Listed Chinese national asset management companies may continue to experience volatile earnings in 2026, following the disclosure of operating profit pressures in 2025. Persistent asset quality challenges, slowing economic growth, and weakness in the property sector are likely to weigh on the profitability of listed asset managers. Nevertheless, Fitch Ratings expects these companies to remain key policy implementers over the medium term, supported by their business transformation, broader risk-resolution and relief measures, and closer integration with controlling shareholders following recent ownership changes. As the proportion of assets linked to the market value of acquired distressed assets and the performance of joint ventures on the balance sheets of listed asset managers rises, their earnings may remain volatile. Fitch estimates that such exposures increased to 57% of consolidated assets by the end of 2025, up from 34% in 2021. Despite this, gains from strategic equity investments supported the profitability of listed asset managers in 2025 and aided the continued accumulation of capital. Asset management companies also accelerated business activities in 2025, particularly in the acquisition and disposal of non-performing assets, financial institution risk mitigation, and property sector risk resolution. This reinforced their role in supporting financial system stability. It is estimated that newly acquired distressed assets by listed asset managers grew by approximately 22% in 2025. Stronger oversight and business synergies from state-owned controlling shareholders should further support the independent profiles and policy implementation capabilities of asset managers. In addition, shareholder support continues to bolster their funding and liquidity positions, enabling access to bank borrowing at lower financing costs amid China’s low-interest-rate environment. Total bank borrowings increased by 13% in 2025, accounting for 61% of total funding, compared with 49% in 2021. In 2025, China Cinda Asset Management Co., Ltd. (A-/Stable) continued to face profitability pressure in its core distressed asset management business. Its consolidated net profit fell to RMB293 million from RMB3.5 billion in 2024, mainly due to losses at its 54.5%-owned property subsidiary, although net profit attributable to shareholders rose by 17% to RMB3.6 billion. Revenue growth improved in the second half of 2025, while the core tier 1 capital adequacy ratio on a parent-company basis remained stable at 9.7%. Business activity also increased, with newly acquired distressed credit assets rising by 7% and newly deployed other distressed assets growing by 28%. China CITIC Financial Asset Management Co., Ltd. (BBB/Stable) reported continued earnings recovery and balance sheet growth in 2025. Total assets increased by 7% to RMB1.1 trillion, driven mainly by growth in equity investments, fair-value distressed assets, and investments in associates. Net profit rose by 29% to RMB9.5 billion, supported by lower impairment losses and interest expenses. Core business revenue improved, although total revenue declined due to reduced investment income from associates. The company continued to resolve legacy problem assets through recoveries and write-offs, with amortized-cost acquired restructured assets falling by 42% and impairment losses declining by approximately 51%.