Bullish on the upward trend in industry prosperity.
Over the weekend, financial circles were abuzz with news of policy bonuses.
CSRC Chairman Wu Qing delivered a key signal, relaxing leverage caps for high-quality brokerages.
This is a clear signal from regulators to activate the capital market.
Driven by this positive development, the brokerage sectors in both Hong Kong and mainland A-share markets surged collectively.
In the A-share market, Xingye Securities hit the daily price limit, Northeast Securities rose by 5.2%, Huatai Securities and Guotai Haitong Securities gained over 4%, while Huaan Securities, CITIC Securities, and Guosen Securities increased by more than 3%.
In the Hong Kong stock market, Hongye Futures surged over 7%, Huatai Securities climbed more than 6%, CITIC Securities and CITIC Construction Investment Securities rose over 4%, while China Merchants Securities, China Galaxy Securities, and GF Securities also followed with gains.
An epic-level positive catalyst
Last weekend, the securities sector received significant favorable news.
At the eighth membership meeting of the Securities Association of China, CSRC Chairman Wu Qing stated that high-quality institutions would be given appropriate regulatory easing, moderately expanding capital space and loosening leverage restrictions.
For small and medium-sized brokerages and foreign brokerages, differentiated supervision will be explored in terms of classification evaluations and business access. For a few problematic brokerages, stricter regulation will be enforced according to law, and illegal activities will be severely punished.
Over the past four years, the total assets of 107 securities firms reached 14.5 trillion yuan, with net assets of 3.3 trillion yuan, increasing by over 60% and 40%, respectively.
In terms of serving the real economy, the industry has facilitated the listing of nearly 1,200 technology innovation enterprises and provided domestic equity and debt financing services for various companies exceeding 51 trillion yuan. The scale of underwriting products such as sci-tech innovation bonds and green bonds surpassed 2.5 trillion yuan.
Wu Qing emphasized that the securities industry needs to further strengthen its commitment to four major missions: serving the real economy and new quality productivity, optimizing household asset allocation, building a strong financial sector, and promoting high-level institutional opening-up.
Why is this an 'epic-level' signal?
One reason lies in the expansion of leverage limits.
The current margin trading and short selling balance has reached 2.5 trillion yuan, hitting a new historical high, while the peak in 2015 was only 2.26 trillion yuan. If the leverage ratio increases from the current 1:1 to 1.2:1 or higher, brokers will be able to drive larger-scale margin trading businesses, directly boosting profits.
The second reason is the actual implementation of 'anti-internal competition.'
The so-called 'anti-internal competition' refers to halting the vicious competition in commission rates. If the commission rate rebounds from 0.1% to 0.15%, annual industry revenue will surge by tens of billions of yuan.
This aligns with the logic of the 'leverage-driven bull market' in 2015, but the current market is more rational, valuations are lower, and safety margins have significantly improved.
Industry insiders pointed out that, given the current market environment, this round of policies is expected to gradually and structurally boost the stock market from both sentiment and liquidity perspectives.
Bullish on the upward trend in industry prosperity.
In the first three quarters of this year, driven by both the recovery of the capital market and the release of policy dividends, the securities sector delivered better-than-expected results.
According to Wind statistics, in the first three quarters, the total revenue of 42 listed securities firms reached RMB 419.56 billion, a year-on-year increase of 42.55%; net profit attributable to shareholders was RMB 169.049 billion, a year-on-year increase of 62.38%.
Among them, 11 securities firms reported revenue exceeding RMB 10 billion, with CITIC Securities leading the pack with an operating income of RMB 55.8 billion.
Five firms reported net profits surpassing RMB 10 billion, including CITIC Securities and Guotai Haitong, both exceeding RMB 20 billion.
Notably, following mergers and reorganizations, Guolian Minsheng and Guotai Haitong have shown rapid growth in both revenue and net profit.
Specifically, Guolian Minsheng’s revenue increased by 201.17% year-on-year, while Guotai Haitong's grew by 101.60%.
In terms of net capital scale, as of the end of September this year, 14 securities firms had net capital exceeding RMB 30 billion.
Guotai Haitong, CITIC Securities, and China Galaxy each reported net capital exceeding RMB 100 billion at RMB 186.737 billion, RMB 154.150 billion, and RMB 115.955 billion, respectively.
The excellent performance of securities firms can be attributed to two main factors.
On one hand, the active trading in the A-share market and strengthened market conditions contributed to improved performance across related businesses.
On the other hand, a new accounting standard was implemented this year, changing the revenue recognition method for standard warehouse receipt transactions from the gross method to the net method, thereby impacting the financial statements.
Guangfa Securities noted that market activity rebounded in 2025, with high growth in brokerage and margin financing, and differentiated contributions from non-directional proprietary trading. Although brokerages achieved robust earnings growth, their valuations remained stagnant. Entering 2026, an improved outlook for a slow bull market, coupled with favorable policies, is expected to drive continued increases in the industry's ROE, enhancing its alpha potential and catalyzing institutional inflows. With sustained upward momentum in sector sentiment, the anticipated 'spring rally' may open a window for valuation recovery. It is recommended to focus on brokers benefiting from optimized competitive dynamics, as well as those poised to gain from the acceleration of comprehensive wealth management recovery and investment banking-driven capital elasticity.
