Recently, Huatai Securities Co., Ltd. (601688) held its 2026 third-quarter earnings briefing, with management represented by Chief Executive Officer Zhou Yi and Chief Financial Officer Jiao Xiaoning in attendance to answer investor questions.
Faced with a performance picture in which net profit for the first three quarters grew 18% overall but attributable net profit in the third quarter alone declined year on year, management gave candid responses on key issues including the implementation of its AI strategy, rising expense ratios and the performance of its capital-related businesses.
Overall, the pressure on Huatai Securities' single-quarter Q3 profit was mainly attributable to an equity market pullback that weighed on proprietary trading investment income, rather than any loss of momentum in its businesses. Over the same period, its light-capital businesses such as investment banking and asset management still maintained strong growth resilience.
Is AI investment linked to the high expense ratio?
Financial report data show that Huatai Securities' business and administrative expenses for the third quarter alone reached 4.81 billion yuan, with the expense ratio climbing to 59.5%, a marked increase from the second quarter, drawing investor attention.
In response, Chief Financial Officer Jiao Xiaoning explained at the meeting that the company's expenses include persistent rigid investments in technology research and development, basic operations and other areas. Because revenue in the single quarter saw a phased decline, the expense ratio fluctuated in its data presentation.
But looking at the first three quarters as a whole, the company's revenue profit margin still achieved year-on-year growth, Jiao Xiaoning disclosed. Huatai Securities will subsequently rely on AI technology to reshape its business processes and further deepen refined expense management and control, focusing on improving input-output efficiency while safeguarding investment in core capabilities.
What is the relationship between light-capital businesses and proprietary trading?
Although the drag from proprietary trading weighed on overall Q3 profit, Huatai Securities still delivered a solid report card in its light-capital business segments.
Data show that the company's investment banking revenue in the third quarter alone surged about 40% year on year, while asset management revenue also rose about 29.5% year on year, demonstrating extremely strong risk resistance and business resilience in a volatile market environment.
Chief Executive Officer Zhou Yi said Huatai Securities will firmly advance its "dual-wheel drive" strategy of wealth management and institutional services. In the future, the company will further enhance coordination among investment banking, asset management, research and institutional trading, and continuously strengthen the contribution of light-capital businesses to overall performance. At the same time, the company will adhere to the coordinated development of light-capital and heavy-capital businesses, thereby smoothing market volatility and improving the stability and counter-cyclical capacity of overall profitability.
Regarding the 940 million yuan net reversal of credit impairment losses in the third quarter that provided support to profit, Jiao Xiaoning clearly responded that credit impairment gains and losses are recurring items in a securities firm's regular business and should not simply be excluded as non-recurring gains and losses. She stressed that the company has made full provisions in strict accordance with accounting policies, and there is currently no potential credit impairment pressure.
Official announcement of new 'AI Zhangle' plan
At this earnings briefing, "AI" became a keyword frequently mentioned by Huatai Securities management. The financial large model "AI Zhangle," which had previously drawn market attention, also had its new strategic plan officially announced.
Zhou Yi pointed out that intelligence has become an important pillar of Huatai Securities' strategy. Building on being the first in the industry to launch the AI-native application "AI Zhangle," the company is driving its service model to transform from traditional "passive question-and-answer" toward an assistant-style intelligent terminal that "actively identifies client needs, intelligently matches services and provides continuous companionship."
In terms of empowering employees with AI, Huatai Securities will also simultaneously upgrade its internal tool "LiaoTA," aiming to restructure the daily workflow of investment advisers and create a new human-machine collaborative wealth management model, thereby achieving cost reduction and efficiency gains.
Responding to market value concerns, adhering to stable dividends
In response to recent capital market volatility and investor concerns about market value management, Huatai Securities management reiterated its philosophy and dividend strategy.
Management noted that since its A-share listing, the company has implemented 19 dividend distributions in total, with cumulative dividend payments of about 48.15 billion yuan. In October 2026, which has just passed, the company successfully completed an interim profit distribution of 1.625 billion yuan.
Looking ahead, Huatai Securities said it will maintain a stable dividend policy, continuously improve fundamental performance, strengthen communication with domestic and overseas investors and other means, and prudently evaluate other market value management tools, continuously conveying to the market the company's strategic resolve of "All in AI" and its long-term investment value.
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