On the evening of October 30, Guotai Haitong (GTHT) released its third-quarter report. Like most of its peers, the company delivered strong performance. However, its payable bonds remain disproportionately high—nearly double that of other leading securities firms.

Just days before the earnings release, GTHT announced plans to issue 110 billion yuan in bonds, with 81 billion yuan earmarked for repaying existing debt and 29 billion yuan for working capital.

A puzzling question arises: Why is GTHT seeking to raise another 110 billion yuan when it still has 130 billion yuan in approved but unissued bonds? Recently, a 10 billion yuan subordinated bond approval expired without issuance, and a 20 billion yuan private bond approval is nearing expiry. While the new 110 billion yuan bond issuance is likely to be approved, concerns linger over whether GTHT can manage its nearly 700 billion yuan in short-term interest-bearing debt (maturing within a year) if the issuance falters. Moreover, as the yield spread between corporate credit bonds and government bonds narrows, the sustainability of GTHT’s "rollover debt" model remains uncertain.

**130 Billion Yuan Unissued, Yet Another 110 Billion Yuan Planned: Payable Bonds Far Exceed Peers** The Shanghai Stock Exchange recently disclosed GTHT’s plan to issue 110 billion yuan in bonds, including up to 80 billion yuan in long-term corporate bonds and 30 billion yuan in short-term bonds.

The proceeds are primarily intended for debt repayment (73.6%) and working capital (26.4%). Notably, as of September 25, 2025, GTHT still has 130 billion yuan in approved but unissued bonds, including a 20 billion yuan private bond registered in February 2025 and a 30 billion yuan subordinated bond registered in September 2025.

**Why the Urgency for More Fundraising?** With 130 billion yuan in unissued bonds—including 30 billion yuan registered in September 2025 and 60 billion yuan in April 2025—GTHT’s aggressive fundraising raises eyebrows. A key driver is its massive interest-bearing debt burden, particularly short-term obligations. As of June 2025, GTHT’s interest-bearing debt stood at 896.99 billion yuan, with 696.2 billion yuan (77.62%) maturing within a year.

By Q3 2025, GTHT’s payable bonds totaled 302.442 billion yuan, far surpassing its peers. For instance, Huatai Securities held 159.765 billion yuan, while industry leader CITIC Securities reported only 132.765 billion yuan.

**Pressure on the "Rollover Debt" Model: Subordinated and Private Bonds at Risk** GTHT’s payable bonds accounted for 89.24% of its net assets (338.917 billion yuan) by Q3 2025. While regulatory changes no longer cap bond issuance at 40% of net assets, concerns persist over its debt-heavy structure.

The company’s 110 billion yuan bond issuance is likely to be approved, but challenges remain. A 10 billion yuan subordinated bond approved in October 2023 expired unissued by September 2025, and a 20 billion yuan private bond approval is set to expire in February 2026.

GTHT’s reliance on bond issuance for refinancing is critical, especially given its 700 billion yuan in short-term debt. However, the narrowing yield spread between corporate bonds and government bonds (currently just 0.2%) may deter institutional investors, who might prefer safer government bonds.

**Lagging Behind CITIC Securities in Key Segments** Despite strong earnings growth—Q3 2025 revenue surged 101.6% YoY to 45.892 billion yuan, with net profit up 131.8% to 22.074 billion yuan—GTHT’s performance was buoyed by its merger with Haitong Securities and non-recurring gains, including 8 billion yuan from negative goodwill.

Comparatively, CITIC Securities outperformed GTHT in revenue (55.815 billion yuan), net profit (23.159 billion yuan), and core businesses like investment banking, asset management, and investment income.

While GTHT’s net assets and capital exceed CITIC’s, its operational gaps in key segments highlight competitive challenges ahead.