Policy direction since 2019 has increasingly favored consolidation within the securities industry and the development of premier investment banks. On one front, mergers and capital policies have channeled industry resources toward the leading players; on the other, smaller brokers are being guided toward differentiated strategies to create a multi-tiered industry structure.

The China Securities Association recently released the sector's first-half performance data. Industry-wide revenue reached 329.81 billion yuan, with CITIC Securities and Guotai Junan International (likely referring to Guotai Haitong) combined accounting for 29.38%. Total net profit hit 138.64 billion yuan, with these two firms representing 32.4%. Meanwhile, integration efforts involving CITIC China Securities (CICC) with Cinda Securities and Dongxing Securities are underway, potentially paving the way for even larger securities giants to emerge and capture greater market share.

"The regulatory push for industry consolidation and top-tier investment bank development has become more pronounced since 2019, combining merger-driven capital policies to consolidate resources among leaders while guiding smaller players toward differentiated growth," noted Sun Ting, non-banking financial analyst at Soochow Securities.

Industry-wide revenue reaches 329.81 billion yuan

The China Securities Association recently compiled operating data for securities firms for the first half of 2026. Unaudited financial reports from 150 brokerages showed combined revenue of 329.81 billion yuan. Major income streams included 104.14 billion yuan from agency securities trading (including trading unit seat rentals), 16.13 billion yuan from underwriting and sponsorship, 2.39 billion yuan from financial advisory services, 5.1 billion yuan from investment consulting, 12.14 billion yuan from asset management, 40.51 billion yuan from net interest income, and 113.1 billion yuan from securities investment income (including fair value changes). Net profit for the period totaled 138.66 billion yuan.

As of June 30, 2026, the 150 firms held combined total assets of 17.23 trillion yuan, net assets of 3.48 trillion yuan, net capital of 2.59 trillion yuan, client trading settlement funds (including margin trading funds) of 4.45 trillion yuan, and entrusted assets under management of 10.23 trillion yuan.

CITIC and Guotai Haitong dominate market share

In the first half, CITIC Securities generated 49.7 billion yuan in revenue, while Guotai Haitong posted 47.2 billion yuan. Their combined 96.9 billion yuan represented 29.38% of the sector's total 329.81 billion yuan. The top 10 revenue-generating firms accumulated 248.1 billion yuan, or 75.23% of the industry total.

Profit distribution followed a similar pattern. CITIC Securities earned 23.9 billion yuan in net profit, and Guotai Haitong achieved 21 billion yuan, together contributing 44.9 billion yuan—32.4% of the sector's 138.66 billion yuan total. The top 10 firms by profit posted a combined 115.6 billion yuan, representing 83.37% of the industry.

Asset scale tells the same story. CITIC Securities holds 2.47 trillion yuan in total assets, while Guotai Haitong has 2.5 trillion yuan, a combined 4.97 trillion yuan—29% of the industry's 17.23 trillion yuan. The top 10 firms by assets account for 12.74 trillion yuan, or 74% of the sector.

Smaller brokers still facing declines or losses

Divergence within the industry is intensifying. While leaders like CITIC Securities and Guotai Haitong post strong growth and expanding market share, some mid-to-small brokers continue to suffer declining performance or outright losses.

Lin Securities (Hualin Securities) reported net profit of 258 million yuan, down 23.32% year-on-year. The sharp drop is blamed on its proprietary trading business, which generated just 92.02 million yuan in revenue—a 58.24% plunge from 220 million yuan a year earlier. Operating margin collapsed from 63.65% to -12.4%, resulting in a direct operating loss of 11.4 million yuan. The company attributed the decline to "the volatile A-share market conditions during the period, which led to lower fair value gains on equity investments."

Hongta Securities saw first-half revenue fall 14.00% to 1.02 billion yuan, with net profit attributable to shareholders dropping 23.93% to 510 million yuan. The semi-annual report shows fair value gains decreased by 480 million yuan year-on-year.

Other mid-tier firms like Great Wall Securities, Guosheng Securities, and Cinda Securities achieved positive but underwhelming growth—net profit increases of 0.81%, 3%, and 9.4%, respectively, well below the industry average. In 2025, a strong year for the sector, 17 brokers still recorded losses. For the first half of this year, non-listed brokers' results remain undisclosed, though losses likely persist among them.

Way forward for smaller brokers

Sun Ting of Soochow Securities argues that consolidation toward stable concentration is an inevitable long-term trend, drawing parallels with mature markets. After Japan's 2008 financial crisis and subsequent foreign capital retreat, the top five domestic comprehensive brokers solidified an oligopoly, capturing 45% of revenue and 51% of net profit by 2024. In the United States, the independent investment banking model ended post-2008 as firms were acquired or converted to bank holding companies. Today's industry features clear segmentation: comprehensive investment banks dominate large-scale financing and cross-border M&A; boutique banks focus on advisory; discount brokers specialize in retail wealth management; and specialized institutions and market makers target niche segments.

Looking ahead, China's securities industry is likely to see both concentration and differentiation advance in parallel. Ongoing M&A continues to aggregate resources toward quality players, while the widening profitability gap between top and bottom firms accelerates market cleansing. Drawing from mature market experience, Sun expects a three-tier stable structure to emerge: leading brokers leveraging strong capital for heavy-asset and cross-border businesses as integrated "aircraft carriers"; regional mid-sized firms pursuing boutique strategies rooted in local expertise; and weaker tail-end brokers facing acquisition or contraction to basic channel services.

Bo Xiaoxu, non-banking financial analyst at China Aviation Securities, notes broad industry consensus: as 2026 marks the opening year of the "15th Five-Year Plan," smaller brokers must abandon the "big and complete" extensive growth model entirely. Instead, they should embrace a "specialized and refined, small but beautiful" orientation, focusing on regional depth, niche concentration, business synergy, and technology enablement while maintaining robust risk control and compliance—building core competitiveness through differentiation to achieve high-quality breakout amid pressure from leaders and industry reshuffling.

With regulators clarifying the "risk prevention, strengthened supervision, and high-quality development" agenda and guiding firms to serve new productive forces and technological innovation, differentiated positioning has become a collective choice for smaller brokers. Bo outlines three core principles: first, leverage unique resource endowments rather than blindly following leaders into crowded tracks; second, anchor on serving the real economy by aligning with regional development and industrial upgrading needs; third, uphold risk control and compliance as the bottom line, preserving safety boundaries while innovating.

Overall, with regulators clearly encouraging industry integration and policies promoting high-quality development, M&A and restructuring represent an effective path for brokers seeking external growth.