A record-breaking first half for A-share market turnover and a steady bull run in the bond market set the stage for a robust earnings season across the brokerage sector. Industry-wide parent-company data shows revenues climbed 32% year-on-year in the first six months, with net profits up 23%. Listed brokers outperformed the broader pack, with 44 A-share pure-securities firms posting combined revenues of RMB 375.215 billion, a 44.39% surge, and aggregate net profits attributable to shareholders of RMB 163.434 billion, up 48.86%.

Among these 44 firms, CITIC Securities led in both revenue and profit, while Pacific Securities trailed at the bottom. China Merchants Securities posted the fastest revenue growth at 108.19%, whereas Hongta Securities saw the steepest decline at 14%. Tianfeng Securities reported a staggering 549.03% jump in net profit, while Hongta Securities suffered the sharpest drop at 23.93%. Only Great Wall Securities and Hongta Securities logged negative revenue growth, and just Hongta Securities and Hualin Securities recorded declining net profits.

Northeast Securities Co.,Ltd. saw the largest contraction in net capital among all listed brokers during the period. From a liquidity risk-control perspective, Guotai Haotong held the highest net capital (parent-company basis) at RMB 225.987 billion by end-June, while Hualin Securities had the lowest at just RMB 5.702 billion. In terms of change, Guotai Haotong added the most, increasing by RMB 40.9 billion, whereas China Merchants Securities reduced by the largest amount, RMB 2.461 billion. By percentage, Guotai Haotong led with a 22.10% gain, but Northeast Securities Co.,Ltd. suffered the worst decline at -6.96%.

Notably, Northeast Securities Co.,Ltd. posted a substantial profit increase in the first half, yet its net capital fell by the most. The company generated total operating revenue of RMB 2.647 billion, up 29.38% year-on-year, with net profit attributable to shareholders climbing 77.49% to RMB 764 million. Breaking down the segments, wealth management delivered RMB 1.530 billion in revenue, a 43.86% increase with an operating margin of 78.94%, making it the largest income source. Securities investment brought in RMB 758 million, up 59.87%. Investment banking net income rose 73.16% to RMB 60 million, with a 26.27% margin. Asset management revenue grew 58.58% to RMB 384 million, while fund management revenue increased 21.1% to RMB 375 million.

Beneath this seemingly broad-based growth, liquidity pressure has quietly intensified. According to Wind data, the 44 listed brokers collectively held approximately RMB 1.88 trillion in net capital by end-June, up 6.6% from end-2025, reflecting overall expansion. Among major players, Guotai Haotong reached RMB 225.987 billion with a 22.10% increase, CITIC Securities hit RMB 181.039 billion with a 15.20% rise, and even the smallest, Hualin Securities, grew 4.04%. Northeast Securities Co.,Ltd., however, ranked last in the industry with a -6.96% drop. In absolute terms, its net capital fell from RMB 17.740 billion at end-2025 to RMB 16.506 billion, a reduction of about RMB 1.235 billion. With total assets at RMB 129.57 billion, the net capital-to-debt ratio has slid from 32.43% to 26.67%, and net assets-to-debt from 33.90% to 30.39%, signaling mounting pressure from passive leverage.

From an asset-side view, total assets expanded 14.41% to RMB 129.57 billion during the period, while net capital contracted 6.96%, widening the gap between asset growth and capital replenishment. If this trajectory continues, the company will face increasingly binding capital constraints when scaling its operations. A credit rating report from Lianhe Credit Rating showed that by end-March 2026, net capital had declined 4.26% from end-2025, primarily due to subordinated bonds nearing maturity reducing supplementary net capital, with both risk coverage and capital leverage ratios trending downward.

More concerning is the collective deterioration across several core risk-control metrics for Northeast Securities Co.,Ltd. Comparing end-June 2026 with end-2025, the risk coverage ratio fell from 224.46% to 196.45%, a drop of 28.01 percentage points, breaching the 200% threshold. The capital leverage ratio slipped 0.89 percentage points to 15.44% from 16.33%, and the net stable funding ratio edged down 0.94 percentage points to 162.27% from 163.21%.

Extending the timeline reveals an even clearer downtrend. From end-2024 to end-June 2026, the risk coverage ratio has fallen from 244.86% to 196.45%, a cumulative decline of 47 percentage points. The capital leverage ratio has dropped nearly 4 percentage points from 19.22% to 15.44%, and the liquidity coverage ratio has retreated 28 percentage points from 240.2% to 211.83%. Against regulatory warning thresholds—risk coverage ≥120%, capital leverage ≥9.6%, liquidity coverage ≥120%, and net stable funding ≥120%—the current levels remain within safe bounds, but the safety cushion is being rapidly eroded amid accelerating capital consumption.

With net capital under strain, compliance pressures also loom large. In April 2026, the Beijing Stock Exchange issued two citations against Northeast Securities Co.,Ltd., both involving a failure to exercise due diligence. In July 2026, the Jilin Securities Regulatory Bureau issued a warning letter to a former chief computer analyst, Yuanyang Zhao, citing public comments deemed inappropriate. Indeed, from March 2022 to April 2026, over four years, the company has received at least eight regulatory warning letters, two verbal warnings, and two penalties resulting from investigations by the CSRC, underscoring persistent internal control and compliance issues.

Lianhe Credit Rating noted that the company’s internal control management requires improvement. Since 2024, Northeast Securities Co.,Ltd. has faced an unprecedented frequency of penalties, as regulators intensify pressure on intermediaries to fulfill their gatekeeper roles. Violations have been identified in both its brokerage and investment banking operations, highlighting the need for enhanced internal governance.