The Zhitong Finance App learned that Dongwu Securities released a research report stating that in 2026H1, the average share base transaction volume was 3.3 trillion yuan, an increase of 99% over the previous year. Domestic and overseas IPOs are picking up, and concentration has further increased; bond issuance has been increasing steadily. The equity market is structured, and the bond market is better than the same period last year. 2026H1 listed brokers' net profit +49% YoY, 2Q net profit +79% YoY, +55% YoY. Currently, brokerage stocks are undervalued, and science and innovation investment+international business is expected to drive the ROE center of the industry to rise, and there is plenty of room for improvement in the future. Considering the active development policy of the industry and the trend of further increasing concentration, the bank believes that the advantages of large brokerage firms are still remarkable.
The main views of Dongwu Securities are as follows:
2026H1 equity market performed well, with a sharp recovery in trading activity
1) The average daily stock base transaction volume of the 2026H1 market was 3.3 trillion yuan, an increase of 99% over the previous year. The average number of new monthly accounts opened by investors in Shanghai in 2026H1 was 3.67 million, an increase of 56% over 2.35 million in the same period last year. 2) As of 2026H1, the financing balance was 2922.8 billion yuan, an increase of 59% over the previous year. The average maintenance guarantee ratio was 288%, an increase of 24 pct over the previous year, and remained at a high level. 3) The scale of domestic and overseas IPO financing has rebounded. A total of 101 IPOs were issued in 2026H1, raising 95.4 billion yuan, an increase of 155% over the previous year. Each company raised an average of 940 million yuan, an increase of 29% over 2025H1's 730 million yuan. In 2026H1, the Hong Kong Stock Exchange issued 84 IPOs, an increase of 95% over the previous year. The capital raised was HK$208.9 billion, an increase of 92% over the previous year. 4) The scale of 2026H1 refinancing contracted year-on-year under a high base. Refinancing raised capital of 358.3 billion yuan, a year-on-year decrease of 51%, including an increase of 322.6 billion yuan, a year-on-year decrease of 54%. 5) There has been a steady increase in the scale of bond issuance. 2026H1, the bond issuance scale in which brokerage firms participated was 8.5 trillion yuan, an increase of 14% over the previous year. 6) The equity market showed a structured market, and the bond market was superior to the same period last year. The main broad-based indices of 26H1A shares generally closed higher. Among them, the GEM index rose far more than other indices; Hong Kong stocks continued to decline due to factors such as record highs in IPO fund-raising and peripherals. 7) Equity fund issuance is picking up. The 2026H1 share+hybrid public fund issuance scale was +60% to 378.2 billion shares, with index and index enhancements accounting for 38%; the share of debt-based issuance was -49% to 127.3 billion shares. The overall share of public funds issued was +21% year-on-year to 637 billion shares.
Net profit of listed brokerage firms returning to mother in the first half of 2026 +49% YoY
The 50 listed brokerage firms or parent companies achieved a total operating income of 389.5 billion yuan in the first half of 2026, an increase of 45% over the previous year, and achieved a total net profit of 167.2 billion yuan, an increase of 49% over the previous year. In March 2025, Guotai Junan absorbed and merged Haitong Securities to generate negative goodwill, bringing in non-operating income of 8.5 billion yuan. After deducting this non-recurring profit and loss, the net profit of listed brokers' returns to mother increased 61% year-on-year. In the second quarter, 50 listed brokerage firms achieved a total net profit of 101.6 billion yuan, up 79% year on year and 55% month on month. The average ROE of the 50 listed brokerage firms in the first half of 2026 was 4.5%, an increase of 1.09 percentage points over the previous year, and the ROE of 8 brokerage firms exceeded 7%; the overall average leverage ratio of 2026H1 was 3.61 times, a slight increase from 3.39 times at the end of 2025. The bank believes that in the context of active trading in the equity market, brokerage and other fee businesses have increased dramatically over the same period last year. At the same time, the equity market showed a structural market. The performance of investment in science and innovation was better than in the same period last year. Combined, the fee rate fell by 8 percentage points, and the brokerage industry's ROE increased significantly.
The fee business has grown almost across the board, and there is great flexibility in self-employment
1) Brokerage commissions have increased significantly. The total brokerage business revenue of listed brokerage firms or parent companies of brokerage firms in the first half of 2026 was 99.9 billion yuan, an increase of 54% over the previous year, which is lower than 99% of the average daily share base transaction growth rate in the market. The bank believes that on the one hand, it is due to an increase in the share of low-rate transactions such as quantification and ETFs, and on the other hand, due to a sharp decline in division commissions after fund fee revisions. 2) Investment bank revenue in the first half of 2026 was +24% year-on-year, mainly benefiting from a sharp increase in domestic and overseas IPOs. In the first half of 2026, 46 listed brokerage firms that disclosed investment banking revenue totaled 19.5 billion yuan, an increase of 24% over the previous year. 3) Asset management revenue grew rapidly, and the scale of asset management rebounded steadily. In the first half of 2026, 46 listed brokerage firms that disclosed asset management revenue totaled 27.7 billion yuan in asset management revenue, an increase of 29% over the previous year. The total asset management scale of 33 listed brokerage firms with disclosure scale and comparable data for the first half of 2026 was 8.2 trillion yuan, an increase of 8% over the beginning of the year. 4) The equity market showed a structured market. The bond market performed better than the same period last year, and the net income from brokers' own investment was +49% year-on-year. In the first half of 2026, 50 listed brokerage firms achieved a total net investment income (including fair value) of 175.4 billion yuan, an increase of 49% over the previous year. The total net investment income for the second quarter was 117 billion yuan, an increase of 75% year on year and 100% month on month. 5) Under the parent company's caliber, the equity scale has increased a lot. At the end of the first half of 2026, the parent companies of 46 listed brokerage firms totaled 5.8 trillion yuan, up 7% year on year; of these, bonds were 5.3 trillion yuan, up 5% year on year, accounting for 90% of the scale; and the equity category was 578.9 billion yuan, up 32% year on year, accounting for 10%. 6) Under the merger approach, brokerage firms continue to add other equity instruments. By the end of the first half of 2026, the 50 listed brokerage firms had a total size of 798.6 billion yuan in other equity instruments, an increase of 10% over the beginning of the year and a tenfold increase over the end of 2021. Among the large brokerage firms, Cathay Pacific Haitong, CITIC Construction Investment, China Merchants Securities, GF Securities, and Huatai Securities increased their allocations more than at the beginning of the year.
Under a high base, the industry's net profit is expected to be +36% YoY in 2026
Based on a neutral assumption, the bank expects the industry's net profit to increase 36% year over year in 2026: brokerage business revenue is expected to increase 43% year over year, investment banking business increase 28% year over year, capital intermediary business revenue increase 35%, asset management business increase 10%, and proprietary operation increase 40% year over year.
The valuation is low, and I am optimistic about future valuation repairs
Currently, the valuation of China's brokerage firms is at a reasonably low level. As of September 1, 2026, the static valuation of the CITIC Securities II Index was 1.27x PB, which is in the 9% quartile since listing, and 20% in the past ten years. Science and innovation investment+international business is expected to drive the ROE center of the industry to rise, and there is plenty of room for improvement in the future. Considering the active development policy of the industry and the trend of further increasing concentration, the bank believes that the advantages of large brokerage firms are still remarkable.
Key recommendations: Cathay Pacific Haitong, China Merchants Securities, Caitong Securities, GF Securities, CITIC Securities, Oriental Wealth, Compass, Xiangcai Co., Ltd.
Risk warning: The equity market fluctuates greatly, macroeconomic recovery falls short of expectations, capital market supervision is getting stricter, and industry competition is intensifying.