As the market enters the interim reporting season, several leading securities firms have released their preliminary financial results.
According to data, as of July 11th, nine listed brokerages have disclosed their performance forecasts for the first half of 2026, including major institutions such as Guotai Haitong (601211.SH), CITIC Securities (600030.SH), and China International Capital Corporation (CICC) (601995.SH). All these companies are reporting positive earnings.
Three firms have entered the "10-billion-yuan net profit" club. CITIC Securities expects its first-half attributable net profit to reach 23.343 billion yuan, an increase of nearly 70% year-on-year, temporarily leading the performance rankings. Guotai Haitong and China Merchants Securities (600999.SH) are also both expected to achieve net profits exceeding 10 billion yuan for the same period.
Key Drivers of Earnings Growth
Several mid-sized brokerages are demonstrating strong earnings momentum. Tianfeng Securities (601162.SH) expects its first-half attributable net profit to be between 164 million yuan and 246 million yuan, representing a massive year-on-year increase of 429.03% to 693.55%.
In the first half of the year, despite market fluctuations, major A-share indices trended upward, providing solid performance support for the brokerage industry. Regarding the earnings growth, some brokerages attributed it to a stable and improving capital market, with year-on-year increases in revenues across multiple business lines including investment banking and wealth management.
Detailed Performance Breakdown
The performance disclosures began with Guotai Haitong on July 3rd, followed by several others, including CITIC Securities, on the evening of July 10th. All nine firms that have released forecasts are reporting positive results, with industry leaders continuing to excel.
CITIC Securities and Guotai Haitong both expect first-half net profits to exceed 20 billion yuan. China Merchants Securities also expects to join the 10-billion-yuan club, forecasting an attributable net profit between 10 billion yuan and 11 billion yuan, an increase of 93% to 112%. Another leading firm, CICC, expects its attributable net profit to be between 7.708 billion yuan and 8.227 billion yuan, up 78% to 90%.
Other firms that have released forecasts include Changjiang Securities (000783.SZ), Caitong Securities (601108.SH), Zhongtai Securities, Caitong Securities, and Tianfeng Securities. In terms of growth rates, some mid-sized brokerages stand out. Besides Tianfeng Securities' substantial increase, Zhongtai Securities reported a year-on-year growth of 146.31%. Based on the lower end of their forecast ranges, China Merchants Securities, Caitong Securities, and Changjiang Securities all expect growth of 80% or more.
Core Business Performance
The primary drivers of the strong performance were proprietary trading and brokerage services. Major A-share indices rose in the first half, with the Shenzhen Component Index up 19.82% and the ChiNext Index up 35.38% by the end of June.
Several brokerages mentioned in their forecasts that businesses such as proprietary trading and brokerage performed well during the reporting period. For instance, Caitong Securities noted significant year-on-year growth in wealth management, institutional business, and securities investment income. Tianfeng Securities cited increased commission income from brokerage services and investment gains from proprietary trading compared to the same period last year.
Outlook for the Sector
Following a strong first-quarter report, the positive trend appears to be continuing into the interim period. Some brokerages saw their second-quarter profits surge compared to the first quarter. Guotai Haitong disclosed that its estimated second-quarter attributable net profit represents an increase of 113% to 121% over the first quarter.
Furthermore, some firms' interim results are expected to reach historical highs for the period. CICC's forecast would represent its best interim performance since its A-share listing in 2020.
While only about 20% of the 42 listed brokerages have released forecasts, analysts anticipate overall positive interim results for the sector. One analyst predicts that the 42 listed brokerages will achieve a combined attributable net profit of 142.5 billion yuan for the first half, a 50% year-on-year increase, with the second quarter alone showing 58% year-on-year growth.
The analysis suggests that brokerage business was the main growth driver in the first half, followed by proprietary trading, with asset management and investment banking net revenues also expected to increase year-on-year.
Market Implications and Analysis
Despite the strong earnings reports, the brokerage sector's stock performance has not shown a significant positive reaction recently, with the sector concept index falling over 3% last week. Some analysts view this as a sign of insufficient market confidence in the sustainability of brokerages' earnings growth or a misunderstanding of the primary drivers.
Analysts point out that the market may be overly attributing performance gains to the general market rise, particularly in technology stocks. In reality, other factors like high-net-worth client inflows and strong international business growth are also significant contributors beyond investments related to technology listings.
Looking ahead, the strong interim forecasts are seen by some as potentially catalyzing opportunities within the sector. It is suggested that the current low valuations do not yet reflect the improvement driven by earnings growth, making some leading brokerages with low valuations attractive investment prospects.
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