Annual Report Disclosure Peak! Will Broker Stocks See a Recovery Rally with Strong Earnings Growth Coupled with Share Buyback Support?

Why Do Brokerage Stocks with Strong Earnings Still Underperform?

21st Century Business Herald Reporter Sun Yongle

As A-share 2025 annual reports continue to be disclosed, the brokerage sector is expected to see multiple positive catalysts.

On the evening of March 19, Eastmoney announced its first “report card,” marking the start of the listed brokerages’ 2025 annual report disclosure window. A review by the 21st Century Business Herald found that leading brokerages will release their results densely from late March to the end of April, with the industry showing a high-growth trend:

On one hand, more than half of the listed brokerages that have disclosed earnings forecasts expect year-over-year net profit growth of over 50%, indicating a comprehensive recovery in industry profitability; on the other hand, since the release of the “New National Nine Rules,” many brokerages have launched stock buyback plans, using real cash to repurchase and cancel shares, continuously boosting investor confidence.

Sell-side research analysts generally believe that current valuation levels and institutional holdings in the brokerage sector are at historic lows. With high earnings growth, policy catalysts, and capital inflows resonating, valuation recovery logic is clear, making it a strategic allocation opportunity.

Earnings Window Opens

The disclosure window for 2025 annual reports of A-share listed brokerages has begun, showing a clear pattern of “leading firms first, phased progress.” Disclosure dates are spread from March 20 to April 30, with three concentrated phases progressing in an orderly manner.

According to the 21st Century Business Herald, on the evening of March 19, the internet brokerage giant—Eastmoney, known as the “brokerage king”—officially kicked off the disclosure of its 2025 annual report; the next day, Chuangye Securities and Xiangcai Securities announced their results successively.

In late March, leading brokerages followed closely with dense disclosures, including CITIC Securities, Guotai Haitong, CICC, Huatai Securities, CITIC Construction Investment, and GF Securities, among others, releasing their annual reports.

By April, the annual report disclosures are winding down, mainly among small- and medium-sized brokerages, with a peak from April 25 to 30, when several firms such as Dongwu Securities, Tianfeng Securities, and Bank of China Securities completed disclosures simultaneously.

Notably, some top brokerages are also completing regulatory reporting alongside their annual disclosures. Recently, consolidated supervision of brokerages has officially moved from the institutional development stage into substantive implementation. Six leading brokerages are required to submit their 2025 consolidated annual reports by April 30.

The 21st Century Business Herald learned from industry insiders that the China Securities Industry Association recently issued a notice to initiate the first batch of transitional period brokerage consolidated management reports and risk control indicator submissions. The six pilot brokerages—CITIC Securities, Guotai Haitong, CITIC Construction Investment, CICC, Huatai Securities, and China Merchants Securities—are the first to submit.

According to the requirements, these brokerages must submit their 2025 consolidated management annual report by April 30, and their 2026 Q1 consolidated risk control indicators by April 29; subsequent quarterly submissions of risk indicators will be made within 20 trading days after each quarter-end. The association will implement differentiated arrangements, with non-pilot brokerages steadily preparing, and specific submission dates to be announced separately. The full implementation of consolidated supervision is progressing in an orderly manner.

As an important institutional arrangement for industry risk management, consolidated supervision of brokerages has undergone years of preparation and pilot testing. In 2020, the CSRC approved six brokerages to pilot consolidated supervision, creating replicable and scalable practical experience for the industry; in 2025, the China Securities Industry Association officially released the “Guidelines for the Management of Securities Company Consolidation (Trial),” clarifying the scope, relevant element management requirements, and transitional arrangements.

It is foreseeable that the brokerage sector will soon experience intensive earnings catalysts. During the pre-disclosure period of the 2025 annual reports, a large number of listed brokerages have already reported good news.

Data from Tonghuashun iFinD shows that, as of now, 26 listed brokerages (including parent companies) have disclosed their 2025 earnings forecasts or interim reports, with a total net profit of 128.65 billion yuan, averaging 4.948 billion yuan per firm, representing a substantial year-over-year increase of 65.16%, indicating a strong earnings recovery momentum.

Among them, four firms expect net profit growth between 10% and 50%, 14 between 50% and 100%, and 8 over 100%. Some brokerages that have undergone major restructuring (mergers, acquisitions, change of actual controllers) show particularly high earnings elasticity.

Looking at leading brokerages, CITIC Securities, Guotai Haitong, China Merchants Securities, CICC, and Shenwan Hongyuan have already disclosed earnings forecasts, with net profits exceeding 10 billion yuan each.

CITIC Securities leads the industry with a net profit of 30.051 billion yuan, followed by Guotai Haitong with an estimated 28.006 billion yuan. China Merchants Securities, CICC, and Shenwan Hongyuan are expected to achieve net profits of 12.3 billion, 10.535 billion, and 10.1 billion yuan respectively, highlighting the resilience of top-tier firms.

“Cancellation” Buybacks Boost Confidence

While solidifying their core businesses, brokerages are also continuously strengthening market value management.

The 21st Century Business Herald noted that as an important means of market value management, “cancellation-style” buybacks are increasing among brokerages, reflecting confidence amid low valuation levels.

The so-called cancellation buyback refers to a company repurchasing shares and canceling them by reducing share capital, with the main goal of decreasing total shares outstanding to improve earnings per share and shareholders’ equity.

Since the new “National Nine Rules” proposed “guiding listed companies to repurchase shares and legally cancel them” (April 12, 2024), nearly 10 listed brokerages have announced completion of buyback plans, with the proportion of cancellation buybacks gradually rising.

Data from Tonghuashun iFinD shows that as of March 20, nine brokerages have completed share repurchase plans, totaling 263 million shares repurchased, with a total amount of 2.57 billion yuan, including Eastmoney Securities, Zhongtai Securities, Hu’an Securities, Guo Investment, Guotai Haitong, Guojin Securities, Xiangcai Securities, Western Securities, and Caitong Securities.

Guotai Haitong leads with a buyback scale of 1.211 billion yuan, Zhongtai Securities and Caitong Securities each repurchased 300 million yuan, Eastmoney Securities about 250 million yuan, Guo Investment 400 million yuan, and Hu’an Securities approximately 119 million yuan. Xiangcai Securities, Guojin Securities, and Western Securities each repurchased less than 100 million yuan, at 80 million, 59 million, and 50 million yuan respectively.

Since the start of 2026, buyback activity among brokerages continues. Guo Investment completed a 200 million yuan buyback on March 13; Hongta Securities plans to use 100 million to 200 million yuan of its own funds for buybacks, having repurchased 18.4759 million shares worth about 160 million yuan by the end of February, with the plan still ongoing.

The 21st Century Business Herald learned that, regarding the purpose of buybacks, brokerage share repurchases mainly fall into three categories: market value management, equity incentives, and cancellation. Among the industry cases, more than half of the brokerages explicitly use shares for the first two purposes; meanwhile, the proportion of cancellation buybacks is rapidly increasing, with many brokerages choosing to repurchase and directly cancel shares to reduce registered capital.

For example, Zhongtai Securities and Hu’an Securities explicitly stated during the planning stage that the repurchased shares would be canceled to reduce capital. Zhongtai Securities completed its buyback in August 2025, and all shares were canceled by the 27th of that month, reducing the total share count from 6.969 billion to 6.922 billion. Hu’an Securities also completed the cancellation of the repurchased shares in December 2025, with corresponding changes in registered capital.

Guojin Securities adjusted some of its repurchased shares for cancellation after implementation, aiming to protect investors and enhance long-term value. After last December’s cancellation, its total shares decreased from 3.713 billion to 3.705 billion.

Eastmoney Securities and Caitong Securities announced plans to sell the repurchased shares via centralized bidding 12 months after the buyback announcement; if not fully disposed of within three years, remaining shares will be canceled following legal procedures.

Some top institutions are also advancing standardized cancellation of incentive shares. Guotai Haitong announced at the end of January 2026 that it planned to repurchase and cancel 81,700 restricted A-shares, due to the fact that three reserved incentive recipients in its A-share restricted stock incentive plan were suspected of violations or failed to meet performance targets, with a total repurchase amount of 470,000 yuan.

Will the Brokerage Sector See a Recovery?

Since 2026, the market has generally improved, with high earnings growth and buybacks “supporting the market,” establishing the main development theme for brokerages.

On March 6, at the Fourth Session of the 14th National People’s Congress, CSRC Chairman Wu Qing outlined key measures for high-quality development of the capital market during the “14th Five-Year Plan,” including reform of core systems, supporting new productive forces, risk prevention, and dual opening, providing a clear roadmap for long-term market development.

Regarding brokerages, Wu Qing stated that efforts will be made to revise and implement regulations for securities companies, actively support leading institutions to grow stronger, promote differentiated development among small- and medium-sized brokerages, improve governance, strengthen internal controls, enhance services, and develop in a differentiated manner.

Shanxi Securities non-bank analyst Sun Tiantian pointed out that ongoing reforms in the capital market, empowering new productive forces and improving the institutional ecosystem, are pushing the industry toward a more professional-driven transformation. This will open up incremental space in investment banking, wealth management, and institutional business, sustaining industry prosperity.

“From a valuation perspective, as of March 6, 2026, the Shenwan Securities sector PB was 1.29 times, at the 45.87th percentile over five years. Policy dividends will catalyze valuation recovery,” Sun said.

However, despite active markets this year, the brokerage index has fallen nearly 8%, among the largest declines across industries, causing some investors to doubt the prospects of a sector recovery.

Recently, the brokerage sector has experienced several movements. On March 16, Dongwu Securities announced a restructuring plan with Donghai Securities, and its stock price fell 7%. On March 20, after Eastmoney disclosed its first annual report, the stock dropped over 5%, with nearly 2 billion yuan of net main capital outflows, ranking first among A-shares.

As a result, market discussions about brokerage stocks have intensified: the sector continues to weaken and “slide without end.” Against the backdrop of valuation and earnings mismatch and ongoing policy dividends, is this sector on the verge of a strategic “dawn”?

According to research reports summarized by the 21st Century Business Herald, sell-side analysts generally hold an optimistic view, believing that current valuation levels and institutional holdings are at low points compared to similar historical market environments, presenting strategic allocation opportunities.

Based on Huatai Securities’ latest report, the decline in brokerage stocks this year, despite strong fundamentals, is mainly influenced by four factors:

1. Capital market suppression. Since the beginning of the year, core broad-based ETFs have experienced continuous net redemptions, totaling over 1 trillion yuan, including approximately 600 billion yuan and 100 billion yuan net outflows from the CSI 300 and SSE 50 ETFs respectively (brokerage weight about 5%), creating short-term pressure.

2. Policy stabilization. Measures such as raising margin requirements and trading regulations are guiding the market toward a slow bull, reducing sector elasticity.

3. Changes in incremental capital structure. Quantitative private funds, representing high-risk appetite, prefer small- and mid-cap stocks and high-elasticity sectors, with lower allocations to brokerages.

4. Concerns over earnings sustainability. Past performance of brokerages fluctuates significantly with market conditions, and worries about future growth create downward pressure.

Huatai Securities’ non-bank team believes this is a strategic window for allocation, as the sector’s earnings stability and sustainability are improving, and factors like capital market policies and geopolitical risks are easing. Coupled with strong earnings, low valuations, and policy support, this could lead to valuation recovery.

China Galaxy Securities’ non-bank analyst Zhang Qi also expressed optimism about long-term investment value, recommending focus on three types of firms: first, top brokerages with strong comprehensive strength (e.g., CITIC Securities, Guotai Haitong, Huatai Securities); second, large and medium-sized brokerages with differentiated advantages in wealth management, proprietary trading, and cross-border businesses (e.g., Eastmoney Securities, East Securities); third, small- and medium-sized brokerages with high earnings elasticity expectations.