The slow bull market in A-shares during 2025 has significantly improved the performance of securities firms, though high growth masks underlying divergence. Some small and mid-sized brokerages have seen declines in investment banking and asset management businesses, leading to lower earnings. Meanwhile, trading activity in the futures market has risen, increasing the contribution of futures subsidiaries to securities firms. However, facing intense competition, heightened market volatility, and stricter regulation, futures companies are boosting capital, pursuing IPOs in Hong Kong, and merger expectations are growing. Brokerage-affiliated futures subsidiaries are shifting from price competition to a new phase of quality-driven breakthroughs.

Since the beginning of 2025, A-shares have experienced a slow bull market with active trading, driving a substantial increase in brokerage earnings. Recent performance forecasts indicate that most securities firms showed notable improvement in 2025, with overall profits maintaining growth.

Six brokerages achieved profit growth exceeding 100%, while 19 firms saw growth rates above 50%. Among the 29 brokerages that have disclosed results, six reported increases of over 100%, and 19 reported increases exceeding 50%. For example, CITIC Securities expects 2025 net profit attributable to shareholders of 30.051 billion yuan, continuing to lead the sector; Tianfeng Securities Co.,Ltd. anticipates turning a profit with net income between 125 million and 185 million yuan; Guolian Minsheng Securities Company Limited projects net profit of 2.008 billion yuan, a year-on-year surge of 406%; Xiangcai Co.,Ltd. expects net profit in the range of 400 million to 550 million yuan, up 266.41% to 403.81%.

Industry leader CITIC Securities stated that domestic capital markets generally trended upward in 2025, with a significant rise in trading activity. The company actively seized market opportunities, steadily expanded its client base, and achieved rapid growth in brokerage, investment banking, and proprietary trading revenues. It also advanced its international strategy, deepened cross-border service capabilities, and benefited from strong performance in the Hong Kong market, leading to substantial growth in overseas income.

Guotai Haitong forecasts net profit of 27.533 billion to 28 billion yuan for 2025, an increase of 111% to 115%. The company leveraged brand advantages, economies of scale, and synergies following its merger, achieving growth in client operations, scale expansion, and efficiency improvements, with assets and operating results reaching record highs.

Guotai Haitong also announced asset impairment provisions, recording a loss of 1.63 billion yuan in the fourth quarter of 2025, exceeding 10% of its 2024 net profit. This is related to the merger of Guotai Junan and Haitong Securities' leasing business. The leasing business model focuses on risk control and asset quality while generating profit from interest spreads after deducting expenses and credit impairment losses. Guotai Haitong made provisions based on changes in credit risk for long-term receivables and financial lease receivables. Wind data shows that Haitong Securities' leasing operations are primarily conducted through HAITONG UT, which currently trades at a price-to-book ratio of 0.33.

SDIC Capital also reported that its subsidiary, SDIC Securities, recorded nearly flat revenue for 2025, with net profit reaching 3.42 billion yuan, a year-on-year increase of about 35%.

Overall, according to calculations by non-banking financial analyst Zheng Jisha from China Merchants Securities Co.,Ltd., the combined adjusted net profit of 43 listed brokerages is expected to reach 216.7 billion yuan in 2025, up 55% year-on-year. Brokerage and credit business revenues are projected to grow by about 50% and 43%, respectively. A-shares IPO and refinancing activities surged significantly, driving investment banking revenue up approximately 27%. Proprietary business income is expected to increase by about 35%. "Amid the bullish market sentiment, we are optimistic about the call option characteristics of the brokerage sector and recommend holding positions firmly."

However, some brokerages failed to capitalize on the bull market and saw declines in 2025 performance. Recent announcements from Minmetals Capital Company Limited show that its subsidiary, Minmetals Securities, reported revenue of 1.226 billion yuan, down 9% year-on-year, with net profit falling 52% to 134 million yuan. Net investment banking fee income dropped about 20% to 262 million yuan, while asset management fee income fell 45% to 39.58 million yuan. This follows declines in revenue and profit in 2024, marking another significant drop for Minmetals Securities.

Futures subsidiaries are contributing more profit to brokerages. Beyond active stock trading boosting brokerage, investment banking, and proprietary business earnings, futures market trading has also been lively, especially in recent activity involving stock index futures, precious metals, and non-ferrous metals. This is expected to become a new growth driver for brokerage earnings. Data released by the China Futures Association in January shows that in December 2025, national futures market volume reached 951 million contracts, with turnover of 90.81 trillion yuan, up 45.17% and 58.55% year-on-year, respectively. For the full year 2025, cumulative volume was 9.074 billion contracts, with turnover of 766.25 trillion yuan, increases of 17.4% and 23.74% year-on-year.

Secondary market trends support this. Wind data indicates that from 2025 to February 4, 2026, among over 50 A-share listed companies in the brokerage and futures sectors, Ruida Futures Co.,Ltd. and Nanhua Futures Co.,Ltd. led with gains of 71% and 54.8%, respectively. Xiangcai Co.,Ltd. and Gf Securities Co.,Ltd., as the top-performing brokerages, rose 52% and 35.9% for the full year 2025, leading the brokerage sector but underperforming futures-related stocks.

Wind data also shows that CITIC Futures, a wholly-owned subsidiary of CITIC Securities, reported revenue of 1.83 billion yuan and net profit of 500 million yuan for the first half of 2025, with profit up about 10% year-on-year. Guotai Junan Futures reported net profit of 384 million yuan for the first half of 2025, an increase of nearly 20%.

However, it is worth noting that Nanhua Futures Co.,Ltd.'s third-quarter report showed revenue of 940 million yuan for January-September 2025, down nearly 80% from 4.46 billion yuan in the same period of 2024. Industry leader Yong'an Futures reported revenue of 8.35 billion yuan for the same period, down 55% year-on-year. Why is this?

The 2025 revenue decline is not due to major business risks or industry shifts but rather changes in accounting policies. Rules issued by the China Futures Association require certain trading businesses to recognize revenue on a net basis starting in 2025, significantly impacting futures companies' top-line figures but having little effect on net profit.

Merger expectations for brokerage-affiliated futures subsidiaries are rising. Along with active trading and higher fee income, regulators continue to signal stronger oversight. In January 2026, the China Securities Regulatory Commission sought public comments on the Draft Derivatives Trading Supervision Measures, which comprehensively regulate derivatives trading and settlement, prohibited activities, derivatives institutions, market infrastructure, and supervision and legal liability, aiming to promote high-quality development and enhance risk resilience in the futures and derivatives markets.

Public information shows that in January alone, at least six futures companies received penalties related to referral business, online marketing, internal controls, and other risks. On January 28, the CSRC's Guangdong bureau issued a corrective order against Pioneer Futures' Guangzhou branch, suspending new account openings for six months due to inadequate online marketing management, lack of established systems, and insufficient employee management.

Amid high market volatility and strong regulation, futures companies need to further enhance risk resilience. The Xiamen regulatory bureau recently highlighted supporting local securities and futures firms in raising capital, expanding business scope, and promoting market-oriented restructuring as key tasks. Several brokerages are accelerating capital increases for their futures subsidiaries.

December 2025 announcements indicated that Soochow Securities Co.,Ltd. and other shareholders will jointly inject 500 million yuan into Soochow Futures, increasing its registered capital from 1.032 billion yuan to 1.532 billion yuan. Soochow Securities will contribute 400 million yuan, enhancing capital strength and business development potential.

Additionally, merger prospects for futures companies are promising. Historical development has led to multiple futures firms under the same controller or in the same region competing intensely, increasing industry fragmentation. For example, in Anhui, local state-owned listed brokerages Huaan Securities Co.,Ltd. and Guoyuan Securities Co.,Ltd. control Huaan Futures (registered capital 1 billion yuan) and Guoyuan Futures (registered capital 970 million yuan), respectively. Another state-owned enterprise, Anhui Huishang Group, has a wholly-owned subsidiary, Huishang Futures. Since late 2025, Huishang Futures has increased capital twice, raising registered capital from 760 million yuan to 1.003 billion yuan, surpassing Huaan Futures and Guoyuan Futures and intensifying competition in the provincial futures sector.

Huishang Futures and Guoyuan Futures are both state-owned enterprises in Anhui. A merger would raise registered capital to around 2 billion yuan. If all three merged, total registered capital would reach 3 billion yuan, exceeding that of Everbright Securities' Everbright Futures (1.5 billion yuan) and narrowing the gap with China Merchants Securities Co.,Ltd.'s wholly-owned subsidiary, China Merchants Futures (3.6 billion yuan), significantly enhancing brand image, capital strength, and scale advantages.

Leading futures companies are listing in Hong Kong. Mergers, acquisitions, and IPOs are key strategies for scaling up and strengthening. Given limited near-term prospects for significant relaxation of IPO financing for financial institutions in A-shares, Hong Kong has become an important channel for futures company fundraising. As one of the few listed futures firms in A-shares, Nanhua Futures Co.,Ltd. completed its Hong Kong IPO in December 2025, raising 1.203 billion Hong Kong dollars and achieving dual listing status following Hongye Futures.

The prospectus indicates that Nanhua Futures Co.,Ltd. will allocate IPO proceeds to its wholly-owned subsidiary, Heng Hua International Financial Co., Ltd., to strengthen the capital base of its overseas operations in Hong Kong, the UK, the US, and Singapore.

However, another leading listed futures company, Yong'an Futures, may face pressure. Yong'an Futures currently has a market capitalization of 22.3 billion yuan, over 9 billion yuan higher than Nanhua Futures Co.,Ltd.'s 13 billion yuan. But it has fallen behind in the race for dual A+H listing in the futures industry.

In addition to equity financing, bond issuance has expanded financing channels. Wind data shows that Nanhua Futures Co.,Ltd. raised 500 million yuan through its "25 Nanhua C1" bond in 2025, with a low cost of 3.28%. In contrast, Yong'an Futures last issued bonds in 2020 with "20 Yong'an Bond," which matured and delisted in 2022, and has not issued bonds since, indicating a need to broaden its financing channels.