The batch of mid-term reports is expected to increase, and the ranking of securities firms has ignited the "smoke of war" again

The "smoke" of competition in the securities industry rankings has become vividly "ignited" following the release of mid-year performance forecasts.

According to Wind statistics, as of July 14, at least 30 listed securities firms have announced performance increases, and according to relevant regulations, only companies with a year-on-year net profit growth of over 50% are required to issue performance increase announcements. This indicates a jubilant atmosphere of growth within the industry.

Among them, Guolian Minsheng Securities and Huaxi Securities are expected to see their net profits increase by over 1000% year-on-year, placing them among the top securities firms in terms of mid-year growth rates.

Larger leading institutions are also experiencing performance boosts. Among the "Three Middle and One Hu" group, CSC and CICC have announced net profit growth exceeding 50% year-on-year. Galaxy Securities also rushed to announce an expected growth rate of 45% to 55% on July 15.

Even more intriguingly, Guotai Junan's performance forecast indicates that the company expects to achieve a year-on-year net profit growth of 205% to 218% for the first half of 2025, primarily due to contributions from "negative goodwill" resulting from mergers and significant growth in wealth management, institutional, and trading revenues.

This has kept the suspense over the top revenue earner of the year alive.

At least until 2025, the title of "king" of the securities industry remains "enigmatic."

Some institutions "tenfold" in half a year

To see how strong the recovery of the securities industry will be in 2025, let's look at the net profit growth rates of the following two institutions that have "multiplied tenfold."

The announcement shows that Guolian Minsheng Securities expects to achieve a net profit attributable to the parent company of RMB 1.129 billion for the first half of 2025, which represents an approximate year-on-year growth of 1183% compared to the same period last year (statutory disclosure data). The company also expects a year-on-year growth of approximately 1345% in net profit after deducting non-recurring items, which is even more astonishing.

Guolian Minsheng Securities stated that the significant growth in performance is attributed to: during the reporting period, the company actively seized market opportunities, explored the deep integration of technology, finance, and industry, and enhanced its comprehensive financial service capabilities with "collaborative empowerment" and "internal growth" as the main lines; orderly advancing the integration work with Minsheng Securities and incorporating it into the scope of financial statement consolidation, with significant growth in the company's securities investment, wealth management, investment banking, and other business lines; at the same time, there is also the factor of a relatively low comparison base from the same period last year.

Huaxi Securities' announcement indicates that the net profit attributable to shareholders of the listed company is expected to be between RMB 445 million and RMB 575 million, representing a year-on-year growth of 1025.19% to 1353.90%.

Huaxi Securities stated that in the first half of 2025, the company continued to improve its business organization system and business model in accordance with a differentiated development direction, strengthened operational management, actively seized market opportunities, reinforced compliance risk control, effectively improved asset quality, and promoted a year-on-year increase in operating income and net profit attributable to shareholders of the listed company.

The high growth in Huaxi Securities' performance this year also has a background, as the company's net profit had previously decreased by over 92% in the same period last year.

The "elephant" is also dancing

Not only are small and medium-sized institutions expecting growth, but the performance of the "elephants" is also dancing. Among the typical leading firms in the industry, "Three Zhong, One Hua," both CICC and CSC have announced significant net profit growth.

CSC announced that, according to preliminary calculations by the finance department, it is expected that the net profit attributable to the parent company's shareholders for the first half of 2025 will be between RMB 4.430 billion and RMB 4.573 billion, an increase of RMB 1.572 billion to RMB 1.715 billion compared to the same period last year, a year-on-year growth of 55% to 60%.

The announcement also indicated that the main reasons for the performance growth during this period were significant year-on-year increases in revenue from proprietary trading, brokerage, and investment banking businesses.

CICC expects that the net profit attributable to the parent company's shareholders for the first half of 2025 will be between RMB 3.453 billion and RMB 3.966 billion, an increase of RMB 1.225 billion to RMB 1.738 billion compared to the same period last year, a year-on-year increase of 55% to 78%.

The main reason for the substantial growth is the year-on-year increase in revenue from investment banking, equity business, and wealth management segments in the first half of the year, contributing to CICC's year-on-year performance growth.

Top Brokerage Firms' Revenue Achievements as "Highlights"

As of now, among the brokerages that have disclosed expected growth, the highest forecast for net profit attributable to the parent company is from Guotai Junan Securities.

According to preliminary calculations by Guotai Junan Securities, it is expected that the company will achieve a net profit attributable to the parent company's owners of RMB 15.283 billion to RMB 15.957 billion in the first half of 2025, an increase of RMB 10.267 billion to RMB 10.941 billion compared to the same period last year (RMB 5.016 billion), representing a year-on-year increase of 205% to 218%.

Guotai Junan Securities stated that in the first half of 2025, the company seized market opportunities and comprehensively promoted the construction of three major customer service systems: retail, institutional, and corporate, steadily developing various businesses and achieving good operating results. At the same time, the company actively promoted the work related to the share swap merger with Haitong Securities, facilitating comprehensive integration and continuously enhancing core capabilities, accelerating its progress towards becoming a world-class investment bank.

During the reporting period, the main reason for the growth in net profit attributable to the parent company's owners, excluding non-recurring gains and losses, was the significant year-on-year increase in revenue from wealth management, institutional, and trading businesses. The main reason for the growth in net profit attributable to the parent company's owners was the negative goodwill generated from this merger being included in non-operating income.

However, the growth rate performance of the long-standing first-ranked CITIC Securities and second-ranked Huatai Securities in the brokerage sector has not yet been announced for this year's interim report, and the suspense over their ranking competition with Guotai Junan is expected to continue.

In the previous 2024 annual report, the net profit differences among the three institutions quickly narrowed, and whether Guotai Junan Securities can achieve an "upset" this time may be the most "captivating" topic in this round of interim reports.

Frequent Positive Forecasts

The performance forecasts of listed securities firms reveal several important trends in the industry.

First, after experiencing a relative low point in 2024, the profitability momentum of the mainland securities industry is clearly recovering. In this semi-annual report forecast, many institutions mentioned growth trends in investment banking, brokerage (wealth management), and proprietary trading businesses.

Second, an increasing number of institutions are completing or contemplating "mergers," which is greatly changing the industry landscape. Guolian Minsheng and Guotai Junan, which completed mergers at the end of last year and the beginning of this year, have become the main forces behind the recent ranking "shocks." Meanwhile, the rumored "CP" among CITIC Securities and CSC, as well as Industrial Securities and Huafu Securities, has not shown further signs of revelation.

Third, more and more securities firms have replaced their management teams in the first half of the year, and the ability to "integrate" human resources has become an important competitive lever for the future securities industry. Guotai Junan and Guolian Minsheng, which have substantially completed mergers, have also made adjustments to their personnel arrangements.

Additionally, in terms of absolute profit amounts, the financial strength of securities firms is rapidly "recovering." As of now, statistics show that Guotai Junan temporarily stands out with a net profit expected to be at least 15.283 billion yuan. Furthermore, Guosen Securities, CSC, and Shenwan Hongyuan have forecasted net profits (lower limit) exceeding 4 billion yuan, while CICC and Dongfang Securities have net profits (lower limit) also exceeding 3 billion yuan.

In terms of year-on-year growth, apart from Guolian Minsheng and Huaxi Securities, whose net profits are expected to grow by at least 1000% year-on-year. Guosheng Financial Holdings, Haitou Co., Northeast Securities, and Guotai Junan have lower limits for year-on-year growth exceeding 200%. Jinlong Co., Guohai Securities, Guojin Securities, Hualin Securities, Changjiang Securities, and Tianfeng Securities have lower limits for year-on-year growth exceeding 100%.

In addition, Huazheng Securities and Guoyuan Securities announced performance reports, with both firms' net profits attributable to shareholders growing by over 40% year-on-year.

It must be said that the performance of securities companies in the first half of this year can be described as "happy" institutions, with similar reasons; the growth figures vary