Why is the revenue and net profit growth rate much lower than the industry for Huatai Securities?

Ask AI · Huatai Securities International Business Revenue Plummets, How to Optimize Future Strategy?

Huatai Securities’ revenue in 2025 increased by 6.83% year-on-year, and net profit attributable to shareholders grew by 6.72% year-on-year, with growth rates far below the industry

Investment Time Network, Punctuation Finance Researcher Tian Wenhui

Huatai Securities Co., Ltd. (hereinafter referred to as Huatai Securities, 601688.SH) achieved both revenue and net profit growth last year, but both growth rates were significantly lower than the overall growth of the brokerage industry during the same period.

According to Huatai Securities’ 2025 annual report, the company’s operating income increased by 6.83% year-on-year, and net profit attributable to shareholders increased by 6.72% year-on-year. Meanwhile, data released recently by the China Securities Industry Association shows that in 2025, brokerage firms’ operating income grew by 19.95% year-on-year, and net profit grew by 31.2%.

Huatai Securities’ non-recurring net profit attributable to shareholders in 2025 grew by 80.08% year-on-year. This was mainly due to a large investment gain of 6.34B yuan from the sale of all equity in its controlled U.S. subsidiary AssetMark Financial Holdings, Inc. in 2024.

Correspondingly, the biggest factor affecting Huatai Securities’ performance growth in 2025 was a 46.75% year-on-year decline in international business revenue. Also significantly impacting Huatai Securities’ 2025 performance was a 56.63% year-on-year decrease in net fee income from asset management business.

It is noteworthy that Huatai Securities’ total assets both on and off the books also grew rapidly in 2025, leading to a quick decline in capital leverage ratio.

Investment Time Network, Punctuation Finance Researcher sent a communication outline regarding the decline in international business revenue and net fee income from asset management to Huatai Securities, but has not received a reply as of press time.

Why Did International Business Revenue Drop So Much?

Huatai Securities’ net profit growth in the past year was below the industry average, but its non-recurring net profit growth was higher than the industry. This was mainly because the company realized a substantial investment gain from disposing of offshore subsidiaries in 2024, which also caused a sharp decline in international business revenue last year.

In 2025, Huatai Securities’ operating income was 35.81 billion yuan, up 6.83% year-on-year; net profit attributable to shareholders was 16.38B yuan, up 6.72%; non-recurring net profit attributable to shareholders was 16.27B yuan, an 80.08% increase from 9.03B yuan the previous year, mainly due to a 6.34B yuan gain from disposal of subsidiaries in 2024, which resulted in non-operating income of 6.32B yuan that year, compared to only 115 million yuan in 2025.

Huatai Securities stated in its 2025 annual report that any gains or losses from the disposal of control over subsidiaries are included in investment income for the period when control is lost.

Huatai Securities’ investment income in 2025 was 20.19B yuan, down 6.63% year-on-year. Among them, investment income from disposal of long-term equity investments was 303.9k yuan, a 99.995% decrease from 303.9k yuan last year. In 2024, disposal of subsidiaries led to a 63.51% year-on-year increase in investment income.

Huatai Securities’ 2024 annual report shows that on April 25, 2024, after approval by the company’s board, the company sold all approximately 50.8738 million common shares of its U.S. holding subsidiary AssetMark (holding 68.40%) in its offshore wholly-owned subsidiary Huatai International Investment Holding. The transaction was completed on September 5, 2024, with a final deal value of about 6.34B yuan, generating an investment gain of 12.76B yuan. From the date of settlement, Huatai Securities no longer holds any equity in AssetMark.

Regarding the reason for the sale, Huatai Securities’ announcement at the time stated that it was a comprehensive consideration of the competitive landscape of the asset management platform industry and the company’s need for further international business development. AssetMark is a U.S.-based comprehensive asset management platform. Huatai Securities believed that the sale would help achieve higher investment returns, further optimize asset and resource allocation, and maximize investment income and shareholder returns.

Because the one-time gains and losses from the previous year’s subsidiary disposal inflated the comparable base, Huatai Securities’ international business revenue in 2025 was 6.34B yuan, a decrease of 5.92B yuan or 46.75% year-on-year; it accounted for 16.53% of total revenue, down 16.63 percentage points from the previous year. Specifically, international business investment income was 5.2B yuan, down 7.93B yuan or 27.91%. Excluding the impact of subsidiary disposals, international business revenue increased by 3.07B yuan year-on-year.

From 2022 to 2024, Huatai Securities’ international business revenue accounted for 20.71%, 21.67%, and 33.16% of total revenue, respectively.

Asset Management Fee Income Declined by Over 50%

In Huatai Securities’ 2025 profit statement, net fee income from asset management and foreign exchange gains also declined rapidly.

Huatai Securities’ 2025 asset management fee income was 1.8B yuan, down 56.63% year-on-year. Among them, net income from asset management was 520 million yuan, down 83.26%; fund management net income was 1.28B yuan, up 22.79%.

Huatai Securities’ 2025 foreign exchange gains were negative 1.05B yuan, compared to positive 750 million yuan last year, mainly due to foreign exchange losses.

In 2025, Huatai Securities’ operating expenses saw a 141.46% year-on-year increase in credit impairment losses to 594 million yuan, mainly due to increased impairment losses on lent funds.

It is also noteworthy that Huatai Securities’ capital leverage ratio declined rapidly.

At the end of 2025, Huatai Securities’ parent company’s capital leverage ratio was 13.27%, down from 18.02% at the end of the previous year. This was mainly due to a 30.32% year-on-year increase in total on- and off-balance sheet assets, while core net capital slightly decreased.

Huatai Securities’ International Business Revenue Share in Recent Years

Data source: Huatai Securities Annual Report

Investment Keywords: Huatai Securities (601688.SH)

Author statement: Personal opinions, for reference only