In the first half of 2026, A-share market turnover hit a record high while the bond market exhibited a slow bull trend with fluctuating strength. Data from parent companies across the industry shows that securities sector revenue grew 32% year-on-year, with net profit rising 23%. Listed brokers outperformed the broader industry, as 44 A-share pure securities firms collectively generated operating revenue of RMB 375.215 billion in H1 2026, up 44.39%, and aggregate net profit attributable to shareholders of RMB 163.434 billion, surging 48.86%.

Among the 44 brokers, CITIC Securities posted the highest revenue and net profit for the period, while Pacific Securities recorded the lowest figures. China Merchants Securities led revenue growth at 108.19%, whereas Hongta Securities suffered the sharpest revenue decline of 14%. Tianfeng Securities posted the fastest net profit growth at 549.03%, while Hongta Securities saw the largest net profit drop of 23.93%. Notably, only Great Wall Securities and Hongta Securities experienced negative revenue growth, and just Hongta Securities and Lin Securities recorded declining net profits.

Huaan Securities recorded the steepest decline in investment banking fee income, plunging as much as 75%. Specifically, the 44 listed brokers generated combined investment banking fee net income of RMB 19.482 billion in H1, up 25.19% year-on-year, representing 5.19% of total revenues. CITIC Securities led with investment banking net income of RMB 3.023 billion, followed by CICC at RMB 2.931 billion and Guotai Haitong at RMB 2.224 billion. Hongta Securities had the lowest figure at just RMB 5 million.

In terms of growth, East Money posted the fastest increase in investment banking net income, jumping 45-fold from a low base, though its absolute value remained modest at RMB 60 million. Huaan Securities saw the steepest decline at nearly 75%. Investment banking net income accounted for the highest proportion of total revenue at Tianfeng Securities, reaching 18.37%, while Hongta Securities had the lowest at just 0.50%.

What merits attention is Huaan Securities, which, despite beating Guoyuan Securities in overall performance during H1, saw its investment banking net income plummet 75%, the biggest drop among the 44 listed brokers. The company's investment banking fee net income stood at RMB 29 million, down 74.99% year-on-year, representing only 0.72% of total revenue—well below the 5% industry average. On a segment basis, investment banking revenue was RMB 31.49 million, down 71.7%, with an operating loss of RMB 6.65 million.

Huaan Securities did not disclose reasons for the decline in its interim report. According to public data, equity underwriting is likely the primary driver. Wind data shows that as of September 7, the company had zero A-share IPO pipeline projects (based on exchange acceptance, excluding terminated and issued projects). In fact, its equity pipeline—including IPOs, private placements, and rights issues—stood at zero. Since the Hengxin Life IPO project underwritten in March 2025, the company has gone 18 consecutive months without an IPO mandate or any other successful equity deal.

Investment banking revenue primarily derives from two sources: equity underwriting and bond underwriting. Equity underwriting represents the most valuable component, offering the highest fee rates, strongest brand impact, and greatest industry chain ripple effects. With zero equity reserves, the company faces no foreseeable equity underwriting income in the near term. In the registration-based IPO era, projects typically require 6–18 months from filing to issuance.

Can High-Growth Profitability Persist?

In H1 2026, Huaan Securities reported operating revenue of RMB 4.007 billion, up 65.28%, and net profit attributable to shareholders of RMB 2.097 billion, soaring 102.55%. Notably, over half of its net profit came from two investment subsidiaries. Huaan Jiaye generated revenue of RMB 777 million and net profit of RMB 571 million, while Huafu Ruixing posted revenue of RMB 734 million and net profit of RMB 534 million. Together, the two subsidiaries contributed RMB 1.105 billion in net profit, accounting for 52.69% of the total.

A research report by Sinolink Securities titled "Huaan Securities (600909): Sci-Tech Investment Driving High Profit Growth" attributes the record performance primarily to the valuation uplift of Changxin Technology in the primary market. Public data indicates that Huaan Securities, through its wholly-owned units Huaan Jiaye and Huafu Ruixing, established exposure to Changxin Technology via two channels: "Anhui Anhua Innovation Phase V Venture Capital Partnership" and "National Integrated Circuit Industry Investment Fund Phase II." According to Orient Securities research, if Changxin Technology completes its IPO, Huaan Securities' indirect stake would be approximately 0.393%. As of September 8, Changxin Technology's market value stood at RMB 3.96 trillion, implying a holding value of around RMB 15.5 billion for the broker. After deducting initial investment costs, unrealized gains likely exceed RMB 10 billion.

However, the question remains whether such explosive profit growth can continue beyond 2026. Sinolink Securities' forecasts offer a hint: it projects 2026 net profit of RMB 7.2 billion, dropping sharply to RMB 4.6 billion in 2027, a 36% decline. Once the Changxin Technology dividend is fully realized and markets normalize, can Huaan Securities uncover another dark horse?

Proprietary Trading Revenue Declines Against the Trend; Asset Management Scale Grows While Net Income Falls

H1 2026 featured structural market conditions, with major indices diverging. The STAR 50 Index led gains at 64.25%, while the Beijing Stock Exchange 50 fell 13.14%. The Shanghai Composite rose 3.16%, the Shenzhen Component gained 19.82%, and the ChiNext advanced 35.58%. Trading activity was intense, with total A-share turnover reaching RMB 317.56 trillion, far exceeding the RMB 162.68 trillion recorded in H1 2025 and setting a new semi-annual record. Meanwhile, bond yields shifted lower with a steeper yield curve, supported by ample liquidity and slightly contracted supply, sustaining a slow bull market.

According to industry data, broker proprietary trading income rose 12% year-on-year in H1, with Q2 parent-company proprietary trading revenue up 88%. Despite the optimistic equity and bond markets, Huaan Securities' proprietary trading income bucked the trend, falling 17.78% to RMB 629 million (excluding subsidiary investments), significantly underperforming the industry. Additionally, the company's asset management fee net income declined 12% to RMB 241 million, even though total assets under management expanded 16% from the start of the year to RMB 75.134 billion—highlighting the divergence between scale growth and income generation.