As April arrives, securities firms have submitted their 2025 performance reports. These financial statements not only capture the landscape of the securities industry at the end of 2025 but also serve as a summary of the past five years. According to SAC data, the entire industry's 150 securities companies achieved operating revenue of 541.171 billion yuan in 2025, a 20.67% increase from 2020, and a net profit of 219.439 billion yuan, a 39.30% increase from 2020, indicating substantial overall gains for the sector.
However, a closer look at individual firms reveals a mixed picture. As of April 3, 25 securities firms have released their annual reports. Ranking by the change in net profit market share over the past five years, the top three performers are Guotai Haitong (reflecting merger factors), CITIC Securities, and Founder Securities. The bottom three are Industrial Securities, China International Capital Corporation (CICC), and China Securities.
When considering Haitong Securities' pre-merger market share, its net profits from 2021 to 2023 were 13.748 billion yuan, 5.196 billion yuan, and -311 million yuan, corresponding to market shares of 7.19%, 3.65%, and -0.23% respectively. The combined market share with Guotai Junan for those years was 15.20%, 11.82%, and 6.95%. Compared to Guotai Haitong's 2025 market share of 13.29%, the merger has indeed revitalized the Haitong assets. However, over the five-year period, the combined market share declined by 1.91 percentage points due to prior operational issues at Haitong Securities, representing a significant loss.
From 2022 to 2023, Haitong Securities' performance deteriorated sharply, primarily affected by its subsidiary, Haitong International. The troubles at Haitong International stemmed largely from exposure to Chinese real estate US dollar bonds. In 2022, Haitong International's investment segment, including bond investments, recorded a loss of -5.097 billion Hong Kong dollars. This contributed to a massive net loss of -6.541 billion HKD for Haitong International that year. In 2023, Haitong Securities attempted self-rescue by participating in bond issuances and subscribing to new shares to finance Haitong International, but the operational difficulties persisted, leading to another substantial loss of 8.156 billion HKD.
Now, the merger between Guotai Junan and Haitong Securities is complete, and the combined entity, Guotai Haitong, has released its first annual report. As of the reporting period end, Guotai Haitong's total assets reached 2.11 trillion yuan, with net assets attributable to the parent company at 330.417 billion yuan, surpassing CITIC Securities in asset size and establishing a "two giants and many strong players" landscape in the securities industry.
It is noteworthy that the drag from Haitong International on the financial statements persists. According to Guotai Haitong's annual report, Haitong International Holdings reported a net loss of 3.268 billion HKD in 2025. Although this represents a reduction of nearly 60% compared to the 2023 loss, its impact on the statements remains significant. Calculated at an exchange rate of 0.87, this loss equates to approximately 2.843 billion yuan, accounting for about one-tenth of Guotai Haitong's current profit. Furthermore, Haitong International's net assets at period-end were negative 15.532 billion HKD, or approximately negative 13.513 billion yuan, representing about 4% of the period-end net assets.
Consequently, several key profitability metrics for Guotai Haitong have declined, with its profit performance lagging behind CITIC Securities. The annual report shows that Guotai Haitong's net profit attributable to the parent company in 2025 grew 113.52% year-on-year to 27.809 billion yuan. However, this high growth was primarily benefited from 8.827 billion yuan in "negative goodwill." Because the merger consideration for Haitong Securities was lower than the target's net asset value, Guotai Haitong directly recognized this amount as negative goodwill and included it in non-operating income.
After excluding this non-recurring item, Guotai Haitong's adjusted net profit attributable to the parent company was 21.388 billion yuan, a year-on-year increase of 71.93%, representing a slowdown of about 42 percentage points. The corresponding adjusted net profit margin was 33.89%, notably lower than CITIC Securities' 40.48% for the same period.
From an ROE perspective, Guotai Haitong's adjusted weighted average return on equity decreased by 0.26 percentage points year-on-year to 7.49% in 2025, indicating a reduced ability to generate profits per unit of assets post-merger. In contrast, CITIC Securities' adjusted weighted average ROE increased by 2.64 percentage points to 10.67%, outperforming in both value and trend.
Furthermore, Guotai Haitong's ROE level ranked 11th among the 25 listed securities firms that had disclosed their annual reports, on par with Capital Securities and Founder Securities. Among the top 10 listed securities firms by 2025 revenue, Guotai Haitong's ROE ranked 9th, only higher than Orient Securities, and trailed the 8th-ranked Shenwan Hongyuan (8.70%) by more than one percentage point.
Undeniably, the merged Guotai Haitong has significantly strengthened. Its brokerage and credit businesses directly jumped to first place in the industry, and its investment banking business also advanced, with 2025 investment banking revenue, A-shone equity underwriting deal count, and total underwriting value all ranking within the top two. However, as Guotai Haitong and CITIC Securities compete for the top spot in the industry, the historical burden of real estate US dollar bonds carried by the former could become a subtle factor influencing the outcome, potentially affecting the final result in the crucial last stretch.
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