In the first half of 2026, 43 listed Chinese securities firms generated combined revenue exceeding 360 billion yuan and net profits attributable to shareholders surpassing 150 billion yuan, with year-on-year growth rates both above 45 percent. Among these, five brokerages recorded net profits exceeding 10 billion yuan each. During a recent industry gathering, an executive from a major securities firm faced with these impressive figures chose not to focus on growth momentum, instead attributing much of the success to broader market conditions. He remarked frankly that the first-half performance had limited correlation with the company's own efforts, being far more dependent on the state of the market.

For any securities firm, this statement is hardly surprising. The securities industry operates in extremely close proximity to the market. Heightened trading activity, expanded margin financing, and rising equity markets can all quickly translate into stronger income statements. Consequently, in a favorable market year, simply comparing which broker achieved faster revenue growth or higher profit margins risks conflating cyclical tailwinds with genuine corporate capability. What truly merits examination is what remains once favorable market conditions fade.

For instance, can a firm identify promising technology companies that are not yet profitable and whose business models remain unproven? Can it continue supporting clients with mergers, debt issuance, and industrial integration after their IPOs are completed? Can it detect accumulating market risks earlier than financial statements might suggest? Moreover, can the years of accumulated experience among research analysts, investment bankers, and traders be transformed into organizational capabilities that can be repeatedly leveraged? Brokerages are offering varied answers to these questions regarding capability building. CITIC Securities emphasizes the integration of investment, investment banking, and research; CSC Financial stresses a collaborative model across four business pillars; while Huatai Securities proposes a dual-engine approach driven by technological empowerment, pursuing an "ALL IN AI" strategy. Though their paths differ, they all converge on a common transformation: securities firms are striving to reduce their heavy reliance on regulatory licenses and single-market conditions, instead anchoring competitiveness in industrial insight, value discovery, risk pricing, and comprehensive service capabilities.

This evolution lends greater concrete meaning to a key concept: what constitutes capital market resilience? Previously, the immediate thought was whether indices could recover after shocks. However, the genuine resilience of a mature capital market cannot be measured solely by index performance. It involves whether capital is willing to assume risk when companies need financing; whether the market can establish relatively effective valuation and pricing when new industries emerge; whether institutions continue providing liquidity during heightened volatility; whether risks can be identified and dispersed promptly once they surface; and whether professional services focused on long-term asset allocation are available to investors entering the market. These elements may not appear in daily price movements, yet they collectively determine how much pressure the market can withstand across economic cycles.

Technology is becoming an increasingly critical variable in developing these capabilities. Previously, discussions of fintech centered on investment, systems, and efficiency. Now, artificial intelligence is genuinely entering core operations such as research, investment banking, trading, and risk control. Huatai Securities CEO Zhou Yi has repeatedly emphasized that fintech is not merely about installing more servers or creating more AI applications; ultimately, it must integrate into the operational framework of financial institutions. The true value of technology lies not just in executing existing tasks faster, but in enabling financial institutions to identify changes earlier, understand industries more deeply, and convert experience held by individuals into organizational capability. During stable market conditions, such capabilities manifest as efficiency; during periods of dramatic market shifts, they may manifest as sound judgment and risk control.

Internationalization follows similar logic. Its significance extends beyond adding another revenue source overseas. Rather, when Chinese enterprises expand abroad, the question becomes whether Chinese financial institutions can continue standing behind them, providing financing, trading, risk management, and global resource allocation services. Even dividend policies should not be assessed solely by the amount distributed in a single year. For financial institutions with pronounced cyclicality, long-term investors should focus on whether returns can remain stable and predictable over time.

Therefore, the notion of "transcending cycles" does not involve discovering a business model immune to cyclical influence. A more realistic approach is to retain something valuable through each economic cycle: converting market-driven client relationships into enduring ones, transforming single projects into long-term partnerships, turning industry research into reusable knowledge, converting risk events into enhanced risk management capabilities, and translating periodic profits into stronger capital positions and shareholder returns. When the next cycle arrives, the starting point will already differ from the previous one. This applies equally to securities firms and to the capital market itself. Genuine resilience does not mean an absence of volatility. Rather, it means that after wave after wave of fluctuations, the market can still more effectively discover value, allocate capital, and manage risk.