The release of mid-year performance forecasts by listed brokerages provides a clear window into the sector's evolving profit model.
As July unfolds, listed securities firms have been actively disclosing their preliminary results for the first half of 2026. By July 10th, all ten firms that have reported have issued positive forecasts, confirming a broad-based industry recovery. China Securities Co., Ltd. and Guotai Haitong Securities both project net profits firmly above the 200 billion yuan mark, while China Merchants Securities Co., Ltd. has joined the 100-billion-yuan club. Smaller and mid-sized brokerages are showing remarkable earnings flexibility, with Tianfeng Securities Co., Ltd. forecasting a maximum year-on-year increase of nearly 700%.
Compared to the historical pattern of being heavily dependent on stock market performance, the current growth cycle for brokerages is being driven by a more diverse set of internal factors. Sustained high trading volume in the A-share market provides a solid foundation for brokerage commissions and margin lending. The expansion of IPO listings on the STAR Market under the registration-based system is generating dual revenue streams from underwriting and strategic investments. Furthermore, wealth management, over-the-counter derivatives, and institutional trading services are emerging as stable secondary growth engines, collectively helping the sector reduce its traditional "high-cyclical" characteristics.
Since mid-June, the brokerage sector has shown a distinct turnaround from its previous prolonged weakness, with clear signs of capital flowing back and market confidence being effectively restored. Non-bank financial analysts suggest that the sector's performance may evolve from a phase of catch-up gains to a pattern of stronger, oscillating recovery. Driven by increasing market attention, it is expected to gradually recoup its losses from earlier in the year.
Leading Firms Set the Pace in Profits, Intense Competition for Top Spot
The rankings of top-tier brokerages remain a key focus for the market. The competition for the number one position is still intense, but the leader appears to be largely decided.
China Securities Co., Ltd. leads the pack with an estimated net profit of 233.43 billion yuan, a year-on-year increase of 69.59%, setting a new historical record for the period. The company attributed this performance to seizing new opportunities and meeting challenges in the high-quality development of the capital markets, focusing on its goal of building a premier investment bank and investment institution, advancing its international strategy, maintaining a client-centric approach, strengthening technology-driven development, and enhancing its comprehensive financial service capabilities.
Guotai Haitong Securities follows closely, forecasting a net profit attributable to shareholders of between 200.03 billion and 205.11 billion yuan, representing growth of 27% to 30%. Notably, the company's adjusted net profit is projected to surge by 164% to 171%.
In the second tier, China Merchants Securities Co., Ltd. expects a net profit between 100 billion and 110 billion yuan, a year-on-year jump of 93% to 112%, marking one of the most impressive growth rates among the major players. The company is focused on its strategic goal of becoming a technology-driven, synergistically successful leading investment bank in China, guided by the "Five Key Areas" of finance, with deep and targeted efforts in technology finance, green finance, inclusive finance, pension finance, and digital finance.
Overall, most leading brokerages have noted "record highs for the period" in their forecasts, with growth rates far exceeding market expectations. With the capital market showing steady and positive momentum, top firms are leveraging their diversified and comprehensive business advantages to widen the gap with smaller competitors.
Growth Drivers Shift, Secondary Engines Emerge
Reviewing the reasons cited by the ten brokerages for their performance changes, phrases like "steady and positive capital market" and "sustained high market activity" are nearly universal. However, the growth engines are no longer reliant on a single market trend.
Brokerage and margin lending businesses remain the foundation. Several firms mentioned that sustained high A-share trading volume drove commission income, while expanding margin lending balances contributed stable interest income. Tianfeng Securities Co., Ltd. explicitly stated that increased commission income from brokerage services and investment gains from proprietary trading were the main reasons for its significant forecasted growth. Huaxin Co., Ltd. also noted year-on-year growth in brokerage, asset management, investment, and credit business revenues.
Underwriting and strategic investment businesses are providing incremental gains. With the deepening of registration-based reforms and the continued expansion of STAR Market IPOs, many brokerages are reaping excess returns from both underwriting fees and strategic investments. China International Capital Corporation Limited highlighted the synergistic efforts of its six core business pillars, including investment banking, equity business, and wealth management. Guotai Haitong Securities emphasized building a full-chain advantage in serving new quality productive forces through "investment + investment banking + investment research," continuously improving its comprehensive financial service level.
Wealth management, proprietary investments, and institutional trading services have become stabilizers for brokerage income. Zheshang Securities Co., Ltd. stated that its proprietary investment, wealth management, private equity investment, and investment banking businesses saw significant year-on-year growth, with the distinctive advantages of its subsidiaries being continuously strengthened.
The "Five Key Areas" of finance have become a frequent strategic theme. China Securities Co., Ltd., Guotai Haitong Securities, China Merchants Securities Co., Ltd., Zheshang Securities Co., Ltd., Cinda Securities Co., Ltd., and Zhongtai Securities Co., Ltd. all mentioned in their forecasts a solid focus on these areas, indicating a shift from policy rhetoric to tangible business results.
Small and Mid-Sized Firms Showcase Impressive Growth Momentum
While large brokerages compete on scale, smaller and mid-sized firms are demonstrating their agility. Their growth rates in the 2026 interim forecasts are notably impressive.
Tianfeng Securities Co., Ltd. stands out as the current growth leader among reporting firms, projecting a net profit between 1.64 billion and 2.46 billion yuan, a year-on-year surge of 429.03% to 693.55%. Although the absolute size is modest, the near-sevenfold maximum increase highlights high sensitivity from a low base, where marginal improvements in brokerage commissions and proprietary income have a particularly pronounced effect on earnings.
Several other small and mid-sized brokerages also reported strong growth: Zhongtai Securities Co., Ltd. expects a net profit of 17.52 billion yuan, up 146.31%; Cinda Securities Co., Ltd. forecasts between 7.12 billion and 8.09 billion yuan, an increase of 90% to 116%; Changjiang Securities Co., Ltd. projects between 31.26 billion and 33 billion yuan, up 80% to 90%; Zheshang Securities Co., Ltd. anticipates between 18.4 billion and 19.5 billion yuan, growing 70% to 80% and achieving a record high for the period. Huaxin Co., Ltd. expects a net profit of approximately 4.02 billion yuan, a 79.46% increase, with its subsidiary Huaxin Securities Co., Ltd. adhering to a core strategy of fintech-driven business development.
It is important to view this high growth objectively, as it is partly supported by a low base effect from the same period last year for some firms, which were near breakeven. As this base effect diminishes, growth rates may moderate in the second half. However, the fact that many of these brokerages emphasized "record highs for the period" or "significant improvement" suggests the growth is not solely due to cyclical rebound but also reflects genuine business enhancement.
Recovery Expected to Continue Amid Increasing Divergence
Looking ahead to the second half of the year, the brokerage sector's recovery momentum is expected to persist, but the driving factors and individual stock performance are likely to become more differentiated.
From a macroeconomic perspective, the stable and positive trend in the capital market is expected to be reinforced during the first year of the 15th Five-Year Plan. China Merchants Securities Co., Ltd. noted in its forecast that the Chinese economy operated steadily overall in the first half of 2026, demonstrating strong resilience. On the policy front, the ongoing deepening of capital market reforms, with coordinated efforts on the investment, financing, and trading sides, provides sustained support for brokerage businesses.
From a business standpoint, several key variables warrant attention in the latter half: first, whether A-share trading volume and margin lending balances can remain at elevated levels, which directly determines the ceiling for brokerage and credit business income; second, the pace of IPOs and the activity of mergers and acquisitions, which affect the flexibility of investment banking revenue; and third, the sustainability of proprietary investment returns in an environment of potentially increased market volatility.
Regarding industry structure, consolidation may accelerate. The integration synergies from the merger forming Guotai Haitong Securities are being realized faster, setting an example for the industry. Guided by the objective of building first-class investment banks with international competitiveness and market leadership, top firms may further expand through mergers and acquisitions, potentially increasing industry concentration.
Analysts believe that for investors, the investment logic for the brokerage sector is shifting from "trading beta" to "seeking alpha." On one hand, the overall industry recovery offers room for valuation repair across the board. On the other hand, as individual stock divergence intensifies, brokerages with first-mover advantages in areas like wealth management, institutional services, and international expansion are likely to command sustained valuation premiums.
One leading non-bank financial analyst suggests the sector has potential catalysts across multiple business lines such as technology innovation, wealth management, and internationalization, which could lead to both earnings and valuation increases in the second half. Considering the current market environment and industry trends, two main investment themes are recommended: first, leading institutions with relatively low valuations that benefit from an optimizing competitive landscape and possess strong comprehensive capabilities; and second, specialized brokerages with attractive valuations and a clear logic for improving return on equity.
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