Driven by robust market activity and policy tailwinds, the first half of this year saw listed brokerages experience another surge in profitability. According to Wind data, 50 listed brokerage firms collectively generated operating revenue of 371.53 billion yuan in the first six months, a year-on-year increase of approximately 43%, while their combined net profit attributable to shareholders reached 167.22 billion yuan, up around 48%. Using the average net profit growth rate of 48% as a benchmark, 23 of the listed brokerages exceeded this threshold, accounting for nearly half of the total.
Amid the backdrop of strong industry-wide growth, the more notable developments lie in the internal reshuffling of rankings and the divergence in performance across firms. On the scale front, the number of brokerages in the "trillion club" grew from two to five compared to the same period last year. In addition to Haitong Securities and CITIC Securities, newcomers include Huatai Securities, GF Securities, and China Galaxy Securities. The competition among top-tier brokerages is intense, with China Merchants Securities more than doubling both its revenue and net profit, achieving a significant leap in ranking. Meanwhile, smaller and mid-sized firms such as Tianfeng Securities, Xiangcai Co., Ltd., and Zhongtai Securities have also posted substantial profit gains, successfully breaking through the competitive landscape.
Tian Lihui, a finance professor at Nankai University, attributed the strong first-half performance to the elasticity of brokerage, margin financing, and proprietary trading income generated by the active market, combined with the bond market rally and policy dividends. However, he noted that the revenue structure still heavily depends on market cycles.
It is noteworthy that despite the generally favorable earnings reports, institutional positioning has shifted quietly. In the first half, some brokerage stocks saw increased holdings from insurers and foreign investors, while Central Huijin Asset Management Co., Ltd. (the "Central Huijin") exited the top ten shareholders of Founder Securities, CITIC Securities, and Guoyuan Securities.
Reshuffling of Top Ranks: China Merchants Securities Jumps to Fifth Place
The competition among leading brokerages has many highlights in the first half. In terms of total assets, the number of firms with assets exceeding one trillion yuan expanded from two to five, namely Haitong Securities, CITIC Securities, Huatai Securities, GF Securities, and China Galaxy Securities. Among them, Huatai Securities reported total assets of 1.36 trillion yuan, a 50% year-on-year increase, the fastest growth rate among the five. From a ranking perspective, Haitong Securities surpassed CITIC Securities with total assets of 2.50 trillion yuan, moving from second to first place compared to the same period last year. Huatai Securities, GF Securities, and China Galaxy Securities ranked third, fourth, and fifth, respectively, with their positions unchanged year-over-year.
In terms of revenue, the top ten are CITIC Securities, Haitong Securities, GF Securities, Huatai Securities, China Merchants Securities, CICC, China Galaxy Securities, CSC, Shenwan Hongyuan, and Guosen Securities. CITIC Securities and Haitong Securities led with revenues of 49.69 billion yuan and 47.16 billion yuan, respectively, maintaining their top-two positions from last year, though Haitong's growth rate slightly outpaced CITIC's. GF Securities and Huatai Securities swapped places, with revenues of 26.88 billion yuan and 23.66 billion yuan, respectively, as GF's revenue surged 74%, widening the gap between the two. Notably, China Merchants Securities saw its revenue grow 108% year-on-year to 21.9 billion yuan, making it the only listed brokerage to double its revenue, propelling its ranking from tenth to fifth. CICC maintained its sixth-place position, CSC moved up one spot to eighth, while China Galaxy Securities, Shenwan Hongyuan, and Guosen Securities each fell two places compared to last year.
On the profitability front, the number of brokerages with net profits exceeding ten billion yuan also increased from two to five, with Huatai Securities, GF Securities, and China Merchants Securities joining Haitong Securities and CITIC Securities. CITIC Securities led with 23.34 billion yuan, followed by Haitong Securities at 20.26 billion yuan. Huatai Securities retained third place, while GF Securities reported 11.65 billion yuan, rising one spot to fourth. China Merchants Securities saw its net profit surge 104.87% to 10.62 billion yuan, climbing from eighth to fifth, again the only top-tier firm to double its earnings. Elsewhere, East Money posted a net profit of 8.06 billion yuan, up nearly 45%, but its ranking slipped one place to seventh. China Galaxy Securities fell from fourth to eighth, and Guosen Securities from seventh to tenth.
The growth rates of smaller and mid-sized brokerages were equally striking. Wind data shows that seven listed brokerages reported net profit growth exceeding 100% in the first half, with smaller firms comprising the majority: Tianfeng Securities, Xiangcai Co., Ltd., Huachuang Yunxin, Zhongtai Securities, China Merchants Securities, Cinda Securities, and Huaan Securities. Among them, Tianfeng Securities and Xiangcai Co., Ltd. grew by 549% and 273%, respectively, though their absolute profit figures remain modest. Tianfeng Securities reported revenue of 1.59 billion yuan, up 29.94%, and net profit of 204 million yuan, up 549%. Xiangcai's revenue was a mere 10 million yuan, down 94.98%, with net profit of 529 million yuan, up 273%. Conversely, Jinlong Co., Hongta Securities, and Hualin Securities saw negative net profit growth, making them the only three listed brokerages to experience earnings declines.
Additionally, the return on equity (ROE), a key profitability indicator has been steadily recovering. Wind data indicates that the median half-year ROE (weighted) for the sector rose to 4.11%, an 0.89 percentage point increase from 3.22% a year earlier. Seventeen brokerages achieved ROE above 5%, with East Money topping the list at 8.46%, followed by Changjiang Securities, CSC, China Merchants Securities, GF Securities, and Huaan Securities, all exceeding 8%.
Tian Lihui explained that the ROE recovery to above 4% signals improved capital efficiency and business synergy, with some brokerages enhancing leverage utilization and spread management. The sustained ROE rebound indicates that profit growth is not solely driven by a buoyant market recovery, but rather a genuine improvement in capital utilization efficiency. He believes this points to a core signal that domestic brokerages are transitioning from cyclical channel service providers to modern investment banks with lasting capital appreciation capabilities. However, he cautioned that the half-year ROE remains at historical mid-to-low levels, and earnings stability is insufficient when adjusted for proprietary trading volatility. Sustainable ROE improvement will crucial depend on whether the share of less cyclical businesses, such as wealth management and capital intermediation, can materially increase.
Drivers of Performance Divergence: Huaan Securities' Alternative Investment Arm Sees Net Profit Surge Eightfold
The market rebound and active trading in the first half provided a common tailwind for brokerage earnings growth. However, it is the high-beta business segments, particularly investments, that have widened the profit gap among firms. For instance, China Merchants Securities saw both revenue and net profit double, partly benefiting from its strategic focus on tech-related businesses. Revenues from its investment management and investment & trading segments grew by 148.65% and 325.63%, respectively, reaching 1.28 billion yuan and 10.89 billion yuan. Notably, the investment & trading segment’s share of total revenue jumped from under 30% last year to nearly 50% this half, surpassing wealth management and institutional business (8.26 billion yuan, ~37%) as the primary revenue source.
Among smaller peers, Huaan Securities reported a 102.55% increase in net profit to 2.10 billion yuan, also driven by high-growth investment activities. Its private equity subsidiary, Hua'an Jiaye, achieved revenue of 777 million yuan, up 531%, and net profit of 571 million yuan, up 613%. Hua'an's alternative investment arm, Huafu Ruixing, posted revenue of 734 million yuan, up 706%, and net profit of 534 million yuan, an increase of 836%.
This year, brokerages have also garnered market attention for the floating gains generated from follow-on investments in the tech sector. For example, Changxin Technology and Unitree, which IPO'd during the year, had earlier investments from subsidiaries or affiliated funds of several brokerages, including China Merchants Securities, Huaan Securities, CSC, Founder Securities, CICC, and Hualong Securities, resulting in substantial paper gains on their listing days. Industry insiders suggest that while the rally has broadly benefited brokerages, the differentiation in rankings is now driven not only by market turnover but also by capital deployment capabilities and business structure, which are becoming key factors in creating distance between firms.
Insurers and Foreign Funds Increase Stakes; Central Huijin Exits Top Ten of Founder Securities and CITIC Securities
Despite the "bull market flag-bearers" reporting record profits, their stock price performance has diverged. Wind data shows that only 8 of the 50 listed brokerages saw their share prices rise in the first half. Huaan Securities led with a 63.86% gain, while China Merchants Securities and Changjiang Securities each rose over 20%. Conversely, Guosheng Securities, Xiangcai Co., Ltd., Jinlong Co., and Capital Securities were among the worst performers, each falling more than 20%.
In the second quarter, institutional holdings of brokerage stocks shifted. Goldman Sachs International, a foreign institution, newly became a top-ten shareholder of Hualin Securities with 2.78 million shares. The Stock Connect increased holdings in nearly 20 brokerages, including Orient Securities, Cinda Securities, Huatai Securities, China Merchants Securities, and CITIC Securities, with the latter two receiving net additions of 68 million and 54.6 million shares, respectively. It also newly entered the top ten of Haitong Securities with 276 million shares.
Insurance funds were also active in the second quarter. New China Life Insurance newly entered the top ten shareholders of Orient Securities and Huatai Securities, holding 135 million and 86.7 million shares, respectively. Cigna & CMB Life Insurance newly appeared in Cinda Securities' top ten with 19.28 million shares.
Changes were also observed among "national team" investors like Central Huijin and the National Social Security Fund. From the end of Q1 to the end of Q2, a "national team" presence was recorded in the top ten shareholders of 16 brokerages, including Founder Securities, Guosen Securities, Industrial Securities, GF Securities, Dongxing Securities, Orient Securities, Haitong Securities, CICC, Huatai Securities, and Shanxi Securities. However, Central Huijin exited the top ten shareholder lists of several brokerages in Q2, including CITIC Securities, Founder Securities, Guoyuan Securities, Northeast Securities, and Shanxi Securities. Additionally, the Social Security Fund's 118 portfolio reduced its holdings in Founder Securities by nearly 20 million shares.
Tian Lihui opined that the increased positioning by foreign funds and insurers is driven by long-term allocation logic based on low valuations, high dividends, and expectations for capital market reforms, with insurers particularly focused on dividend yield and duration matching. Conversely, the "national team's" reduction reflects counter-cyclical adjustments and positioning optimization, not a bearish industry view, but rather a move to reclaim liquidity and smooth volatility as market sentiment warms. The divergence stems from the differing nature of the funds and their objective functions. "This trend indicates that brokerage stock pricing is shifting from a single policy signal to a game involving multiple participants, with long-term funds recognizing medium-term value and policy funds smoothing cyclical fluctuations, which should enhance pricing efficiency and long-term stability," Tian added.