The first half of this year saw a vibrant trading environment in A-shares, with 43 listed brokers generally reporting improved overall performance. However, Chinalin Securities Co.,Ltd. posted only a 2% year-on-year increase in total revenue, while its net profit attributable to shareholders fell by more than 23%, drawing market attention for its counter-trend underperformance.
Breaking down the business segments, the brokerage business—its primary revenue driver—saw net income rise 39% year-on-year, a modest showing within the industry. Proprietary trading income, however, plunged 71% year-on-year. Although the investment banking business achieved substantial growth, its low base limited its ability to lift overall results. Meanwhile, the company's AI-driven brokerage transformation has become a focal point of market attention, with total operating expenses climbing to 563 million yuan in the first half due to increased technology research and development spending. Adding to the pressure, Chinalin Securities Co.,Ltd. received multiple regulatory penalties during the period. The company has yet to respond to inquiries regarding its future business expansion and compliance practices.
Proprietary Trading Slumps 70%
In the first half of this year, Chinalin Securities Co.,Ltd. reported total revenue of 849 million yuan, a slight increase of 1.67%, while net profit attributable to shareholders fell 23.32% to 258 million yuan. By segment, net income from brokerage, investment banking, and credit businesses reached 456 million yuan, 29 million yuan, and 232 million yuan respectively, growing 39%, 253%, and 20% year-on-year. Asset management and proprietary trading contributed 5 million yuan and 66 million yuan, down 24% and 71% respectively.
As the company's primary revenue pillar, brokerage net income grew 39%, benefiting from heightened market activity that revived existing client accounts, alongside continued digital transformation efforts that expanded online business and drove significant growth in wealth management revenue. Yet compared with peers, this growth rate remains unremarkable—27 listed brokers achieved brokerage net income growth exceeding 40% year-on-year. The sharp 70% decline in proprietary trading income during the first half emerged as the main drag on overall performance. The business structure shows pronounced imbalance, with investment banking growth held back by its low base, limiting its contribution to overall results.
Chen Xingwen, chief strategy officer at Black Sesame Capital, analyzed that technology investment has created short-term earnings pressure, with Chinalin Securities Co.,Ltd. pursuing a "trade time for space" approach. The performance decline reflects a strategic realignment, with the core reason behind rising revenue but stagnant profits being technology spending that pushed total operating expenses to 563 million yuan. Looking at the specifics, proprietary trading net income plummeted 71% to 66 million yuan—while appearing to result from equity market volatility, it actually reflects the company's deliberate reduction of high-risk exposure to redirect resources into technology infrastructure. Brokerage income surged 39% to 456 million yuan, credit business grew steadily by 20% to 232 million yuan, and investment banking rebounded 253% from a low base to 29 million yuan. The company's fundamental business mix is shifting from volatile proprietary trading toward more sustainable traffic and service-based revenue streams.
Chinalin Securities Co.,Ltd. is pursuing differentiated competition, establishing an AI-broker strategic direction, accelerating digital and intelligent transformation, and leveraging technology to empower its operations. Chen further noted that Morgan Stanley and Goldman Sachs' digital transformations have proven that a brokerage's core moat is no longer its license but the depth of technology integration across the entire business chain. Drawing on global precedents—Charles Schwab breaking through traditional brokerage competition through advisory services, and Robinhood opening new growth avenues in retail finance with AI agency business—Chinalin Securities Co.,Ltd.'s "AI broker" strategy aligns precisely with the industry's transformative trend. As early technology investments begin yielding returns, the company could establish a differentiated breakthrough model for mid-to-small brokers and build long-term competitive barriers in niche tracks.
Regulatory Penalties Accumulate
During the first half, Chinalin Securities Co.,Ltd. received several regulatory penalties. In January, the Liaoning Securities Regulatory Bureau issued a warning letter to the company's Liaoning branch, citing a failure to effectively segregate incompatible positions when handling customer complaints. The branch has since completed rectification in accordance with regulatory requirements.
In March, the Shenzhen Securities Regulatory Bureau imposed corrective measures on Chinalin Securities Co.,Ltd. Following investigation, as the continuing supervision institution for Yili Clean Energy's 2016 private placement project, the company's verification procedures were found insufficient during performance of its duties, failing to exercise due diligence and missing issues including misappropriation of raised funds and undisclosed related-party guarantees. Additionally, the company's quality control and internal review departments failed to provide adequate scrutiny, with imprudent verification conclusions revealing weak internal controls in investment banking operations. The company has completed remediation for these issues.
In April, the Tibet Securities Regulatory Bureau issued a warning letter to Chinalin Securities Co.,Ltd. directly addressing multiple violations: first, historical brokerage operations involved revenue sharing with third-party institutions, marketing incentive schemes directly tied to account opening numbers, and vulnerabilities in QR code management for securities account opening channels; second, inadequate management of brokers, including non-standardized broker contract management; and third, insufficient oversight of branch marketing activities, with compliance requirements not permeating all aspects of branch marketing operations.
For the first half of 2026, 51 brokers reported fund sub-brokerage commissions exceeding 10 million yuan. Chinalin Securities Co.,Ltd.'s fund sub-brokerage commissions grew 121.2% year-on-year to 2.831 million yuan, with a commission seat share of 0.03%, ranking near the bottom of the industry.