The highly anticipated merger between Xiangcai Securities and Shanghai Dzh Limited is advancing steadily. Both companies recently released their Q3 2025 financial reports, with Xiangcai posting a net profit of 442 million yuan for the first three quarters, a surge of over 200% year-on-year, while Shanghai Dzh Limited also reported a significant reduction in losses. Notably, other leading internet brokerages in the A-share market, such as East Money Information and Compass, have also disclosed their Q3 results. If Xiangcai and Shanghai Dzh Limited’s current revenue and net profit are combined, the merged entity would surpass Compass to become the second-largest player in the internet brokerage sector.
**Earnings Highlights: Xiangcai’s Profit Soars, Shanghai Dzh Limited Cuts Losses** Xiangcai Securities reported Q3 revenue of 655 million yuan, up 43.77% year-on-year, with net profit attributable to shareholders reaching 300 million yuan, a 315.25% increase. For the first nine months, cumulative revenue stood at 1.799 billion yuan (+16.15% YoY), while net profit hit 442 million yuan (+203.39% YoY), exceeding last year’s full-year performance. The strong growth was attributed to Xiangcai Securities’ core subsidiary, which optimized asset allocation and boosted wealth management and proprietary trading, achieving a net profit of 487 million yuan (+66.71% YoY). Additionally, improved performance from Shanghai Dzh Limited and gains from convertible bonds contributed to the profit surge.
Meanwhile, Shanghai Dzh Limited narrowed its net loss to 29.56 million yuan in the first three quarters, an 85.3% improvement YoY, with revenue rising 8.78% to 564 million yuan. The company cited cost-cutting measures and partial revenue growth but noted that income still fell short of covering expenses.
**Merger Progress: Regulatory Review Underway** Beyond earnings, market focus remains on the merger’s progress. Since announcing the plan on March 29, 2025, Xiangcai has secured approval from its interim shareholders’ meeting and received acceptance notices from the Shanghai Stock Exchange on October 23, marking the start of regulatory review.
The merger will see Xiangcai issue shares to Shanghai Dzh Limited’s shareholders in exchange for their stakes, after which Shanghai Dzh Limited will delist and dissolve. Post-merger, Shanghai Dzh Limited’s founder, Zhang Changhong, will hold 17.32% of the new entity, while Xiangcai’s controlling shareholder, Huang Wei, will see his stake diluted to 22.45% but retain control.
To support integration, Xiangcai plans an 8-billion-yuan financing round targeting AI-driven securities digitization, big data infrastructure, wealth management upgrades, and debt repayment.
**Industry Landscape: Opportunities and Challenges** The merger mirrors successful precedents like Compass’s acquisition of Maigaosec and East Money’s takeover of Tongxin Securities, validating the “fintech platform + brokerage license” model. East Money remains the undisputed leader with Q3 revenue of 11.589 billion yuan and net profit of 9.097 billion yuan, while Compass posted 1.402 billion yuan in revenue and turned a profit of 116 million yuan. The combined Xiangcai-Shanghai Dzh Limited entity would rank second in scale.
Zhou Lefeng, President of Xiangcai Securities, emphasized that mid-sized brokers must balance specialization, technology, and capital to compete with industry giants. He highlighted the potential of their merged “AI-powered brokerage” model, leveraging licenses, products, data, and tech synergies.
However, Xiangcai cautioned that the deal remains subject to regulatory approvals, with no certainty on timing or outcome.
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