Brokerage Sector Anticipates Strong First-Half Earnings, Valuations May Rebound

Stock News07-10

Recent data indicates a significant increase in trading activity within the A-share market during the first half of 2026. The average daily combined stock and fund turnover on the Shanghai and Shenzhen exchanges reached RMB 3.24 trillion, representing a year-on-year increase of 101.0%. In the second quarter specifically, this figure rose to RMB 3.35 trillion, up 125.45% year-on-year and 7.31% sequentially. Concurrently, new issuances of equity-oriented funds have rebounded, with the first half of 2026 seeing 492.3 billion new fund units created, an 88.33% increase from the same period last year.

Analysts project that brokerage commission income for the first half of 2026 will see a substantial rise, estimated at 74.85% year-on-year. A research report from CICC (ASX: 03908) forecasts that 42 listed securities companies collectively achieved a net profit attributable to shareholders of RMB 142.5 billion in the first half of the year, marking a 50% year-on-year growth.

The primary drivers behind this robust performance are the surge in A-share trading volume, a recovery in investment banking operations, and stronger proprietary trading results. As IPO activity picks up and the technology innovation sector gains momentum, the depth of expertise in technology-related services is becoming a core competitive advantage for brokerages.

Another major securities firm's analysis notes that the new draft regulations for follow-on offerings, which focus on serving the real economy, enhancing market inclusivity and adaptability, and preventing systemic risks, are advancing on dual fronts of deregulation and constraint. The introduction of a shelf-offering system, adjustments to the ceiling for small-scale rapid financing, and the establishment of a market-based pricing mechanism are expected to reduce financing costs and time for high-quality companies.

This revision represents the first systematic optimization of the follow-on offering rules since the full implementation of the registration-based IPO system in February 2023 and is anticipated to reinforce the ongoing recovery in securities firms' investment banking businesses. The analysis suggests focusing on high-quality mid-sized brokerages with strong industry resources and leading firms with robust investment banking capabilities.

The Hong Kong-listed Chinese brokerage sector includes related stocks such as Huatai Securities (06886), GF Securities (01776), CGS (ASX: 06881), Guotai Haitong (02611), CICC (03908), CITIC Securities (06030), CSC Financial (06066), Oriental Securities (03958), Everbright Securities (06178), Shenwan Hongyuan (06806), Zhongzhou Securities (01375), and Guolian Minsheng (01456).

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