Chinese brokerage stocks are among the top gainers in today's session. At the time of writing, shares of GLMS SEC (01456) are up 3.27% to HK$4.11. CSC (06066) shares have risen 3.16% to HK$12.09. CITIC SEC (06030) shares have gained 3% to HK$28.14. CGS (06881) shares are up 2.12% to HK$7.69.

Catalyst for the Rally

The sector's strong performance is driven by the peak realization period for investments in science and technology innovation enterprises, contributing to robust first-half earnings growth for the industry. Reports indicate that as of July 19th, 17 listed brokerages have issued preliminary profit growth announcements, with five of them reporting a year-on-year net profit increase exceeding 100% for the first half.

Additionally, five other brokerages have released unaudited financial statements for the period. Among these, one firm turned a profit from a loss, while two others also achieved a doubling of their net profit.

Analyst Commentary

A research team led by analyst Sun Ting at Soochow Securities noted that the strong market activity since the beginning of the year supports the positive outlook. The average daily stock and fund trading volume has been near RMB 3.3 trillion, nearly doubling year-on-year, while margin lending and securities lending balances are close to RMB 3 trillion.

The team also highlighted that brokerages' direct investment and co-investment businesses are benefiting from the successive listings of tech innovation IPOs. Consequently, they have revised their full-year earnings forecast upward. Under a neutral scenario, they project a 36% year-on-year increase in the industry's net profit for 2026.