Dongwu Securities: Assigns a Buy rating to Oriental Securities

Dongwu Securities Co., Ltd. Sun Ting and Luo Yukan recently conducted research on Oriental Securities and published a research report titled “2025 Annual Report Review: Steady Growth in Fee-Based Business, with a Significant Improvement in Profitability Quality,” giving Oriental Securities a “Buy” rating.

Oriental Securities (600958)

Investment Highlights

Event: Oriental Securities released its 2025 annual report. In 2025, the company achieved operating revenue of RMB 15.36 billion, YoY +26.2%; net profit attributable to shareholders of RMB 5.63 billion, YoY +68.2%; basic earnings per share of RMB 0.65; ROE 7.0%, up 2.9 pct year over year. In Q4, operating revenue was RMB 2.65 billion, YoY -13.2%, and quarter-over-quarter -43.7%; net profit attributable to shareholders was RMB 0.52 billion, YoY +986.4%, and quarter-over-quarter -68.2%.

Brokerage business scale and quality both rise: 1) In 2025, the company’s brokerage business revenue was RMB 2.92 billion, YoY +16.1%, accounting for 19.0% of operating revenue. In 2025, the daily average trading value of stocks and fund products across the whole market was RMB 2,053.8 billion, YoY +69.7%. In 2025, the company added 390,500 new customers; new account openings brought in assets of RMB 74.1 billion, representing YoY increases of 44.62% and 40.92%, respectively. 2) At the end of 2025, the company’s margin financing balance was RMB 39.0 billion, +39% from the beginning of the year; market share was 1.5%, flat compared with the beginning of the year. The total margin financing balance across the whole market was RMB 2,540.7 billion, +36.3% from the beginning of the year.

Investment banking income rebounds notably, with stock and bond business coordination advancing: 1) In 2025, the company’s investment banking business revenue was RMB 1.50 billion, YoY +28.5%. 2) Underwriting scale for equity businesses increased YoY by 588.3% to RMB 15.01 billion, ranking 11th; of which, 5 IPOs with raised funds of RMB 2.0 billion; 13 refinancings with underwriting scale of RMB 13.1 billion. The company’s current IPO pipeline consists of 12 projects, ranking 12th, including 3 on the main board, 4 on the NEEQ (Beijing Stock Exchange), 1 on the Growth Enterprise Market (GEM), and 4 on the STAR Market. 3) Underwriting scale for bond businesses increased YoY by 9.4% to RMB 569.1 billion, ranking 8th; of which, underwriting scale for local government bonds, corporate bonds, and financial bonds was RMB 269.8 billion, RMB 112.9 billion, and RMB 102.9 billion, respectively.

Asset management advantages remain solid, with “two-wheel drive” from public fund participation and active asset management: In 2025, the company’s asset management business revenue was RMB 1.36 billion, YoY +1.2%. As of end-2025, the company’s assets under management were RMB 286.8 billion, YoY +32.4%, including RMB 216.3 billion in the management scale of broker public funds, up 30% year over year.

Investment income improves significantly: In 2025, the company’s investment income (including fair value) was RMB 6.73 billion, YoY +40.5%; in Q4, adjusted single-quarter investment net income (including fair value, FX translation gains/losses, and other comprehensive income) was RMB 0.85 billion, YoY -50.9%. This was mainly due to the sharp decline in other comprehensive income under the fair value changes of investments in other equity instruments and other debt investments.

Earnings forecast and investment rating: Combined with the company’s operating performance in 2025, we reduce the prior earnings forecast and expect the company’s net profit attributable to shareholders for 2026–2027 to be RMB 6.4/6.9 billion (previous values were RMB 7.8/8.2 billion), corresponding to growth rates of 13%/8%, respectively. We forecast net profit attributable to shareholders for 2028 to be RMB 7.4 billion, with a YoY growth rate of 7%. The company’s current market capitalization implies PB valuations for 2026–2028 of 0.93x/0.89x/0.85x, respectively. We like the incremental growth in the company’s wealth management transformation and fund management amid the rebound in trading activity, and we maintain a “Buy” rating.

Risk warning: Trading volumes continue to decline, and volatility in the equity market increases, leading to sustained declines in investment income.

The latest detailed earnings forecasts are as follows:

Within the past 90 days, 7 institutions have issued ratings for this stock: 5 “Buy” ratings, 1 “Increase Holdings” rating, and 1 “Neutral” rating; the average target price set by institutions within the past 90 days was 14.33.

The above content has been compiled by Securities Star from publicly available information and generated by an AI algorithm (Registration No. 310104345710301240019). It does not constitute investment advice.