As the 2026 interim report disclosure window arrives, the performance of the securities sector is being fully realized. As of July 11th, nine listed securities firms have released their first-half earnings forecasts, with all of them, from industry leaders to mid-sized and regional small-to-medium firms, projecting growth in net profit.
Supported by multiple positive factors including a recovery in market trading activity, the expansion of IPOs on the Sci-Tech Innovation Board (STAR Market), and a structural uptrend in the equity market, the second-quarter earnings growth rate has exceeded market expectations. Even with a high base in the first quarter, the industry as a whole has achieved a significant sequential improvement in performance. The collaborative efforts of diversified businesses have laid a stable foundation for growth. Coupled with the upcoming catalyst of major STAR Market listings like Changxin Technology, the current valuation of the securities sector does not yet fully reflect its long-term growth potential, suggesting a sustained valuation recovery is well-supported.
Second-Quarter Profit Growth Exceeds Market Forecasts
Overall, leading securities firms maintain their position at the forefront of the industry in terms of profit scale, while small and medium-sized firms leverage their lower base to release greater earnings flexibility. The growth in adjusted net profit confirms that the increase is supported by genuine operational performance rather than one-time gains.
Among the top firms, CITIC Securities achieved attributable net profit of 233.43 billion yuan in the first half, a year-on-year increase of 69.59%. Its adjusted attributable net profit was 236.1 billion yuan, up 73.4% year-on-year. Second-quarter net profit rose 28.5% sequentially, reaching a new historical high for the period.
Guotai Junan Securities and Haitong Securities are expected to achieve attributable net profit in the range of 200.03 billion to 205.11 billion yuan for the first half, representing year-on-year growth of 27% to 30%. Their adjusted net profit surged 164% to 171% year-on-year. The contrast in growth rates stems from the inclusion of one-time negative goodwill merger gains in the same period of 2025, making the adjusted net profit a better reflection of true operational capability. Second-quarter performance doubled sequentially.
China Merchants Securities projects attributable net profit of 100 billion to 110 billion yuan for the first half, up 93% to 112% year-on-year. Its adjusted net profit growth aligns with the attributable net profit, with second-quarter sequential growth exceeding 100%, leading among top-tier firms. Its half-year net profit is poised to enter the 100-billion-yuan club.
China International Capital Corporation (CICC) expects attributable net profit between 77.08 billion and 82.27 billion yuan, an increase of 78% to 90%. Its core growth drivers are high-end investment banking and cross-border business, with adjusted net profit maintaining a similarly high growth range of 78% to 90%.
Among regional mid-sized brokers, Changjiang Securities projects attributable net profit of 31.26 billion to 33 billion yuan, an 80% to 90% year-on-year increase, with clear sequential improvement in the second quarter. Regional brokerage and credit businesses provide stable cash flow contributions.
Caitong Securities expects attributable net profit of 18.4 billion to 19.5 billion yuan, up 70% to 80% year-on-year. Its adjusted net profit is forecast between 18.2 billion and 19.2 billion yuan, a 75% to 85% increase, marking a record high for the period.
Zhongtai Securities achieved attributable net profit of 17.52 billion yuan, surging 146.31% year-on-year. Its second-quarter net profit grew 173.6% sequentially, showing the strongest earnings flexibility among mid-sized firms.
Among smaller brokers, Cinda Securities projects attributable net profit in the range of 7.12 billion to 8.09 billion yuan, representing 90% to 116% year-on-year growth. Its wealth management and securities investment businesses saw substantial simultaneous growth, with regional brokerage contributing stable foundational earnings.
Tianfeng Securities expects attributable net profit between 1.64 billion and 2.46 billion yuan, a massive year-on-year increase of 429.03% to 693.55%, the highest among the nine disclosing firms. The core drivers were a significant year-on-year recovery in brokerage commissions and proprietary investment income, with the exceptionally high flexibility stemming from a low base in the same period last year.
This demonstrates that leading securities firms are reaching new highs in profit scale, with their comprehensive operational strength continuing to lead the industry. Balanced business structures are driving steady profit growth. Regional small and medium-sized brokers have also delivered impressive results, with the benefits of wealth management and asset management transformation continuing to materialize.
The second quarter has become the core inflection point for this round of securities sector growth, with many firms showing significant sequential improvement. Against the backdrop of a high first-quarter base, the sector's second-quarter profit growth exceeded earlier market forecasts, dispelling pessimistic expectations of a "high first, low later" pattern for securities firm earnings. This proves the current industry upturn is sustainable, not merely a short-term, transient rebound.
Three Major Long-Term Growth Drivers Fueling Performance
In the first half of 2026, equity indices steadily climbed, and the hard-tech sector on the STAR Market experienced a strong structural rally, becoming the core variable driving incremental earnings for securities firms. On one hand, brokerages' proprietary investments in equity assets fully benefited from the market rise, leading to substantial increases in investment income and gains from changes in fair value. On the other hand, the system benefits of the "sponsorship + follow-on investment" model under the registration-based system on the STAR Market continue to be released. Securities firms, through early-stage direct investments and mandatory IPO follow-on investments, have locked in significant equity stakes in tech-innovation companies. As the valuations of these STAR-listed stocks rise, profits are augmented from both proprietary and direct/follow-on investments, with paper gains continuously realized, bringing significant incremental contributions to mid-term performance.
The continuous listing of new tech-innovation stocks further amplifies the catalytic effect on the securities sector. On July 9th, Changxin Technology disclosed its issuance arrangements and preliminary inquiry announcement, formally initiating its STAR Market IPO process, with the new share subscription date set for July 16th. As a core leader in the memory chip sector, Changxin Technology's listing will directly benefit China Merchants Securities and Huaan Securities, which are deeply involved in direct and follow-on investments. The equity holdings of these two brokers are expected to generate substantial paper profits, providing a direct short-term catalyst for their stock prices.
However, the market generally views the proprietary and follow-on investment gains driven by the tech-innovation rally as short-term, event-driven flexibility, with related pricing already partially reflected in current stock prices, constituting only a temporary market catalyst.
From a long-term perspective, three major growth narratives underpin the fundamental earnings base for securities firms, thereby weakening cyclical volatility. Unlike the previous singular reliance on stock market turnover, the primary support for this round of high securities firm earnings growth stems from three long-term growth avenues: wealth management, overseas expansion, and the synergy between investment banking and investment. This is also the core logic for the securities industry to break away from its dependence on market conditions and achieve stable profit growth.
First, the ongoing wealth management transformation is generating stable, light-asset income. Sustained active market trading is driving steady growth in brokerage commissions and margin lending interest income. Simultaneously, the continued migration of household assets into the equity market is leading to the expansion of fund distribution, buyer's advisory services, and actively managed asset management scale. The proportion of fee-based income continues to increase, hedging against the impact of secondary market volatility on profits.
Second, the steady expansion of overseas business is opening up incremental space. Leading securities firms are continuously increasing their overseas capital deployment. Cross-border investment banking, cross-border wealth management, and overseas institutional trading businesses are showing sequential growth. The leverage and profitability of overseas subsidiaries are steadily improving, becoming a source of differentiated competition and long-term earnings growth.
Third, the full-chain synergy between investment banking and investment is continuously releasing primary market dividends. The pace of STAR Market IPO issuance accelerated significantly in 2026, with equity and bond underwriting businesses expanding and underwriting and sponsorship fees growing steadily. Concurrently, the closed loop of "direct investment + sponsorship + follow-on investment" has taken shape. Securities firms are deeply involved in providing full lifecycle services for tech-innovation enterprises, realizing gains from both primary and secondary markets. Investment banking revenue is no longer solely dependent on one-time underwriting fees.
Under this multi-business synergy, the profit structure of securities firms continues to optimize. Stable fee-based income and flexible investment income complement each other, significantly enhancing the industry's resilience to cycles. This is the underlying logic supporting the sustainability of the current high earnings growth in the securities sector.
Significant Room Remains for Revaluation
There is currently a clear mismatch between fundamentals and valuation in the securities sector. Valuations have not yet caught up with growth potential, leaving ample room for revaluation, especially for leading firms. Although interim reports project across-the-board significant earnings growth and the industry's profit center has systematically shifted upward, the sector's overall valuation remains at a historical low. It has not yet fully priced in the three long-term growth curves of wealth management, internationalization, and tech-innovation investment banking/investment, indicating substantial room for a revaluation rally.
In the short term, the proprietary and follow-on investment gains from rising tech-innovation stocks represent a temporary market dividend, which is relatively well-priced by the market. The earnings disclosure phase may trigger short-term stock price volatility in the sector. From a medium-to-long-term perspective, the three major growth themes of wealth management, overseas expansion, and investment banking/investment synergy are sustainable and constitute the core logic supporting the long-term valuation uplift for securities firms, which has not yet been fully recognized by the market.
Regarding investment themes, investors may prioritize leading securities firms with low valuations and prominent growth prospects. Leading brokers possess advantages in scale, comprehensive business layout capabilities, tech-innovation project pipelines, and overseas expansion resources, enabling them to fully benefit from the three long-term tailwinds of capital market expansion, hard-tech industry financing, and household wealth transfer. Their profit stability and growth potential simultaneously lead the industry, offering greater scope for valuation recovery and revaluation. Simultaneously, attention can be paid to distinctive mid-sized brokers with deep exposure to high-quality tech-innovation direct investment projects and leading wealth management transformation, to capture short-term trading opportunities arising from new stock listings.
The across-the-board projected growth in the 2026 securities sector interim reports is the inevitable result of the resonance between high capital market activity and industry transformation dividends. In the short term, active market turnover, the expansion of tech-innovation IPOs, and listings like Changxin Technology continue to provide catalysts for both earnings and stock prices. From a medium-to-long-term perspective, the three major growth themes of wealth management, overseas business, and investment banking/investment synergy are reshaping the industry's profit model. Securities firms' earnings growth is expected to break free from the constraints of a single market cycle, with profit stability significantly enhanced.
The current valuation of the securities sector still does not match its continuously improving profit growth. As interim reports are fully disclosed later and capital market financing normalizes, the sector's valuation recovery rally is expected to continue. Leading securities firms with comprehensive business advantages, low valuations, and high growth are likely to be the core theme of this market movement.