Recent weeks have seen a wave of earnings conferences from major securities firms. As of September 10th, 17 listed brokerages had already hosted their interim results meetings, fielding investor questions on earnings momentum, sustainability, and market capitalization management strategies.
Multiple forces have fueled the sector's impressive performance during the first half of the year. The 43 A-share listed brokerages collectively posted a total operating revenue of 364.71 billion yuan, marking a substantial 45.87% year-on-year increase. Their combined net profit attributable to shareholders reached 155.37 billion yuan, surging 49.01% from the same period last year, delivering a remarkable financial scorecard. Investors are keenly focused on what has powered this growth and whether it can be sustained. In response, many brokerages attribute the robust results to favorable market conditions and a surge in trading activity, while also highlighting the significant incremental contributions from tech investment and overseas business operations.
In the realm of science and technology investment, Guotai Haitong Securities Chairman Zhu Jian stated that the firm has actively integrated into the latest wave of technological revolution and industrial transformation, driving rapid growth in its investment banking, institutional trading, and investment management revenues. During the first six months, the company added over 4 billion yuan in new investments targeting hard-tech projects, built a cumulative science-and-technology themed fund matrix exceeding 80 billion yuan, and expanded its total follow-on investments on the STAR Market to nearly 7 billion yuan. Moving forward, Guotai Haitong Securities plans to enhance its integrated "three-investment linkage" operations to offer comprehensive, end-to-end services for tech enterprises.
Overseas business has emerged as another powerful engine for earnings growth. Wind data reveals that six listed brokerages each generated over 1 billion yuan in offshore business revenue during the first half. For CITIC Securities and CICC, overseas revenue accounted for 23.72% and 30.91% of their total income, respectively. Meanwhile, Huatai Securities, GF Securities, and China Merchants Securities all reported year-on-year growth exceeding 80% in their overseas operations. CITIC Securities noted that its overseas business achieved a gross margin of 74.46%, surpassing domestic performance in both revenue growth and profitability. The company intends to intensify resource allocation toward its international arm, deepen its business footprint, build a world-class platform and brand, and expand into new products and markets, seeking breakthroughs across broader geographies like the Middle East and Europe.
Zhang Cuixia, Chief Investment Advisor at Jufeng Investment, observed that the securities industry is highly cyclical. While the strong performance is partly attributable to favorable market conditions, tech investment and overseas ventures are becoming new growth poles that provide structural support to overall revenues. By focusing on these areas, brokerages can shift their income structures away from simple reliance on market turnover toward a more diversified model, fostering organic growth capabilities independent of one-sided market trends and enhancing the durability and stability of their earnings.
Valuation headroom is also drawing attention. Despite the stellar earnings, the brokerage sector has fallen 8.94% so far this year as of September 10th, with the average price-to-book ratio for the 43 listed firms hovering around 1.4 times. To better align share prices with intrinsic value, brokerages are actively pursuing market cap management through regular dividends, share buybacks, and enhanced investor relations and disclosure practices. On the dividend front, 27 listed brokerages have unveiled interim payout plans, totaling 26.349 billion yuan, with several setting new record highs for the period. CITIC Securities is set to distribute 4.27 yuan per 10 shares for its third consecutive mid-year cash dividend, totaling 6.672 billion yuan, a 55.23% increase from last year. In terms of buybacks, five listed brokerages have repurchased a combined 130 million shares worth 1.153 billion yuan this year.
Cao Zhe, Chief Investment Officer at Aiwen Zhilue, pointed out that brokerages' share prices are influenced by industry trends, capital preferences, and operational performance. The current valuation contrast with H1 earnings highlights market caution, reflecting concerns over cyclicality and sustainability. Persistent dividend payouts could attract more long-term investors and strengthen the foundation for valuation recovery. As fundamentals and business quality improve, the sector is expected to see further valuation repair.
Lu Hao, Co-Lead Analyst for Non-Bank Finance at CITIC Securities, believes the industry can sustain earnings elasticity in H2, supported by elevated market turnover and steady profit contributions from alternative investment subsidiaries. With the sector's PB at the 18.9th percentile since 2016, there is ample room for re-rating. Investors are advised to focus on project pipelines, earnings delivery capabilities, international expansion strategies, and M&A activity when making allocation decisions.