive, as well as to support commission-based investment and trading operations, according to the preliminary listing file on the Hong Kong Stock Exchange website. The filing, citing data from Wind Info, said Huatai ranked first in brokerage trading volumes of stocks and funds among mainland securities houses in 2014. It was the fifth-largest securities firm in China by both total assets and net assets as of June 30, 2014.

Huatai Securities posted a Rmb4.49 billion ($718 million) net profit in 2014, double the previous year, as revenue grew 76% to Rmb15.7 billion over the same period.

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