Asset management revenue drops significantly, with two subsidiaries incurring losses. What is the key to Chuangchuang Securities' performance growth?

Ask AI · Can strong growth in investment returns offset weaknesses in the asset management business?

Capital Securities’ 2025 attributable net profit grew 7.26% year over year, but net interest income losses widened year over year, and net fee and commission income fell 28.55% year over year

Investment Time Network · Punctuation Finance Researcher Tian Wenhui

With Capital Securities’ 2025 performance growing as the stock market rebounds, the company’s structural problems in its revenue are also fairly evident.

According to Capital Securities’ recently disclosed 2025 annual report, in that year the company’s operating revenue increased 4.58% year over year, and attributable net profit increased 7.26%, mainly due to a 48.16% year-over-year increase in the combined total of investment gains and fair value change gains. Meanwhile, net fee and commission income fell 28.55% year over year, and net interest income losses widened year over year. Within net fee and commission income, net fee income from the asset management business fell 54.57% year over year, becoming the largest factor constraining the company’s performance growth that year. Accordingly, Capital Securities’ asset management–related business revenue in 2025 also fell 47.55% year over year.

In 2025, Capital Securities also had two wholly owned subsidiaries with losses. Among them, Capital Jingdu Futures Co., Ltd. (hereinafter “Capital Jingdu Futures”) recorded a net profit loss of RMB 10.3604 million, while Capital Zhengdesheng Capital Management Co., Ltd. (hereinafter “Capital Zhengdesheng”) recorded a net profit loss of RMB 19.0857 million.

The progress of Capital Securities’ H-share issuance has also continued to draw sustained attention from the market.

According to Capital Securities’ 2025 annual report, the company submitted an application to issue H shares and list them on the Main Board of the Hong Kong Stock Exchange on October 16, 2025. This issuance and listing still needs to obtain filings, approvals, or authorizations from relevant government bodies, regulators, and the securities exchange(s) such as the China Securities Regulatory Commission, the Hong Kong Securities and Futures Commission, and the Hong Kong Stock Exchange, so there remains uncertainty around the matter.

Investment Time Network and Punctuation Finance Researcher sent a communications outline to Capital Securities regarding issues such as the decline in asset management business revenue and widening losses in net interest income; as of the time of publication, it had not received a response.

Asset management income down nearly 50%

In terms of overall performance, Capital Securities achieved growth in both revenue and net profit in 2025. However, upon a deeper analysis of the revenue structure, it can be seen that the widening losses in net interest income and the year-over-year decline in net fee and commission income show that the company’s revenue structure has weaknesses. In particular, the sharp drop in asset management income became the biggest factor constraining the company’s performance growth that year.

Capital Securities’ 2025 annual report shows that, in that year, the company’s operating revenue was RMB 2.528 billion, up 4.58% year over year; attributable net profit was RMB 1.056 billion, up 7.26% year over year.

The growth in performance was mainly driven by growth in investment-related gains. In 2025, the combined amount of the company’s investment gains and fair value change gains was RMB 1.692 billion, up 48.16% year over year. Of this, investment gains were RMB 1.873 billion, up 66.79%.

Net fee and commission income within operating revenue also fell sharply. In 2025, this metric for Capital Securities was RMB 971 million, down 28.55% year over year, mainly because net fee income from the asset management business was RMB 403 million, down sharply 54.57% year over year. Of that, net fee income from collective asset management business was RMB 345 million, down 57.88% year over year. Correspondingly, Capital Securities’ asset management–related business revenue in 2025 also fell sharply to RMB 477 million, down 47.55% year over year; and the total profit from asset management–related businesses was RMB 306 million, down 58.02% year over year.

Capital Securities said that during the reporting period, affected by conditions in the bond market, the company’s asset management products’ excess performance remuneration declined, causing business income to retreat somewhat, though asset management scale continued to grow steadily.

The company’s assets under management for its asset management business are mainly bonds. At the end of 2025, within the collective asset management business’ period-end main entrusted assets’ initial cost, bonds were RMB 103.563 billion, accounting for 94.55%.

In recent years, the year-over-year growth rates of net fee income from Capital Securities’ asset management business have fluctuated greatly: in 2022, 2023, and 2024, the year-over-year growth rates were 69.67%, -23.48%, and 75.64%, respectively.

It is also worth noting that Capital Securities’ net interest income continued to incur losses in 2025. That item was -1.43 billion yuan, with losses widening 50.53% year over year. This was mainly due to a 9.34% year-over-year decline in interest income. Within interest income, other debt investment interest income fell 21.31% year over year.

Two subsidiaries with losses

In 2025, Capital Securities had two wholly owned subsidiaries with net profit losses.

In 2025, Capital Jingdu Futures recorded operating revenue of RMB 36.2953 million, down 26.01% year over year; net profit was -10.3604 million yuan, compared with RMB 1.0985 million the previous year. The decline in performance was mainly affected by factors such as lower bank deposit interest rates and lowered interest rates on demand deposits for exchange settlement reserves.

Correspondingly, within Capital Securities’ 2025 net fee and commission income, net income from the futures brokerage business was RMB 13.0446 million, down 1.57% year over year.

According to Capital Securities’ 2025 annual report, the company carries out futures brokerage business and asset management business for futures companies through Capital Jingdu Futures. During the reporting period, the futures brokerage business of Capital Jingdu Futures saw a 53% year-over-year increase in the amount of brokerage transactions on a commission basis. Under the principle of “returning to the roots of asset management, adhering to active management, highlighting futures characteristics, and achieving differentiated development,” the underlying exposures of Capital Jingdu Futures’ asset management products focus on the futures and derivatives sector.

Capital Jingdu Futures also needs to strengthen compliance management.

Capital Securities’ 2025 annual report shows that in December 2025, the Beijing Regulatory Bureau of the China Securities Regulatory Commission decided to take administrative regulatory measures against Capital Jingdu Futures by issuing a warning letter, pointing out that during the conduct of intermediary business, Capital Jingdu Futures had the following violations: first, monitoring and risk identification for the intermediary persons’ practice activities were not in place, and customer follow-up visits were insufficient, reflecting shortcomings in Capital Jingdu Futures’ risk management and defects in internal controls; second, monitoring of anomalous trading behaviors of some customers was not in place, reflecting that Capital Jingdu Futures’ customer trading behavior management mechanism is not sound. Capital Securities said that in response to the relevant issues, Capital Jingdu Futures has actively carried out rectification.

Capital Securities’ other wholly owned subsidiary that engages in private investment fund business, Capital Zhengdesheng, also recorded a net profit loss of RMB 19.0857 million in 2025, though the loss narrowed year over year.

Year-over-year growth rate of net fee income from Capital Securities’ asset management business in recent years

Data source: Capital Securities’ annual report

Investment Time Keywords: Capital Securities (601136.SH)

Author statement: Personal views only, for reference