Brokerage business sees comprehensive recovery, while proprietary trading remains the income "pillar"
In the first half of 2025, listed securities firms delivered exceptionally strong "mid-term exam" results. According to interim report data, 50 listed securities firms (including 8 parent companies) recorded combined operating revenue of 271.224 billion yuan in the first half of the year, up 29.38% year-on-year; combined net profit attributable to shareholders reached 112.443 billion yuan, surging 63.69% year-on-year.
The competition for industry leadership remains fierce: Guotai Haitong Securities Co., Ltd. (601211.SH), reporting for the first time after its merger and reorganization, topped the industry with net profit attributable to shareholders of 15.737 billion yuan, representing a remarkable 213.74% year-on-year increase. However, Citic Securities Company Limited (600030.SH) was the only firm with operating revenue exceeding 30 billion yuan in the first half, far surpassing Guotai Haitong Securities Co., Ltd.'s 23.872 billion yuan.
The recovering market attracted more investors and capital, driving comprehensive recovery in securities firms' brokerage business. Among the 42 listed securities firms that disclosed this data, all recorded year-on-year increases in net brokerage fee income during the first half. However, proprietary trading remains the most profitable business for securities firms, with industry-wide revenue from this segment growing 53.53% year-on-year, and over 80% of firms seeing increased proprietary trading income.
10 Securities Firms' H1 Net Profit Exceeds Full-Year 2024
Securities firms that faced significant pressure in the first half of 2024 have delivered impressive interim reports following last year's September market rally and this year's "slow bull" market. All 50 listed securities firms recorded year-on-year growth in net profit attributable to shareholders in the first half, with remarkable increases: 11 firms saw growth exceeding 100%, with 2 of these posting increases over 1,000%. Meanwhile, Guangdong Golden Dragon Development Inc. (000712.SZ) and Tianfeng Securities Co.,Ltd. (601162.SH), both loss-making last year, returned to profitability.
Looking at the top ten rankings by net profit attributable to shareholders, the list remained unchanged, but positions shifted. The top ten firms by net profit attributable to shareholders in the first half were: Guotai Haitong Securities Co., Ltd. (15.737 billion yuan), Citic Securities Company Limited (13.719 billion yuan), Huatai Securities Co., Ltd. (601688.SH) (7.549 billion yuan), China Galaxy Securities Co., Ltd. (601881.SH) (6.488 billion yuan), Gf Securities Co.,Ltd. (000776.SZ) (6.47 billion yuan), East Money Information Co.,Ltd. (300059.SZ) (5.567 billion yuan), Guosen Securities Co.,Ltd. (002736.SZ) (5.367 billion yuan), China Merchants Securities Co.,Ltd. (600999.SH) (5.186 billion yuan), China Securities Co., Ltd. (601066.SH) (4.509 billion yuan), and China International Capital Corporation Limited (601995.SH) (4.33 billion yuan).
China Merchants Securities Co.,Ltd. dropped from 4th place last year to 8th this year, marking the largest ranking decline among leading firms and being the only one among these ten with single-digit net profit growth.
With the help of merger and reorganization, Guotai Haitong Securities Co., Ltd. jumped from third to first place in net profit rankings, joining Citic Securities Company Limited as the only two firms with net profit attributable to shareholders exceeding 10 billion yuan in the first half.
Beyond market recovery effects, the low base of net profit attributable to shareholders last year also contributed to this year's significant rebound. For example, Huaxi Securities Co.,Ltd. (002926.SZ) made asset impairment provisions of 311 million yuan in the first half of 2024, reducing net profit by 233 million yuan and resulting in net profit below 40 million yuan, ranking third from bottom in the industry. This year's first half saw Huaxi Securities Co.,Ltd. achieve net profit attributable to shareholders of 512 million yuan, up 1,195.02% year-on-year.
Guolian Minsheng Securities Company Limited (601456.SH) saw net profit attributable to shareholders surge 1,185.19% year-on-year, reflecting the "1+1>2" effect from the former Guolian Securities' acquisition of Minsheng Securities.
Notably, 10 securities firms earned more net profit in the first half than they did for the entire year 2024: Orient Securities Company Limited (600958.SH), Founder Securities Co.,Ltd. (601901.SH), Guolian Minsheng Securities Company Limited, Harbin Hatou Investment Co.,Ltd. (600864.SH), Central China Securities Co.,Ltd. (601375.SH), Guosheng Financial Holding Inc. (002670.SZ), Xiangcai Co.,Ltd. (600095.SH), Guangdong Golden Dragon Development Inc., Polaris Bay Group Co.,Ltd. (600155.SH), and Tianfeng Securities Co.,Ltd.
Why Did 13 Securities Firms Significantly Revise Down Last Year's Revenue Data?
In terms of operating revenue, the most direct change from performance recovery was the significant expansion of the "10 billion club" from 4 firms last year to 10 firms. The firms in this category for the first half were: Citic Securities Company Limited (33.039 billion yuan), Guotai Haitong Securities Co., Ltd. (23.872 billion yuan), Huatai Securities Co., Ltd. (16.219 billion yuan), Gf Securities Co.,Ltd. (15.398 billion yuan), China Galaxy Securities Co., Ltd. (13.747 billion yuan), China International Capital Corporation Limited (12.828 billion yuan), Shenwan Hongyuan Group Co., Ltd. (000166.SZ) (11.695 billion yuan), Guosen Securities Co.,Ltd. (11.075 billion yuan), China Securities Co., Ltd. (10.74 billion yuan), and China Merchants Securities Co.,Ltd. (10.52 billion yuan).
From a year-on-year growth perspective, Guolian Minsheng Securities Company Limited achieved "cliff-like" leadership with 269.4% growth, followed by Guotai Haitong Securities Co., Ltd., Tianfeng Securities Co.,Ltd., Changjiang Securities Company Limited (000783.SZ), Founder Securities Co.,Ltd., and Guosen Securities Co.,Ltd., all with revenue growth exceeding 50%.
However, it was noted that 13 securities firms significantly revised down their first-half 2024 revenue data in their interim reports, and after these adjustments, their year-on-year revenue growth rates improved substantially. Huatai Securities Co., Ltd., China Galaxy Securities Co., Ltd., Orient Securities Company Limited, Soochow Securities Company Limited (601555.SH), and Sealand Securities Co.,Ltd. (000750.SZ) saw their revenue growth rates turn from negative to positive.
After reviewing the interim reports of these 13 securities firms, accounting standard changes were found to be the fundamental cause of data adjustments. On July 8 this year, the Ministry of Finance issued "Implementation Q&A on Accounting Treatment Related to Standard Warehouse Receipts," requiring that when enterprises frequently sign contracts to buy and sell standard warehouse receipts at futures trading venues to earn spreads without taking physical delivery, the difference between received consideration and the book value of sold standard warehouse receipts should be recorded as investment income rather than sales revenue. Enterprises holding unsold standard warehouse receipts at period-end should report them as other current assets.
Affected by this, these 13 securities firms reclassified the spreads from buying and selling standard warehouse receipts, originally recorded as other business income last year, to investment income, while also adjusting other business costs and other data, leading to significant downward revisions in last year's operating revenue data.
Proprietary Trading Remains the Most Profitable Business
Excluding 8 parent companies, Citic Securities Company Limited ranked first in net fee income for all four major securities business lines - brokerage, investment banking, asset management, and proprietary trading - and was the only firm with proprietary trading revenue exceeding 10 billion yuan in the first half, demonstrating strong comprehensive capabilities.
Proprietary trading remains the most profitable business for securities firms (calculated as "proprietary trading revenue = fair value change gains + investment income - investment income from associates and joint ventures"). The 42 firms recorded combined proprietary trading revenue of 112.354 billion yuan in the first half, up 53.53% year-on-year. The four firms with the largest year-on-year increases in this revenue were Changjiang Securities Company Limited, Guolian Minsheng Securities Company Limited, Huaxi Securities Co.,Ltd., and Zheshang Securities Co.,Ltd. (601878.SH), with increases of 668.35%, 458.78%, 245.09%, and 146.38%, respectively.
Securities firms' brokerage business also recovered significantly. All 42 securities firms achieved year-on-year growth in net brokerage fee income in the first half, with combined net income of 63.454 billion yuan, up 43.98% year-on-year. Excluding the two "new" firms Guolian Minsheng Securities Company Limited and Guotai Haitong Securities Co., Ltd., the other 40 firms all posted year-on-year growth rates exceeding 15% in net brokerage fee income, with 33 firms seeing increases above 30%.
The return to normal IPO pace drove 42 securities firms' combined investment banking fee income to grow 18.11% year-on-year to 15.53 billion yuan in the first half. Huaan Securities Co.,Ltd. (600909.SH) performed best with 115 million yuan in this revenue category, up 245.84% year-on-year, even surpassing Guolian Minsheng Securities Company Limited (214.1%) for the industry's top growth rate.
According to interim reports, Huaan Securities Co.,Ltd. completed 1 ChiNext IPO project (Hefei Hengxin Life Science And Technology Co., Ltd. (301501.SZ)), 1 major asset disposal project for a Shenzhen-listed company (Jiawo Food), 1 NEEQ listing project (Huita Science), and 2 NEEQ private placement projects (Wuhan Shendong, Hanhe Color Spinning). Additionally, the firm successfully pushed through Anfu Technology's M&A project, saw MagTek Technology's M&A project registration take effect, and has Jiuhua Tourism's refinancing project under review.
14 securities firms saw year-on-year declines in investment banking fee income. Central China Securities Co.,Ltd. (601375.SH) recorded the lowest income at just 5.6539 million yuan, down 77.9% year-on-year. The interim report showed the company had no IPO or M&A transactions in the first half.
Asset management was the only business line with declining industry-wide total revenue. The 42 firms recorded combined asset management revenue of 21.196 billion yuan in the first half, down 2.72% year-on-year. Huatai Securities Co., Ltd., a leading firm, saw the largest decline in this revenue category, with net asset management fee income of 893 million yuan in the first half, down nearly 60% from 2.22 billion yuan in the same period last year.
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