GF Securities: The decline in high performance still shows resilience, and the concentration of brokerage firms is further strengthened

The Zhitong Finance App learned that GF Securities released a research report saying that in the first three quarters of 2026, the CR5 share of net profit returned by brokerage firms reached 50%, an increase of 4 pcts over the end of '25. The total investment business revenue of 42 listed brokerage firms in the first three quarters of 2026 was 195.5 billion yuan, +6% over the same period last year. Underestimated and underrated, it has both safety properties and room for improvement. Corporate profit recovery supports the moderate recovery of the capital market, internationalization opens up a second growth curve, and industry regulatory policies continue to be optimized. The Q3 market fluctuated, brokers' profit differentiation increased, and science and innovation attributes increased profit elasticity.

The main views of GF Securities are as follows:

In the third quarter, the capital-based business intensified performance differentiation, and industry concentration further increased

In the first three quarters of '26, 42 listed brokerage firms achieved a total operating income of 497.9 billion yuan, +18.7% year-on-year; realized net profit of 209.2 billion yuan, or +23.8% year-on-year. Q3 achieved total revenue of 134.1 billion yuan in a single quarter, -20% YoY /-37% YoY; realized net profit to mother of 54.1 billion yuan, -17% YoY /-43% YoY. By business, brokerage, investment banking, asset management, net interest, and net investment income in the first three quarters of 2026 were +28%, +26%, +26%, +38%, and +6%, respectively. The industry's annualized ROE for the first three quarters of '26 was 8.3%, +0.8pct year on year. The average operating leverage was 3.5X, +0.05X year over year. CR5 of brokers' net profit in the first three quarters of 2026 reached 50%, an increase of 4 pcts over the end of '25.

Pan-owned businesses are still the winners and losers, and equity OCI continues to increase

The total investment business revenue of 42 listed brokerage firms in the first three quarters of 2026 was 195.5 billion yuan, +6% over the same period last year. (1) The average investment leverage of the 26Q3 industry was 2.1X, the same year on year. The average annual return on investment in the industry was 2%, -2.4 pct year on year; it is estimated that the return on comprehensive investment rose to 2.2% month-on-month, and brokerage firms with superior Tier 1 investment projects showed greater performance flexibility. (2) Structurally, equity OCI continued to increase. At the end of 26Q3, other equity instruments totaled 831.8 billion yuan, an increase of 18% over the beginning of the year, accounting for 10.5% of the financial investment scale, or +0.9 pct. The average of 26Q3 proprietary equity assets and their derivatives/net assets was 26%, compared to the beginning of the year - 0.1 pct, the non-equity average was 229%, and +2 pct compared to the beginning of the year.

Market trading is active, and buyer investment deepens transformation

(1) The average daily stock turnover of the A-share markets in the first three quarters of 2026 was +57%, and the brokerage business revenue of 42 brokerage firms was 142.9 billion yuan, +28% year-on-year. The share of newly issued equity funds in the first three quarters of 2026 was +24%, the share of private equity fund filings in the first 8 months was +61%, and the asset management revenue of 42 brokerage firms was 41.8 billion yuan, +26% year-on-year. (2) Leveraged capital activity declined. The balance of the two loans at the end of 26Q3 was 2.6 trillion yuan, +0.6% compared with the end of '25. The net interest income of 42 brokerage firms was 46.7 billion yuan, +38% year-on-year. At the end of 2026Q3, the total credit assets of brokerage firms were 2.5 trillion yuan, +10% year-on-year. The average debt cost of brokerage firms in the first three quarters of 2026 was 2.15%, -0.03pct year on year.

Investment banking and capitalization are picking up with the market, and the flexibility and differentiation of science and innovation is outstanding

The revenue of 42 listed brokerage investment banks in the first three quarters of 2026 was 31.7 billion yuan, +26% over the same period. The leading equity financing pattern was basically stable. The CR5 share financing scale for the first three quarters of 2026 was 82%, with CITIC, CICIC, CICC, and Cathay Pacific leading the pack. Investment bank capitalization focuses on hard technology, leverages patient capital and industrial pricing capabilities, and the fund-raising side shifts to long-term capital such as national/provincial guidance funds and accelerates concentration on top managers; profits from alternative and private equity firms have generally rebounded, and differences in Tier 1 capital investment have led to significant profit differentiation.

Risk Alerts

The economic downturn exceeded expectations, the strengthening of industry supervision policies, and the company's performance falling short of expectations, etc.