To The Moon

Driven by the release of interim results, the brokerage sector showed notable activity on August 26th, with Jinlong Co and Xiangcai Securities hitting their daily trading limits, while Changjiang Securities, China Merchants Securities, and Guoyuan Securities were among the top gainers. According to Wind data, as of the close of trading on August 26th, a total of 26 listed brokerages or their parent companies had disclosed their 2026 interim results, painting a picture of robust overall performance across the industry.

Leading firms continue to solidify their market dominance. CITIC Securities reported first-half net profits exceeding 23 billion yuan, while Guotai Haitong surpassed the 20 billion yuan mark. Notably, mid-sized and smaller brokerages have demonstrated greater earnings elasticity, with Zhongtai Securities, Cinda Securities, and Huaan Securities all recording year-on-year net profit growth rates exceeding 100%. Core business segments such as brokerage and proprietary trading have emerged as the primary engines for this growth.

Industry analysts attribute the strong performance to vibrant trading activity in the A-share market during the first half of the year, which has extended the sector's high prosperity cycle. They suggest that investors should pay attention to the investment opportunities within the brokerage sector, supported by these encouraging earnings results.

Performance Highlights

Data from the 26 listed brokerages reveals that the securities industry experienced broad-based profit growth in the first half of 2026. The largest players have only strengthened their positions. CITIC Securities achieved operating revenue of 49.692 billion yuan, approaching the 50 billion yuan threshold, marking a 50% year-on-year increase. Its net profit reached 23.343 billion yuan, up 69.6%, securing the top spot in the industry for both metrics. Guotai Haitong reported operating revenue of 47.163 billion yuan, a substantial 97.56% jump, with net profit climbing 28.74% to 20.26 billion yuan.

Other major players also delivered impressive numbers. China Merchants Securities saw its net profit surge by 104.87% to 10.624 billion yuan. East Money Securities recorded a 44.85% increase in net profit, reaching 8.064 billion yuan, while CSC Financial reported a 69.44% rise, with net profits hitting 7.639 billion yuan.

The smaller players, while generating lower absolute profits, have shown greater growth flexibility. Zhongtai Securities led the pack with a 146.38% surge in net profit, followed by Cinda Securities with a 104.59% increase and Huaan Securities with a 102.55% jump. Huaxi Securities and Changjiang Securities both saw net profits grow by over 80%, while Northeast Securities reported a year-on-year increase exceeding 70%. Industrial Securities and Zhongyuan Securities each recorded growth of more than 60%.

Several brokerages have cited the robust performance of their wealth management and proprietary trading operations, which have benefited from the active capital markets. Guotai Haitong stated that its wealth management business has been driven by a dual focus on asset allocation and trading services, leading to outstanding investment returns and a significant expansion in client demand-driven business. Changjiang Securities noted that its wealth management arm has deepened its system and mechanism reforms, implementing an AUM management and evaluation system that improved client acquisition efficiency and pushed asset and security values to record highs.

Attractive Valuations

In terms of market performance, the non-bank financial sector of the Shenwan primary industry index closed up 2.47% on August 26th. Industry insiders believe that brokerage valuations are currently at relatively low levels. Combined with the stellar first-half earnings, the investment appeal of the sector is becoming increasingly apparent.

Bo Xiaoxu, Chief Non-Bank Financial Analyst at AVIC Securities, pointed out that the disclosed semi-annual reports show overall positive year-on-year growth in both revenue and net profit for listed brokerages. However, the data also highlights a growing divergence within the industry, with differences in business layout widening the profit gap between leading firms and smaller institutions. Top-tier brokerages, leveraging their strong capital and comprehensive business chains, have achieved synergistic development across multiple segments, solidifying their position in the industry's first echelon. Meanwhile, some mid-sized brokerages have secured higher profit growth rates through their focus on asset management, wealth management, and specialized trading businesses.

Bo attributes the improved operational results to several factors: a rebound in market trading activity that has aided the recovery of the brokerage business, proprietary investment operations that capitalized on structural market opportunities to enhance returns, the continued deepening of the wealth management transformation, and the steady expansion of integrated institutional services. Looking ahead, Sun Ting, Chief Non-Bank Financial Analyst at Soochow Securities, estimates that based on performance forecasts and profit projections for covered companies, listed brokerages will see first-half operating revenue grow by 57% year-on-year and net profit increase by 56%. She further projects a 93% year-on-year and 52% quarter-on-quarter surge in net profit for the second quarter alone. "We anticipate that the high growth in the first half is primarily driven by wealth management, investment banking, and technology innovation investments," Sun stated. "The performance of leading brokerages has clearly exceeded market expectations, while the results among smaller firms show more pronounced differentiation."