On October 31, listed brokerages completed their third-quarter earnings disclosures, revealing an overall stellar performance for the industry.

Buoyed by favorable market conditions, A-listed brokerages reported impressive earnings, with leading firms showing significant growth across multiple business segments. Notably, Guotai Haitong, a top brokerage that recently completed a merger, saw its revenue surge 101.60% year-on-year, while net profit attributable to shareholders soared 131.80%, reflecting substantial post-merger gains.

Other brokerages that underwent mergers also reported strong growth. For instance, Guolian Minsheng posted multiple-fold increases in revenue and net profit for the first three quarters. Brokerage businesses, in particular, expanded notably, with Guolian Minsheng, Guotai Haitong, and Guosen Securities leading the pack in terms of growth.

**CITIC SEC Tops Profitability, Guotai Haitong Follows Closely** CITIC SEC reclaimed its position as the industry leader, reporting a net profit of 23.159 billion yuan for the first three quarters, the highest among listed brokerages. However, Guotai Haitong, bolstered by its merger, trailed closely with a gap of just around 1 billion yuan.

During the mid-year reporting period, Guotai Haitong had briefly surpassed CITIC SEC in net profit, largely due to a one-time boost from negative goodwill of 9 billion yuan generated by the merger. By the third quarter, CITIC SEC’s earnings rebounded sharply, with revenue rising 55.71% year-on-year to 22.775 billion yuan and net profit climbing 51.54% to 9.44 billion yuan.

Guotai Haitong maintained robust growth, with third-quarter revenue up 136% year-on-year to 22.019 billion yuan and net profit rising 40.60% to 6.337 billion yuan. For the first three quarters, its revenue and net profit both doubled compared to pre-merger levels.

**Industry-Wide Profitability** All A-share listed brokerages turned a profit in the first three quarters, with five firms—CITIC SEC, Guotai Haitong, Huatai Securities, China Galaxy, and GF Securities—exceeding 10 billion yuan in net profit. In contrast, only CITIC SEC and Guotai Haitong achieved this milestone in the same period last year.

Eight brokerages reported net profits below 500 million yuan, with two under 200 million yuan. Last year, two brokerages posted losses, including Tianfeng Securities, which lost over 500 million yuan in the first three quarters of 2024.

**Merged Brokerages Shine** Guolian Minsheng, another beneficiary of mergers, saw explosive growth, with revenue up 201.17% year-on-year to 6.038 billion yuan and net profit soaring 345.30% to 1.763 billion yuan. The firm attributed this to strong performance in securities investment, brokerage, and investment banking.

Brokerage fee income was a major growth driver, with CITIC SEC and Guotai Haitong each surpassing 10 billion yuan in net brokerage revenue. Guolian Minsheng, Guotai Haitong, and Guosen Securities all doubled their brokerage income year-on-year.

**Market Cap Growth Lags** Despite strong earnings, market capitalization growth remains subdued. As of October 31, CITIC SEC and East Money led with market caps of 435.5 billion yuan and 405.1 billion yuan, respectively, while Guotai Haitong followed in the 300-billion-yuan tier. Eleven brokerages now boast market caps exceeding 100 billion yuan.

In comparison, no brokerage had surpassed 400 billion yuan in market cap in the same period last year, with CITIC SEC at 394.8 billion yuan and East Money at 366.1 billion yuan. While Guotai Haitong’s merger boosted its valuation, other firms like China Securities Co. saw only marginal increases.