During my internship thus far, I’ve learned a lot about the investment banking industry. I used to envision the industry consisting of a few giants that control most of the large investments made in stocks, but that is far from the truth. Many small investment banks also exist and are successful as well. Banks such as China Capital make investments in small to medium sized companies where they see room for growth, many of which do not even trade stocks publicly. Banks like these give mid-size businesses the chance to grow.
China Capital has many strengths, especially within its personnel. Nearly all of China Capital’s employees have international study experience, so they understand the facets of international finance. They also have many employees who can speak decent English. Furthermore, their offices are good for meeting business connections in the thriving cities of Beijing and Shenzhen, although they lack presence in Shanghai. China Capital also has enough capital available to invest in businesses that are already largely thriving, such as Noble Family Wine, which already has over 3,000 locations in China.
China Capital is not perfect, however. Some issues have the potential to hurt their growth. There are internal communication issues that could be harmful. Employees too often seem to not know what project they should be focusing on, when deadlines are, and when events are happening. Our supervisor is rarely updated with these details even when they should be readily available. These issues make China Capital perform less efficiently than they could. Furthermore, they risk making a poor investment due to a lack of thorough research. When my co-intern and I asked about the financial details and projections of a potential business to invest in, employees seemed unfamiliar with the business, but they were ready to invest anyway. If they do not perform their due diligence, they could make a poor investment that will lose them lots of money.
These weaknesses won’t necessarily hinder China Capital, though. They have have the opportunity to continue growth by paying attention to the Chinese marketplace and perhaps international commerce to find investments that provide large returns. Potential investments can be better evaluated with more thorough research and financial models for the projects. Improvements in internal communication can help this task, too. Furthermore, new branches in Shanghai or even abroad can help China Capital expand to even more flourishing regions.
China Capital’s future does contain looming threats, however. Due to the current conditions of the Chinese economy, the government may intervene and regulate investments differently than before. They could even lose investments to other banks or even business incubators.
Overall, China Capital has a potential for fantastic growth in the next few years, perhaps even with international expensively. Based on the skills and knowledge of their employees, they will likely overcome their threats improve their areas of need.
Traditional Chinese lunch with China Capital colleagues to discuss a potential investment project.