During the first half of 2026, trading volume in the A-share market hit a historic high, while the bond market exhibited a volatile yet upward slow bull trend. Based on data from parent companies within the industry, the securities sector's operating revenue grew by 32% year-on-year, with net profit rising by 23%. Listed brokerages outperformed the sector overall. In H1 2026, 44 A-share pure-securities brokerages collectively achieved operating revenue of 375.215 billion yuan, up 44.39% year-on-year, and aggregate net profit attributable to shareholders of 163.434 billion yuan, an increase of 48.86%. Among these 44 firms, CITIC Securities topped both revenue and net profit charts, while Pacific Securities recorded the lowest figures in both metrics. China Merchants Securities posted the fastest revenue growth at 108.19%, whereas Hongta Securities saw the steepest revenue decline of 14%. Tianfeng Securities led net profit growth with a 549.03% surge, while Hongta Securities experienced the largest net profit drop of 23.93%. Among the 44, only Great Wall Securities and Hongta Securities reported negative revenue growth, with solely Hongta Securities and Hualin Securities witnessing declines in net profit.

CGS Experiences a Major 35% Drop in Asset Management Net Revenue

Focusing on asset management operations, the 44 listed brokerages generated a combined fee-based net revenue of 27.681 billion yuan in H1 2026, a 30.12% year-on-year increase, constituting 7.38% of total revenue during the period. CITIC Securities led with the highest asset management net revenue of 7.182 billion yuan, while Central China Securities had the lowest at just 560,000 yuan. Among the 44, Industrial Securities posted the largest gain in asset management net revenue, soaring 1645.26%, whereas Central China Securities again suffered the steepest decline of 96%. In terms of proportion, First Capital Securities recorded the highest share of asset management fee revenue at 23.34%, while Central China Securities had the lowest at merely 0.04%. Clearly, Central China Securities registered the weakest asset management fee net revenue, growth rate, and revenue proportion during H1 2026 among all 44 listed brokerages. Apart from Central China Securities, CGS saw the second-largest drop in asset management fee net revenue, decreasing by 35.46%.

During H1 2026, CGS's asset management fee net revenue stood at 173 million yuan, plummeting 35.46% year-on-year. Specifically, in the second quarter alone, asset management fee net revenue was merely 58 million yuan, a 58% reduction compared to the same period last year. CGS did not disclose the reasons behind this substantial decline in its semi-annual report. However, based on footnotes within the report, the sharp fall in collective asset management business net revenue was the primary driver. In H1 2025, collective asset management fee net revenue was 242 million yuan, which dropped to 156 million yuan during H1 2026, marking a 35.54% decrease. Looking at its subsidiaries, Galaxy Jin Hui achieved operating revenue of 171 million yuan in H1, down 32.68% year-on-year, whereas Galaxy Innovation Capital posted 48 million yuan in operating revenue, up 65.52%.

By the end of H1 2026, CGS's maximum risk exposure corresponding to off-balance-sheet structured entities escalated to 90.5 billion yuan, compared to 71.4 billion yuan at the end of 2025.

Revenue and Net Profit Lag Industry, Competitive Ranking Slips Out of Top Five

In H1 2026, CGS achieved operating revenue of 16.85 billion yuan, up 22.58% year-on-year, and net profit attributable to shareholders of 7.797 billion yuan, growing 20.18%. Despite both metrics increasing, CGS's performance still trailed the industry average. According to data from the Securities Association of China, the sector's operating revenue grew by 32% and net profit by 23% year-on-year based on parent company figures. CGS's overall performance ranking also declined. In revenue, it slipped from the 5th position in H1 2025 to 7th in H1 2026, and in net profit, it fell from 4th to 8th during the same period. Several factors contributed to this ranking drop, including an underwhelming investment banking business with negative profits, a shrinking asset management segment with limited income, and a counter-cyclical plunge in proprietary investment income. Against the backdrop of robust growth across numerous leading brokerages, CGS's structural business issues became more pronounced even during favorable market conditions.

Investment Banking Segment Posts Negative Profit, Investment Trading Revenue Declines Against Trend

During H1 2026, CGS's investment banking revenue reached 256 million yuan, rising 4.44% year-on-year, yet accounting for only 1.52% of total revenue. Not only was the revenue share minimal, but the investment banking division also generated a negative profit, with a gross margin of approximately -67 million yuan. Meanwhile, the company's investment business bucked the trend by declining amid a heated market, severely underperforming the industry. Investment trading revenue stood at 2.873 billion yuan, down 25.53% year-on-year.

H1 2026 witnessed structural market conditions in the A-share market, with major indices showing divergent movements. The STAR 50 Index led with a 64.25% gain, while the BSE 50 Index fell 13.14%. The Shanghai Composite Index edged up 3.16%, the Shenzhen Component Index rose 19.82%, and the ChiNext Index climbed 35.58%. Trading activity was exceptionally robust, as A-share total turnover reached 317.56 trillion yuan in H1, dwarfing the 162.68 trillion yuan from the same period in 2025 and setting a new semi-annual record. In the bond market, interest rate benchmarks shifted lower, with a steepening yield curve. Supported by ample liquidity and slightly constricted bond supply, the market unfolded in a volatile, upward slow bull trend. Based on industry data, brokerages' cumulative proprietary investment income grew 12% year-on-year in H1, with Q2 parent-company proprietary income surging 88%. According to a research report by Founder Securities titled "CGS (601881) 1H26 Results Review: Brokerage and Credit Businesses Drive Growth," these segments were the primary growth contributors. The estimated annualized investment return rate stood at 3.63% for H1 2026, down 0.08 percentage points year-on-year.

In summary, CGS's business structure exhibits a certain reliance on market conditions. In H1, brokerage fee net revenue climbed to 5.592 billion yuan, up 53.34% year-on-year, heavily dependent on the surge in market trading volume. With average daily A-share turnover rising 96.9% year-on-year in H1, sustained high growth in brokerage revenue could prove challenging should market conditions cool down. While the investment trading segment depends heavily on market performance, CGS failed to capitalize on the upswing during H1. Meanwhile, the more distinctive businesses capable of weathering market cycles—investment banking (256 million yuan, 1.52% share) and asset management net revenue (173 million yuan, 1% share)—collectively accounted for less than 3% of total revenue. This configuration underscores that CGS's performance remains closely tied to capital market cycles, leaving its capacity to smooth volatility still in question.