GF Securities has issued a research report maintaining a "Buy" rating on CICC (03908.HK) H-shares, assigning a fair valuation of 0.9 times price-to-book (PB) ratio for 2026, with a fair value of HK$22.13 per H-share. The brokerage forecasts the company's net profit attributable to shareholders to reach RMB 15.1 billion and RMB 15.8 billion for 2026 and 2027, respectively.
CICC reported operating revenue of RMB 30.715 billion for the first three quarters of 2026, representing a year-on-year increase of 47.95%, while net profit attributable to shareholders reached RMB 13.245 billion, up 101.71% year-on-year. GF Securities noted that considering the potential synergies that may be unlocked following the merger, the company's expansion in client base, branch network, and business scale, as well as the subsequent integration results, are worth monitoring.
Steady Growth in First Three Quarters of 2026
CICC disclosed its third-quarter report for 2026. For the first three quarters, the company achieved operating revenue of RMB 30.715 billion, a year-on-year increase of 47.95%; net profit attributable to shareholders of RMB 13.245 billion, up 101.71% year-on-year; and non-recurring net profit attributable to shareholders of RMB 13.096 billion, up 101.93% year-on-year. The weighted average return on equity stood at 12.18%, an increase of 5.89 percentage points year-on-year.
On a quarterly basis, the third quarter of 2026 saw operating revenue of RMB 11.412 billion, up 43.87% year-on-year; net profit attributable to shareholders of RMB 5.046 billion, up 125.63% year-on-year; and non-recurring net profit attributable to shareholders of RMB 5.062 billion, up 125.69% year-on-year, maintaining a robust profit growth momentum.
Business Structure Advances Steadily
In the first three quarters of 2026, the company's net fee and commission income reached RMB 14.752 billion, of which net brokerage fee income was RMB 6.027 billion, net investment banking fee income was RMB 5.314 billion, and net asset management fee income was RMB 1.294 billion. On the investment banking front, the company acted as joint sponsor and lead underwriter to assist Changxin Technology in its listing on the STAR Market in July. Following its listing, Changxin Technology's share price rose, contributing paper gains from the co-investment shares. The dual-track returns from underwriting and co-investment have begun to materialize, reflecting the business value of the "three-in-one investment linkage" strategy.
Regarding net interest income, the company recorded RMB 435 million in the first three quarters, turning profitable from a loss of RMB 1.020 billion in the same period last year, primarily driven by increased interest income from other debt investments, margin financing and securities lending interest income, and interest income from deposits with financial institutions. On the investment business side, the company realized investment income of RMB 7.758 billion and fair value change gains of RMB 8.034 billion, mainly attributable to increased net gains from financial instruments measured at fair value. Overall, revenue growth was driven by both fee-based businesses and investment-related gains, reducing reliance on a single market condition.
Share Swap Merger with Dongxing Securities and Xinda Securities Advances, Strengthening Scale and Synergy Foundation
On October 27, the company completed the share swap merger with Dongxing Securities and Xinda Securities, issuing 3.104 billion new A-shares, increasing total share capital from 4.827 billion shares to 7.931 billion shares. Following the merger, the company has expanded its client base, branch network, and business scale, and the subsequent integration and synergy results are worth monitoring.
Risk Warnings
Economic downturn exceeding expectations; direct investment performance falling short of expectations; significant declines in the equity market, among other risks.
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