The perception of Huatai Securities Co., Ltd. lagging behind its peers raises a critical question: is this perception accurate? While major securities firms have reported double-digit profit growth, Huatai's net profit attributable to shareholders grew by a seemingly modest 6.72%, making it appear as an outlier. Observers have been quick to conclude that Huatai is falling behind. However, a deeper examination reveals a different story.
A closer look at the financial reports of A-share listed securities firms shows impressive results from leading institutions. For instance, CITIC Securities reported a net profit attributable to shareholders of 39 billion yuan, a 38% year-on-year increase. Guotai Junan Securities and Haitong Securities reached 27.8 billion yuan, surging by 113%. Even the industry average achieved approximately 20% growth. In contrast, Huatai Securities reported 16.383 billion yuan, a 6.72% increase. This single-digit growth rate seems out of place among its top-tier peers, fueling the narrative of underperformance.
Yet, examining the next line of the income statement reveals a stark contrast. Huatai's net profit attributable to shareholders after deducting non-recurring items was 16.268 billion yuan, surging by 80.08% year-on-year.
Why is there such a significant discrepancy between the two figures in the same financial report? The answer lies in the sale of AssetMark. In 2024, Huatai Securities proactively divested its entire stake in its U.S. subsidiary, AssetMark, a turnkey asset management platform. This transaction generated a one-time investment gain of 6.336 billion yuan for Huatai. At the time, the market applauded the move as a well-timed exit, locking in substantial profits. However, this previously celebrated decision later became a burden on the company's valuation during the 2025 reporting season. The high base effect from the non-recurring gain in 2024 artificially suppressed the apparent growth rate of net profit attributable to shareholders in 2025 to a single digit. This is not a sign of operational decline but a simple arithmetic outcome: comparing a year with a significant one-time gain to a normal operating year inevitably distorts the growth figure. The true performance of the core business is not reflected in this one-time item.
Furthermore, the sale of AssetMark was initially interpreted as a negative development, leading to a 46.75% decline in international business revenue and a sharp contraction in assets under management. However, these changes were structural consequences of the divestiture, not indicators of diminished competitiveness. Excluding the impact of AssetMark, Huatai's international business revenue actually grew by 23.82% in 2025, demonstrating robust organic growth.
The 80.08% growth in net profit after non-recurring items is not an isolated figure. It is supported by a comprehensive recovery in core business segments. In wealth management, a flagship business, revenue reached 15.864 billion yuan in 2025, a 29.85% increase, accounting for 44.30% of total revenue and solidifying its position as the primary income source. Brokerage net income was 9.122 billion yuan, up 41.50%, while net income from financial product distribution surged 53.68%. The margin financing balance exceeded 170 billion yuan, with a market share of 7.25%, both setting new records. The strategic significance of wealth management extends beyond revenue. Huatai pioneered the industry's first AI-native financial trading terminal, the "AI Zhang Le" app, creating an intelligent ecosystem that integrates information acquisition, strategy research, and trade execution. While competitors were still discussing AI concepts, Huatai had already integrated AI into its trading workflow, building a substantial competitive advantage.
In investment banking, a highly competitive arena, Huatai achieved a remarkable turnaround with revenue of 3.099 billion yuan, a 47.8% increase. It underwrote 16.3 billion yuan in A-share IPOs and 29.7 billion HKD in Hong Kong IPOs, capturing a 9.35% market share. The firm also led the industry in the number of approved and registered M&A and restructuring projects where it acted as the independent financial advisor.
The investment management business reported revenue of 3.959 billion yuan, a significant 176.35% increase, driven by valuation gains in private equity and alternative investment projects. Following the sale of AssetMark, Huatai's international business is shifting its focus towards higher value-added cross-border investment banking and wealth management, with structural optimizations yielding positive results.
Regarding proprietary investments, while most major brokers reported substantial gains, Huatai's performance appeared relatively subdued. This requires nuanced analysis. First, the high base in 2024, which included contributions from AssetMark, negatively impacted the apparent growth rate. Second, Huatai is strategically shifting its proprietary business from capital-intensive directional investments towards client-driven neutral strategies, aligning with models like CITIC's. The short-term slowdown in revenue growth is a natural part of this strategic transition, fundamentally different from inherent weaknesses. In contrast, the asset management business does face a challenge with its lagging development in the equity ETF product line, which requires focused management attention.
Another significant but often overlooked growth dimension is balance sheet expansion. The company's total assets exceeded 1 trillion yuan by year-end, a 32% increase from the start of the year. Financial assets reached 476 billion yuan, up 15.41%. The expansion in derivatives business is creating capacity for future client-driven proprietary and cross-border operations.
So, what has Huatai done correctly? The answer lies in its unwavering strategic focus, unswayed by short-term fluctuations in financial metrics. In 2025, Huatai committed to an "All in AI" strategy. The "AI Zhang Le" app is just one manifestation. In wealth management, AI-powered advisory is enabling hyper-personalized client service. In research, institutional services are evolving from traditional report dissemination to intelligent multi-asset strategy platforms. While the industry grapples with fee compression in traditional brokerage, Huatai has moved the competition to a technology-enabled level. This strategic resolve is the foundation supporting the 80% growth in core profits.
From a long-term perspective, the strategic rationale behind the AssetMark sale is becoming clear in the 2025 report: sacrificing low-value-added passive management income from overseas asset management to reallocate capital towards China's leading tech-driven wealth management and cross-border investment banking sectors. The 80% core profit growth is the first positive validation of this strategic decision.
In essence, Huatai's 2025 performance tells a story of shedding old burdens and igniting new engines. The market may focus on the 6.72% headline profit growth. However, seasoned observers recognize the 80.08% core profit growth as the true measure of business competitiveness. The former is an accounting figure; the latter reflects genuine commercial strength.
Naturally, no securities firm is without challenges. Key questions remain for Huatai: when will its asset management business achieve a breakthrough in its ETF product line? How will it manage the timing of directional proprietary investments? When will new growth drivers for its international business, post-AssetMark, fully materialize? These issues require ongoing monitoring.
For investors with a long-term perspective, the fundamental question is this: would you prefer to invest in a company that relies on selling subsidiaries to flatter its accounts, or one that, after shedding non-core assets, demonstrates robust growth across its fundamental operations? Huatai's 2025 results effectively close the chapter on the former and mark a promising beginning for the latter.
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