Major segmentation in the securities industry: mergers to dominate, reshuffling of leading players

Ask AI · How can merged brokerages achieve a performance leap through synergy effects?

Currently, 25 listed brokerages have disclosed their 2025 annual reports, with net profits attributable to shareholders all showing positive growth, but performance differentiation is significant.

The annual reports of listed brokerages for 2025 are being released sequentially. As of the evening of April 1, all 25 brokerages that have announced their results have achieved positive growth in net profit attributable to shareholders, but the pattern of performance divergence is prominent: among the leading firms, after the merger of Guotai and Haitong, several businesses have surpassed CITIC; Huatai Securities, however, faced declines in asset management and shrinking proprietary trading; among small and medium-sized brokerages, Guolian Minsheng, after merging, became the biggest dark horse, while some institutions suffered losses in proprietary trading and were penalized in investment banking, dragging down performance.

Interviewees analyze that the uneven performance across core business lines such as investment banking, asset management, and proprietary trading is an inevitable result of the industry’s transition from channel-driven benefits to capability-driven development. Different-sized brokerages need to anchor their development paths according to their resource endowments.

Net profit attributable to shareholders generally increases

As of the evening of April 1, 25 listed brokerages disclosed their 2025 annual reports, with net profits attributable to shareholders all showing positive growth, but performance differentiation is significant.

The gap among top-tier firms is widening. Nine brokerages including CITIC Construction Investment each had revenue exceeding 20 billion yuan, Huatai Securities and GF Securities exceeded 30 billion yuan, with CITIC Securities leading at 74.85B yuan; six brokerages such as China Merchants Securities had net profits attributable to shareholders over 10 billion yuan, with CITIC Securities at 30.08B yuan in first place, Guotai Haitong close behind at 27.81B yuan. The growth rates are more varied: Guotai Haitong’s performance post-merger was impressive, with net profit attributable to shareholders soaring nearly 114%, significantly narrowing the gap with the first-place CITIC Securities; Huatai Securities, the “old third,” showed a “too low-key” growth, with total revenue and net profit increasing by nearly 7%, but asset management net income fell by over 50%, and proprietary trading net income also declined.

Compared to top-tier firms, small and medium-sized brokerages have much smaller performance scales, with nine institutions like Cinda Securities having net profits attributable to shareholders under 2 billion yuan. However, some institutions showed remarkable growth: Zhongyuan Securities increased 85.4% year-on-year to 456 million yuan; Guohai Securities rose 79.57% to 769 million yuan; Founder Securities increased 79.85% to 3.97 billion yuan; Shenwan Hongyuan surged 82.46% to 9.51B yuan.

Some brokerages saw revenue decline but net profit grow. Western Securities, affected by a decrease in revenue and costs from commodities trading, saw total revenue drop 10.84% to 5.99B yuan, but net profit attributable to shareholders increased 24.97% to 1.75B yuan.

Zhou Yuan, director of the State Capital Operation Research Center at Shanghai National Accounting Institute, told the “International Financial News” that the overall improvement in brokerage performance in 2025 is fundamentally driven by market recovery. A bull market and increased market activity boosted the recovery of brokerage and proprietary trading businesses, becoming the main source of profit rebound.

Structural differentiation is obvious

The “weather-dependent” characteristic of brokerage business is clear, with businesses like brokerage and proprietary trading especially affected by A-share market trends, while investment banking shrinks significantly under tightened policies on IPOs and refinancing.

Brokerage business generally rose but with large disparities. All 25 disclosed brokerages achieved positive growth in this segment, with Guotai Haitong and CITIC Securities’ net income at 15.14B yuan and 14.75B yuan respectively, but many brokerages like Dongxing Securities had net income under 1 billion yuan.

Investment banking saw mixed changes. Most institutions reported increased net income year-on-year, but several declined, further widening the income gap.

Asset management is concentrated among top firms. CITIC Securities’ net income from this segment reached 12.18B yuan, but most institutions had less than 500 million yuan.

“There is a clear structural differentiation among institutions, with large gaps in performance across core business lines like investment banking, asset management, and proprietary trading. This is an inevitable result of the industry’s shift from channel benefits to capability-driven development,” said Liu Yan, chairman of Anjue Asset. The differentiation in investment banking stems from the “Matthew effect” strengthening among top institutions, which leverage full-chain service capabilities and compliance advantages to monopolize core projects. Smaller institutions lacking distinctive layouts and business synergy face ongoing share erosion; in asset management, the key lies in active management ability—whether they can adapt to market trends and connect with wealth management—directly affecting scale and income stability; proprietary trading differentiation comes from teams’ investment strategies, risk hedging, and research systems, with top institutions often diversifying allocations and reducing cyclical volatility.

Gong Tao, chairman of Shenzhen CICC Huachuang Fund, said that currently, domestic brokerages are generally homogeneous, with differences mainly in business team capabilities and overall strength. When markets are favorable, some institutions’ businesses decline against the trend, often due to team turnover or violations, such as Zhongyuan Securities’ investment banking penalty in October 2024, which suspended operations until September 2025. He believes that during good market conditions, brokerages should focus on compliance when expanding aggressively; during downturns, they should focus more on cultivating excellent teams.

Zhou Yuan believes that the differentiation trend within the brokerage industry will intensify, with firms that have strong policy adaptability and core competitiveness achieving better performance; those overly dependent on market conditions and with weak long-term management may see performance pressure even in bull markets.

Differentiated competition

Brokerage performance is heavily influenced by the market, with the saying “success in proprietary trading, failure in proprietary trading.” Some institutions declined against the trend, widening gaps, reflecting the differentiation in research and trading capabilities.

The 2025 annual report shows Guohai Securities’ proprietary trading net income fell over 30% to 666 million yuan; Huatai Securities, Everbright Securities, Western Securities, and Hualin Securities also saw slight declines. Moreover, the gap in proprietary trading net income among large, medium, and small institutions is stark: CITIC Securities leads with 38.6B yuan, while eight institutions have less than 2B yuan.

“The divergence among brokerages stems from differences in business structure and strategic capabilities,” said Liu Youhua, director of Wealth Research at PaiPaiWang. Different types of brokerages should develop along distinct paths: top-tier firms should leverage full licensing advantages and pursue comprehensive and international strategies; mid-sized firms need to address weaknesses to become regional leaders; small and medium firms should deepen niche areas and develop distinctive branding.

Zhou Yuan suggests that large and medium-sized brokerages should continue strengthening diversified business structures and research systems, enhancing cross-cycle allocation and profit switching; small brokerages should focus on niche fields, building competitive advantages in specific businesses to maintain steady performance across different market environments.

“The performance of various brokerages fundamentally depends on strategic positioning, core capabilities, business synergy, and compliance and risk control. Institutions that lose focus on strategy, cling to channel thinking, or operate single points of business are likely to be marginalized in industry differentiation,” Liu Yan advised. Different-sized brokerages should anchor their development paths according to their resource endowments: top firms should consolidate comprehensive advantages and reduce cyclicality; mid-sized firms should focus on niche tracks to build differentiation; small firms should pursue boutique and regional strategies to break through. Regardless of market fluctuations, brokerages must abandon the “rely on the market” mindset—seizing benefits during good times while preparing counter-cyclically; during downturns, they should safeguard bottom lines and refine internal strengths, achieving steady development through capability building.

Performance surge after mergers

The performance of Guotai Haitong and Guolian Minsheng, after their mergers, has attracted attention. Guolian Minsheng achieved revenue of 7.67B yuan in 2025, up 185.99% year-on-year; net profit attributable to shareholders was 2.01B yuan, up 405.49%. Brokerage net income increased 193% to 2.1 billion yuan; investment banking net income soared 165% to 898 million yuan; proprietary trading net income jumped 254% to 3.46B yuan. Guotai Haitong also performed strongly, with brokerage and credit net income at 15.14B yuan and 8.28B yuan, ranking first in the industry; proprietary net income increased 72% to 25.4 billion yuan, second only to CITIC Securities’ 38.6 billion yuan.

“Post-merger, the significant growth in performance mainly results from scale effects, synergy effects, and resource integration,” Zhou Yuan analyzed. Through mergers, institutions can optimize client resources and channel networks, enhance capital strength and license utilization, and amplify synergies across brokerage, investment banking, and proprietary trading, leading to a more balanced income structure and improved risk resistance. Recent successful cases show that mergers are not just about size but focus on complementary businesses and strategic synergy—optimizing resource allocation and integration to enhance comprehensive financial service advantages, thereby strengthening long-term competitiveness.

However, post-merger challenges also exist. Gong Tao noted that while mergers are beneficial—expanding scale and risk resilience—they often lead to redundancies and inefficiencies, with “big company syndrome” emerging. Management team integration is critical. Mergers should not simply combine two sets of accounts but focus on team integration and leveraging strengths to truly achieve “1+1>2.”

“Performance growth after mergers indicates that strategic mergers can indeed bring about business synergy and competitive advantages. It’s not just about scale; it’s about integrating clients, channels, and talent to quickly fill gaps and reshape competitiveness,” Liu Youhua said. The key is whether merged firms can go beyond physical integration to achieve deep cultural, talent, and system integration. Only by transforming scale advantages into sustainable profitability and robust risk management can they develop stronger competitiveness in new tracks like wealth management and international business, thus optimizing the industry landscape.

“The explosive growth of Guotai Haitong and Guolian Minsheng after their mergers is not just about simple report consolidation but a successful practice of market-oriented M&A moving from ‘physical merger’ to ‘chemical fusion’ in the securities industry. It confirms that M&A is a core path for brokerages to break through development bottlenecks and achieve capability leaps, providing a clear model for industry consolidation,” Liu Yan concluded. He believes that the core of their performance growth lies in the realization of scale effects through strategic complementarity and the release of characteristic business synergies.

Reporter Zhu Denghua

Copyeditor Chen Sai