Key takeaway

Guotai Haitong reported strong results in 1Q26, with revenue and net profit attributable to shareholders of the parent company excluding non recurring items surging 58.91% and 73.40% YoY, respectively. The company’s capital strength leads the industry, with both total assets and net assets attributable to shareholders of the parent company ranking first. Wealth management synergies from consolidation became evident. Brokerage and margin financing and securities lending expanded strongly. Investment banking sentiment recovered. Equity and bond underwriting ranked near the top, with ample IPO reserves. Asset management revenue grew rapidly. AUM of the company’s affiliated funds expanded steadily. Proprietary investment delivered stable performance. All business lines advanced in coordination. Integration dividends continued to be released. Operating resilience and growth momentum remained strong.

Event

On April 25, Guotai Haitong released its earnings report.

Quick Take

In 1Q26, Guotai Haitong recorded total operating revenue of RMB16.232bn and net profit attributable to shareholders of the parent company excluding non recurring items of RMB5.71bn, up 58.91% and 73.40% YoY, respectively.

Capital strength continued to improve, with total assets and net assets attributable to shareholders of the parent company both ranking first in the industry. As of the end of 1Q, the company’s total assets reached RMB2.26tn, up 6.88% from the end of last year and ranking first in the industry. Net assets attributable to shareholders of the parent company reached RMB336.425bn, up 1.82% from the end of last year, further consolidating its capital base. Proprietary investment remained stable, and investment income increased significantly after consolidation. In 1Q26, the company recorded proprietary trading revenue of RMB5.84bn, up 45.61% YoY.

Investment banking sentiment continued to recover, and underwriting scale is expected to grow steadily . In 1Q26, the company recorded investment banking revenue of RMB750mn, up 6.56% YoY. In domestic equity unde rwriting, in 1Q26 the company’s domestic equity lead underwriting scale reache d RMB9.42 bn, YoY +528.8%, ranking 5th; among which the company served as lead underwriter for 19 IPOs, raising RMB4.5bn; and lead underwriter for 31 refinancing projects, raising RMB4.9bn. In bond underwriting, the domestic bond lead underwriting scale in 1Q reached RMB377bn, YoY +55.8%, ranking 2nd. As of 1Q26, the IPO pipeline includes 16 projects, ranking 1st, including 10 on the Beijing Stock Exchange, 4 on ChiNext, and 2 on the STAR Market.

Wealth management deepens client base: Market share rises after consolidation. In 1Q26 brokerage business revenue reached RMB4.73bn, YoY +78.2%, accounting for 29.1% of total revenue; in 2025 brokerage market share was 8.56%, YoY +3bps, ranking first. In 1Q26 the margin financing and securities lending balance reached RMB254.5bn, +35% from the beginning of the year; market share was 9.8%, -0.1pct from the beginning of the year.

AUM continues to grow: Active management transformation shows clear results. In 1Q26 the company recorded asset management business revenue of RMB1.76bn, YoY +50.50%. As of 1Q26, the non-monetary AUM of Huaan Fund, HFT Investment Management, and Fullgoal Fund increased by 24.2%, 91.3%, and 27.3% YoY, respectively, and asset management scale further expanded.

Earnings forecast and valuation: Total operating revenue is expected to reach RMB73.56bn/RMB83.47bn/RMB86.81bn in 2026–2028, with YoY growth of +16.6%/+13.5%/+4.0%. Net profit attributable to shareholders of the parent company is expected to reach RMB28.46bn/RMB32.90bn/RMB34.49bn. Diluted EPS is projected at RMB1.67/RMB1.92/RMB2.01 per share. As of May 15, 2026, the company’s forward PE is 9.27x/8.05x/7.69x. The company ranks first in the industry by asset scale and may continue to benefit from capital market reforms. We remain optimistic about its mid- to long-term barriers and maintain a “Buy” rating.

Risks

Risks include capital market volatility, downward pressure on fee rates, and slower-than-expected gains in market share. First, capital market volatility risk. Capital markets are influenced by a range of complex factors, including macroeconomic conditions, monetary policy adjustments, and changes in the international environment. Prices of assets such as equities and bonds may experience significant fluctuations, which could in turn affect the value of investment portfolios. Second, fee rate downside risk. As market competition intensifies and industry dynamics evolve, fee rates for related businesses may continue to decline, putting pressure on profit margins. Third, risk of market share gains falling short of expectations. In a highly competitive market environment, despite the company’s efforts to expand its business, factors such as competitors’ strategies or limitations in the company’s products or services may prevent market share from reaching expected levels, thereby affecting profitability and long-term growth prospects.