Net profit nearing 10 billion yuan cannot hide underlying concerns: Shenwan Hongyuan's investment income accounts for 60% of revenue, Q4 performance is "halved," and multiple subsidiaries received fines this year.

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Shenwan Hongyuan Securities has recently released its 2025 annual report. The financial statements show that, benefiting from a significant increase in trading activity in the 2025 A-share market, the company achieved full-year operating revenue of 24.256 billion yuan, up 30.29% year over year; net profit attributable to shareholders of listed companies was 9.507 billion yuan, up 82.46% year over year, and its operating performance hit the highest level in recent years.

Judging by single-quarter performance, Shenwan Hongyuan’s results show substantial fluctuations. The data indicate that from the first quarter to the fourth quarter of 2025, the company’s net profit attributable to shareholders was 1.977 billion yuan, 2.307 billion yuan, 3.732 billion yuan, and 1.491 billion yuan, respectively. Among them, net profit in the third quarter reached the peak for the full year, but in the fourth quarter it dropped sharply by 56.5% quarter over quarter, and was also the lowest single quarter of the year.

The company did not provide a specific explanation in the annual report for the large fluctuations in quarterly performance. Based on an analysis of the market environment, in the fourth quarter the A-share market’s trading heat cooled down, while the company’s fair value change gains and losses in that quarter shifted from positive to negative, which may have created a major impact on performance.

In terms of revenue composition, in 2025 the company’s combined “investment gains + fair value change gains and losses” totaled 14.935 billion yuan, accounting for 61.57% of operating revenue, up further from 59.73% in the same period of the previous year. Meanwhile, net fee and commission income was 8.477 billion yuan, with its share decreasing from 35.86% to 34.95%.

Specifically, net fee income from the asset management and fund management business fell 7.81% year over year, from 0.796 billion yuan to 0.734 billion yuan. The company explained that this was mainly due to the decline in fee income from the fund management business. Against the backdrop of an overall rebound in the industry’s total asset management scale, it is worth paying attention to the contraction in this segment.

Shenwan Hongyuan also faces challenges in compliance and risk control. The annual report shows that during 2025, multiple subsidiaries under the company received regulatory fines or disciplinary actions, with issues concentrated across areas including investment banking business, asset management business, and compliance management of branches and institutions.

More specifically, in March 2025, due to not adequately verifying the recognition of R&D personnel and the accuracy of R&D investment in the IPO underwriting sponsorship project of Guohong Tools System (Wuxi) Co., Ltd., Shenwan Hongyuan Securities’ underwriting and sponsorship was issued a notice of criticism by the Shanghai Stock Exchange, and the two sponsor representatives were banned from the industry for 6 months.

In July 2025, Shenwan Hongyuan Securities (Western Securities) was subject to administrative penalties by the Xinjiang Uygur Autonomous Region Branch of the People’s Bank of China for issues including failing to take enhanced identification measures for high-risk clients as required, and failing to perform manual analysis and identification for abnormal transactions as required. In October of the same year, its five Qiqiuzhenxing Street outlets were issued a warning letter by the Xinjiang Securities Regulatory Bureau for issues such as arranging bank staff to solicit customers on its behalf.

For the asset management business, in August 2025, Shenwan Hongyuan Asset Management received a warning letter from the Shanghai Securities Regulatory Bureau for non-compliant investment management in private asset management business and insufficient active management by certain private asset management plans. In October 2025, Shenwan Hongyuan Securities was again issued a warning letter by the Shanghai Securities Regulatory Bureau for failing to disclose material matters to investors within the required period for certain private asset management products, and failing to conduct post-investment checks as required by its internal system.

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责任编辑：company observer