The pace of securities firms expanding overseas continues to accelerate in early 2026, with companies adopting various financing strategies to support their international operations. By February 11, four securities companies had disclosed their latest progress in overseas business development. Huatai Securities Co., Ltd. (601688.SH; 06886.HK) and Gf Securities Co., Ltd. (000776.SZ; 01776.HK) opted to issue zero-coupon convertible bonds in Hong Kong to fund their overseas business expansion. Meanwhile, Huaan Securities Co., Ltd. (600909.SH) and Northeast Securities Co., Ltd. (000686.SZ) received regulatory approval to increase capital for their Hong Kong subsidiaries and establish new subsidiaries in Hong Kong respectively.
The securities industry has shown growing enthusiasm for international expansion in recent years, though the Matthew Effect - where leading players strengthen their dominance - has become increasingly pronounced. While top-tier firms like CITIC Securities and China International Capital Corporation already dominate Hong Kong's IPO market, many mid-sized and small securities companies still face the challenge of establishing their initial overseas presence.
Among the four firms announcing overseas moves, Northeast Securities disclosed that it received regulatory approval to establish Dongzheng International Financial Holdings Limited in Hong Kong with a HKD 5 billion self-funded investment. On the same day, Huaan Securities announced that regulators approved its plan to inject HKD 5 billion in additional capital into its Hong Kong subsidiary, Huaan Securities (Hong Kong) Financial Holding Limited.
Larger securities firms have also intensified their international focus in 2026. Huatai Securities completed the issuance of HKD 10 billion zero-coupon convertible bonds due 2027 on February 10, which will be listed on Vienna MTF operated by the Vienna Stock Exchange. The company expects to raise approximately HKD 9.925 billion to support its overseas business development and supplement working capital. Earlier, on January 7, Gf Securities announced plans to place 219 million new H shares and issue HKD 2.15 billion zero-coupon convertible bonds, with expected net proceeds exceeding HKD 6 billion to fund international business expansion through subsidiary capital injections.
Looking back to 2025, the securities industry has maintained active overseas expansion. More than ten securities firms have undertaken new international initiatives since 2025, including Western Securities and First Capital establishing wholly-owned subsidiaries in Hong Kong, while eight firms including Gf Securities and Guojin Securities increased capital for their Hong Kong subsidiaries. China Merchants Securities notably announced a capital injection of up to HKD 9 billion for its international subsidiary at the end of last year, setting the record for the largest overseas subsidiary capital increase in 2025.
However, the scale and pace of overseas expansion clearly correlate with each firm's resources and capabilities. In Hong Kong's 2025 IPO market, the top ten Chinese securities firms by fundraising amount were all Hong Kong subsidiaries of major players like CICC, CITIC Securities, and Huatai Securities, collectively accounting for 53.96% of market share. China International Financial Hong Kong Securities Limited alone captured 24.23% of fundraising share. In contrast, Hong Kong subsidiaries of mid-sized firms like Industrial Securities and Guojin Securities each accounted for less than 1% of IPO fundraising market share.
Beyond investment banking, leading securities firms have expanded into derivatives and broader international markets. CITIC Securities successfully issued listed warrants in Malaysia in 2025, becoming the first Chinese-backed issuer in the local market. Huatai Securities has established a 24-hour global trading system covering Hong Kong, the United States, and Singapore.
Mid-sized securities firms typically face higher time and regulatory barriers in their internationalization process. Northeast Securities, for instance, first proposed relevant motions in 2016 but only submitted formal applications to regulators last year, taking several years to achieve substantive progress.
Industry analysis suggests that leading securities firms have established two key competitive advantages through early international strategy implementation: licensing barriers, having completed full licensing coverage in major global markets amid tightening regulations, and capital barriers, forming a virtuous cycle of internal capital replenishment through sustained profitability of overseas operations.
Many mid-sized securities firms have established Hong Kong subsidiary structures but achieved limited actual business implementation. Challenges include insufficient capital, weaker attraction for international talent, and lack of cross-border resource accumulation, according to non-banking industry analysts.
Despite varying capabilities, overseas expansion has become an industry consensus. The Securities Association of China noted in its recent practice report that Chinese securities companies are accelerating international layout with steadily expanding overseas assets and growing contribution of international business to parent company profits. The current development pattern features leading institutions advancing through full licensing advantages and scale effects, while mid-sized firms achieve breakthroughs through differentiated strategies.
Case studies include Shanxi Securities' international subsidiary launching the world's first iron ore futures ETF on Hong Kong Exchange, providing overseas investors access to iron ore futures markets while enhancing China's pricing influence in global iron ore futures.
Industry experts suggest that leading and mid-sized securities firms should adopt different overseas strategies. Major players should leverage their strong capital strength and extensive client resources to expand business areas and service networks globally, while mid-sized firms should focus on specific markets or niche segments, such as investment banking services for particular industries or regional markets, or developing specialized financial products and services to establish differentiated competitive advantages.
Having an overseas license remains valuable, with some mid-sized firms currently exploring opportunities in cross-border research services, wealth management, and Southeast Asian markets. Chinese securities firms demonstrate significant advantages in assisting domestic companies' overseas expansion through deep understanding of domestic industrial policies, regulatory communication capabilities, long-established trust relationships with local enterprises, and client networks connecting both markets.
Compared to international investment banks like Goldman Sachs and Morgan Stanley, which reported overseas revenues of RMB 137 billion and RMB 106.6 billion respectively in 2024, Chinese leaders CITIC Securities and CICC reported overseas revenues of RMB 10.9 billion and RMB 5.3 billion, indicating substantial growth potential for Chinese securities firms' international business scale.
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