The interim performance reports for brokerages in the first half of 2026 are gradually being disclosed, with firms like GTHT and CITIC SEC showing impressive results. GTHT, as the first brokerage to report a semi-annual net profit exceeding 20 billion yuan, has set a new historical high for its half-year performance. CITIC SEC is expected to achieve a net profit of over 10 billion yuan for the first half, also reaching a record high for the same period.
Analyst Wang Siyue from CICC forecasts that the combined net profit attributable to shareholders of 42 listed brokerages for the first half of 2026 will increase by 50% year-on-year. "Benefiting from three main business drivers—technology innovation investment, international business, and the wealth management sector—the brokerage industry is expected to achieve steady overall growth in 2026."
Three Key Growth Drivers
Firstly, the technology innovation investment business is entering a realization phase. A recovery in IPO issuance coupled with a warming market for the STAR Market is driving sustained profit releases from primary market businesses such as investment banking, direct investment, and alternative investments.
Secondly, the expansion of international business is accelerating. In the first half of 2026, three leading brokerages have already announced capital increases for international business development. It is expected that the leverage of overseas subsidiaries of top brokerages is also rising rapidly, while the impact from restrictions on southbound cross-border total return swaps and exchange rate risks is limited.
Thirdly, the wealth management sector is benefiting from the equity market rally. The strengthening market directly benefits brokerage, margin trading, distribution, and asset management segments. Subsequently, the continued positive performance of actively managed equity funds is also expected to further boost product market share.
Market at a Crossroads of High Expectations and Elevated Valuations
The brokerage sector is currently at a juncture where "strong expectations" meet "high valuations." On one hand, leading brokerages represented by GTHT have validated the profit improvement thesis with solid results. On the other hand, stocks that saw their gains front-loaded are undergoing necessary technical corrections. The market is shifting from broad-based gains to divergence, with future performance increasingly dependent on the alignment between individual companies' earnings delivery and their current valuation levels.
Zhao Ran, Chief Non-Bank Financial Analyst at China Securities, noted in a research report that brokerage interim performance forecasts have exceeded expectations, with M&A integration and tech innovation business synergies driving a systematic uplift in the sector's ROE, indicating significant room for valuation repair. The clear divergence between valuation and industry fundamentals suggests potential for a correction in expectations.
Chen Fu, Chief Non-Bank Financial Analyst at GF Securities, believes that with sustained capital market activity, brokerage sector performance continues to trend upward, yet valuations have lagged, pointing to room for subsequent recovery. As funding pressures ease and incremental capital continues to enter the market, and with public funds strengthening performance benchmarks, there is substantial room for improvement in both the valuation and positioning of the brokerage sector. Enhanced tech innovation attributes are also boosting profit elasticity and growth trends.
It is worth noting that several sell-side research reports have suggested that industry divergence may intensify further. Sun Ting, Chief Non-Bank Financial Analyst at Soochow Securities, mentioned in a report that the trend of concentration towards leading firms is clear, with consolidation accelerating the divergence. The long-term divergence in profitability between top and smaller brokerages will inevitably drive industry consolidation and resource concentration. China's securities industry is accelerating the construction of a multi-tiered capital market intermediary system. Large, comprehensive leading brokerages are focusing on capital-intensive, institutional, and cross-border business areas. Regional and specialized mid-sized brokerages are deepening their roots in local resources, serving regional industrial clusters or specific verticals to build niche, specialized capabilities.
Related Stocks
HKEX (00388): Goldman Sachs released a report stating that HKEX's earnings per share for Q1 2026 were HK$4.1, representing year-on-year and quarter-on-quarter growth of 27% and 20% respectively, which was 11% higher than the bank's and market consensus estimates. The bank expects a positive stock price reaction. The better-than-expected performance was mainly driven by strong cash trading and clearing fees, depository and custodian service fee income, coupled with increased listing fee income and rising investment income from derivatives and commodities. Goldman Sachs maintains a "Buy" rating on HKEX with a target price of HK$528.
CITIC SEC (06030): CITIC SEC released its Q1 report for the period ended March 31, 2026. The group achieved operating revenue of RMB 23.155 billion, a year-on-year increase of 40.91%. Net profit attributable to shareholders of the parent company was RMB 10.216 billion, a year-on-year increase of 54.6%. Basic earnings per share were RMB 0.67.
CICC (03908): On July 8, CICC announced that it expects to achieve a net profit attributable to shareholders of the parent company in the range of RMB 7.708 billion to RMB 8.227 billion for the first half of 2026. Compared with the same period last year, this represents an increase of RMB 3.378 billion to RMB 3.897 billion, a year-on-year increase of 78% to 90%.
GTHT (02611): GTHT announced that, based on preliminary calculations, the group expects to achieve a net profit attributable to owners of the parent company in the range of RMB 20.003 billion to RMB 20.511 billion for the first half of 2026. Compared with the same period last year (RMB 15.737 billion, including negative goodwill from a merger), this represents an increase of RMB 4.266 billion to RMB 4.774 billion, a year-on-year increase of 27% to 30%.
Comments