Guotai Haitong Securities Co., Ltd. (SSE: 601211) has delivered its first complete semi-annual report since the merger, posting record revenue of 47.163 billion yuan and a net profit attributable to shareholders of 20.26 billion yuan for the first half of the year. Yet, August has brought a wave of risk incidents to the surface, casting a shadow over the company's integration progress.
Among the notable events, Guotai Haitong's asset management arm was fined and had illegal gains confiscated totaling 52.5474 million yuan for QDII foreign exchange violations, while a final court ruling ordered the company to bear 50% joint liability in the Kangni Electromechanical false statement case. Additionally, questions have been raised about the prudence of its research report rating on Aerospace Hongtu, and its investment banking sponsorship projects have faced consecutive regulatory measures. Meanwhile, its overseas subsidiary, Haitong International, continues to post losses with negative net assets. These intertwined regulatory penalties, civil liabilities, and legacy issues are testing the 2.5-trillion-yuan brokerage giant as it navigates the challenging depths of post-merger integration.
Where the penalties and verdicts converge
On August 17, the Shanghai branch of the State Administration of Foreign Exchange issued three administrative penalty decisions, all targeting the Guotai Haitong system. Shanghai Guotai Haitong Securities Asset Management was penalized for violating QDII foreign exchange regulations and failing to complete indirect declarations for balance of payments statistics, receiving a warning, confiscation of illegal gains, and fines totaling 52.5474 million yuan—including a 25.874 million yuan fine and 26.6734 million yuan in confiscated gains. The parent company faced a 150,000 yuan fine for similar declaration failures and foreign exchange account rule violations, and an individual named Zhang was fined 70,000 yuan. Reports indicate these violations occurred between 2019 and 2022, representing legacy issues from before the April 2026 merger, which the surviving entity has now inherited. This marks one of the largest foreign exchange penalties seen in the brokerage asset management sector in recent years.
Just days earlier, a nine-year civil dispute reached its conclusion. On August 10, Kangni Electromechanical announced the Jiangsu High Court's second-instance ruling: overturning the first-instance judgment and ordering Kangni to compensate investors for investment losses of 99.7993 million yuan in a securities misrepresentation case, with Guotai Haitong, serving as independent financial advisor for Kangni's 3.4-billion-yuan cross-border acquisition in 2017, bearing 50% joint liability. In another upheld ruling, Kangni must pay investors 33.0931 million yuan in losses and case fees, with Guotai Haitong again assuming 50% joint liability. Based on these judgments, the combined joint compensation for Guotai Haitong is estimated at approximately 66 million yuan. The 50% joint liability ratio has drawn significant industry attention, as such a high proportion for a top-tier brokerage is rare in recent securities misrepresentation cases. While Guotai Haitong has stated that provisions have been made for these liabilities and that the impact on current profits is not material, the reputational damage to its investment banking franchise extends far beyond the one-time financial cost.
Gatekeeper role under scrutiny; overseas burden remains unresolved
While the fines and verdicts resolve historical business issues, controversies in research and sponsorship highlight ongoing shortcomings in professional prudence. On March 13, 2026, Guotai Haitong released its first coverage report on Aerospace Hongtu (later designated *ST Hangtu), titled "Full-Chain Going Global: Revaluing the Aerospace Leader," assigning its highest "Overweight" rating with a target price of 32.65 yuan. Public information, however, reveals that on February 27, the company's earnings forecast had already indicated an 66.11% year-on-year decline in revenue and a net loss of 1.169 billion yuan, with its share price falling roughly 30% over the year. Subsequently, Aerospace Hongtu received a "disclaimer of opinion" from its auditor for its 2025 annual report, and its net assets turned negative. On August 7, the company and its actual controller Wang Yuxiang were placed under investigation by the CSRC for suspected information disclosure violations, sending the stock price lower. The issuance of a top rating at a time when risk signals were already pronounced has led to market criticism over a lack of professional prudence.
The investment banking sponsorship business has also faced multiple issues. In May 2025, the Shenzhen Stock Exchange found that Guotai Haitong failed to adequately review the effectiveness of internal controls at Zhongding Hengsheng during its IPO sponsorship, inadequately verified financial information and R&D expenses, failed to standardize revenue recognition, and omitted critical capital flow checks. The exchange issued a notice of criticism, and two sponsor representatives received the maximum penalty—a six-month ban on accepting their signed issuance applications. In March 2026, the Shanghai Securities Regulatory Bureau issued warning letters regarding the original Haitong Securities' sponsorship of PuLe Pharmaceutical's 2020 private placement and 2021 convertible bond projects, citing inadequate follow-up supervision and imperfect internal quality control—PuLe ultimately delisted. In the Energy Saving Iron Han restructuring project, the company received written warnings for failing to detect that the target had recognized revenue two years early. In July, the Beijing Tongmei STAR Market IPO, sponsored for nearly four years, was withdrawn during the registration stage.
Data from Wind shows that since the April 2025 merger, Guotai Haitong has received at least nine penalties or regulatory measures spanning investment banking sponsorship, follow-up supervision, OTC derivatives, overseas subsidiaries, and brokerage business—indicating systemic compliance gaps across its operations.
The overseas subsidiary represents another unresolved legacy liability. Haitong International, once a flagship platform for Chinese brokerage internationalization, saw its performance collapse from 2021 due to heavy holdings of Chinese property developer USD bonds, accumulating losses exceeding 17 billion HKD through 2022, 2023, and the first half of 2024 before being privatized in 2024. While losses narrowed after integration into the Guotai Haitong system, the subsidiary still reported a 3.268 billion HKD loss for 2025, directly reducing consolidated net profit by approximately 3 billion yuan. The 2026 semi-annual report shows that Haitong International's net assets stood at -16.252 billion HKD as of June 30, further deteriorating year-on-year. Additionally, the company continues to pursue recovery of a 205 million USD legacy debt from Sunshine 100 China, indicating that some historical risk assets have yet to be fully cleared.
The integration process also faces leadership transitions, as the company's first post-merger president, Li Junjie, resigned all positions on July 5, 2026, due to a work transfer, with Chairman Zhu Jian currently assuming presidential duties—core management restructuring remains ongoing. From a financial safety perspective, Guotai Haitong's net capital stood at 225.987 billion yuan as of June 30, 2026, with a risk coverage ratio of 269.86% and liquidity coverage ratio of 290.72%, both above regulatory thresholds. Management has stated at earnings calls that efforts to restore Haitong International's balance sheet are being accelerated, with plans to clarify subsidiary integration plans within the year.
Against a backdrop of intensifying regulatory scrutiny on intermediaries' "gatekeeper" responsibilities and the normalization of civil compensation lawsuits, investment banking quality, research independence, and cross-border risk management capabilities are becoming competitive metrics as important as capital scale. For Guotai Haitong, the question of whether the merger can build scale has been answered—but whether it can build strength remains a test that time and continued remedial efforts will ultimately determine.