Good morning Vietnam: Chinese brokers eye neighbouring springboard for overseas expansion
When Wang Junhong was helping Chinese brokerage Guotai Junan International establish a foothold in Vietnam, he had to knock on the door of a familiar Chinese bank. As part of the Hong Kong-based firm’s expansion into Southeast Asia, it had acquired a controlling stake of a small Vietnamese securities company in 2019, but it still needed financing to expand its operation. Wang, now chairman of…
Good morning Vietnam: Chinese brokers explore neighboring Vietnam as a gateway for expansion
Wang Junhong, chairman of Guotai Haitong Securities (Vietnam), recounts his early days establishing the firm's presence in Vietnam. In 2019, the Hong Kong-based company acquired a controlling stake in a small Vietnamese securities company, but still needed financing to grow its operations. Wang turned to China Construction Bank's branch in Ho Chi Minh City, relying on relationships he built in the industry to secure an early financing arrangement.
The bank's early support marked a significant step for a Chinese financial institution venturing into Vietnam's unfamiliar market landscape. Wang emphasizes the importance of leveraging the strong network Guotai Junan International had built with Chinese firms, as this would help bring core strengths to the Vietnamese operation.
As of 2021, Guotai Junan International held approximately 67% of the locally listed brokerage Vietnam Investment Securities, which had grown from a modest 51% stake acquired in the previous year. The Vietnamese branch currently employs around 70 people and generates annual revenues exceeding HK$10 million (US$1.3 million), having eliminated its accumulated losses.
The expansion of Chinese securities firms into Southeast Asia has been driven by the region's strategic importance as a gateway to China, given its proximity and strong trade ties. China Galaxy Securities, for instance, entered the market through a partnership with Malaysia's CIMB Group in 2017, eventually taking full ownership in 2023. Its international arm, CGS International, has since established a significant presence in Malaysia, Singapore, Indonesia, and Thailand.
Wang notes that mature markets like Singapore have limited room for rapid expansion, which is why Guotai Junan focused on developing economies such as Vietnam. He highlights the country's young population, growing consumer demand, and the still-evolving capital market as factors that make Vietnam an attractive opportunity. Wang draws parallels between Vietnam's economic transformation and China's two decades ago, and believes that Vietnam's emerging consumer appetite for homes, cars, and smartphones will eventually fuel greater demand for investment and financial services.
Written by urgent.news from SCMP Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
