"Live coverage" of the Cathay Securities and Haitong Securities earnings conference: Subsidiaries will strive for a "clear plan" before the end of the year, and after the integration of Hua'an Haitong Wealth, there will be significant synergistic effects.

The first annual performance briefing session after the merger of Guotai Hiatong was held on March 31.

At this highly anticipated performance briefing, the company’s management—including Chairman Zhu Jian, President Li Junjie, Vice President and Chief Risk Officer/Board Secretary Nie Xiaogang, Vice President and Chief Financial Officer Zhang Xinjun, Vice President Han Zhida, and others—responded to key areas of concern in the market, including integration progress, merger efficiency, room for balance-sheet expansion, the development of the wealth management business, and the positioning of subsidiaries.

Relevant executives said at the performance briefing that the merger of Guotai Hiatong has preliminarily achieved a “1+1>2” effect, and there is still room for balance-sheet expansion going forward. Chairman Zhu Jian also reminded the market to view the approximately CNY 6 billion in negative-goodwill profit resulting from the merger rationally, emphasizing that building a first-class investment bank is a “marathon.”

In addition, important information such as the integration progress of the company’s subsidiaries is also mentioned in this performance briefing, including the integration progress and future targets of two public fund companies, Hua’an and Haitong.

View the “one-off gains” rationally

Regarding the stellar profits in the first year after the merger, Chairman Zhu Jian specifically reminded investors of special factors behind the statements: in 2025, Guotai Hiatong will recognize approximately CNY 6 billion of entry profit after tax due to negative goodwill arising from the merger, which is not comparable in 2026. He hopes everyone will focus more on the growth in net profit attributable to owners after deducting non-recurring items.

Zhu Jian emphasized that, in the face of the high expectations from all sectors of society for the new company after the merger, management has a clear understanding. Entering a first-class investment bank and building one is definitely a marathon-style long run, not a short-term dash for the hundred-meter sprint. Compared with top international investment banks with nearly a century of history and deep foundations, and compared with the best practices of the best domestic peers, Guotai Hiatong is still young in its first place, and there is still a significant gap as the second; it needs to keep working diligently and for a long time to deliver results. It is not only about being big in terms of scale, but also about being strong in professional services and in governance structure.

He said he hopes to learn, catch up, and surpass peers together, moving forward hand in hand, to jointly build a stronger investment bank and make more effective contributions to the market, working together rather than competing for momentary wins and losses.

“Move upward while staying steady”—grab the “three shifts”

Standing at the start of the “15th Five-Year Plan” planning period, the market is highly focused on how leading securities firms assess the direction of capital market trends.

At the meeting, Zhu Jian gave a clear expectation, believing that China’s macroeconomy can still deliver progress while staying stable, and improve quality and efficiency. The current policy orientation is also carried out around this goal. Against this backdrop, the importance attached to the capital market is unprecedented. The capital market is expected to achieve development toward “new” and “better” by further deepening comprehensive reforms, enhancing resilience and vitality, making investment and financing functions more balanced, and strengthening the institutional inclusiveness and adaptability of capital market development. Therefore, he believes that it is highly likely that the market will move upward while staying steady.

Against this background, he proposed that securities firms must achieve the “three accelerations in shifting.” Shifting from simply pursuing scale and profit expansion to a transformation with “function first”; shifting from homogeneous operations to differentiated development; shifting from competing on simple service price to creating greater value for customers, achieving win-win outcomes for both buyers and sellers. That is the direction for future development.

Grab the opportunity of the “deposit migration”

In a low interest rate environment and amid the market hotspot of “deposit migration,” the wealth management business has become the focus of investors’ questions.

President Li Junjie revealed the latest highlight figures. With rapid growth in the past few years, the company’s buy-side asset management scale for investment advisor (投顾) has nearly reached CNY 800 billion. At the same time, it has continued to grow in the first quarter as well, with product custody scale reaching more than CNY 6.5 trillion and growing quickly.

Given strong demand from residents for multi-asset allocation, the company will continue to enhance its value-creation capabilities. First, do a good job in customer service systems. Second, implement the company’s “All in AI” strategy to improve investment-advisor service efficiency. Third, strengthen global asset allocation capabilities.

In proprietary trading and trading businesses, Vice President and Chief Financial Officer Zhang Xinjun also disclosed impressive data. In 2025, the company seized opportunities from market conditions. Net revenue from trading and investment business reached CNY 25.4 billion, up 72% year over year. In the STAR Market market maker rankings, it ranked first in the industry. For ETF market making, transaction scale has already surpassed CNY 1 trillion.

Looking ahead to this year, he believes that the country’s economic development will remain stable and positive, and the foundation for healthy capital market development will continue to be strengthened, providing a good environment for the company’s trading and intermediation business.

Accelerate subsidiary integration

Zhu Jian said that in 2026 the company will push integration and fusion further and in depth, accelerate the release of merger efficiency. In 2025, the integration at the level of the parent company’s legal entities was basically completed. The next step is to further deepen integration. At the same time, it is necessary to speed up the integration and development of various types of subsidiaries.

He also disclosed that for the integration of subsidiaries of various similar types, the China Securities Regulatory Commission has granted a five-year transition period. The transition period can be said to be quite long, and it can also be said not that long. Therefore, it is still necessary to seize time to put the integration and development of various subsidiaries on the important agenda. All types of subsidiaries in 2026 should strive to clarify plans and start implementation, so that the integration effects and investment-advisory customer service effectiveness of all types of company integrations can continue to be released continuously, and the synergy efficiencies and the “1+1>2” effectiveness in customer service brought by integration and fusion can be released in a stable and deeper way, while integration and fusion are also advanced in a steady and orderly manner.

He also mentioned that there are currently two App platforms. On the basis of integrating the overall core trading systems, the App client user base should also be aimed to achieve stable migration. In addition, it is necessary to further tap the value of existing customers, led by communication and rollout of new strategies and a new culture, to solidly advance the release of potential and value enhancement.

Hua’an and Haitong Fund: “complementary”

Regarding the integration progress of Hua’an Fund and Haitong Fund (the two public fund companies), which investors care about greatly, Vice President and Board Secretary Nie Xiaogang clearly stated that the integration development path for Hua’an Fund and Haitong Fund is being actively promoted. Various feasible solutions have also been studied, assessing each side’s strengths and complementarity. The company will continue to advance the formulation of relevant plans, and formulate plans that are beneficial for the future development of the company’s public funds.

During the transition period, these two companies will remain steadfast in developing their core businesses with high quality and will handle their own operating work, which will not affect their own operating activities.

In the assessment, Hua’an Fund’s strategy of diversified development has achieved remarkable results, with the scale ranking of its Gold ETF firmly staying at the top in the industry. Haitong Fund mainly excels in pension asset management scale, with scale also reaching a new historical high. Its bond ETF scale has ranked first in the industry for five consecutive years. Therefore, in terms of business capabilities and license qualifications, the two subsidiary companies should be highly complementary.

He reiterated that the relevant plan formulation is being expedited, and that various possibilities are under consideration. He believes that after the integration of the two subsidiary companies, strong synergy effects will be produced, and they will become one of the most important subsidiary companies under Guotai Hiatong.

In addition, in terms of international expansion, the company has not only clarified plans to increase capital to overseas subsidiaries (already increasing capital by HKD 3.9 billion into Guotai Hiatong Financial Holdings). Going forward, it will continue to increase capital. It also places greater emphasis on overseas business ROE, which is currently significantly higher than that of domestic operations. Increasing overseas capital is a strategic choice and also responds to allocation needs, aiming to better serve “Investing in China” and “China Investing.”

Maintain a high proportion of dividends

Regarding dividends and market value management, Nie Xiaogang said that, regardless of the former Guotai Junan and Haitong, or the current Guotai Hiatong, they have always attached great importance to investment returns, and have been committed to enhancing the company’s long-term investment value by building the company’s intrinsic value. They reflect the company’s investment value through normal-cadence dividend payments, mergers and acquisitions restructuring, equity incentives, share buybacks, and other measures.

For share buybacks, in 2025 the company repurchased 67.52 million A-share units, with a repurchase amount of nearly CNY 1.2 billion.

For dividends, the company adheres to multiple dividend payments within a year, maintaining a high level of dividend payout. The dividend payout ratio continues to rank among the top tier of securities firms. In 2025, the company carried out interim dividends for the second consecutive year, so the full-year dividend amount is CNY 0.5 per share (inclusive of tax). The buyback and dividend amounts in 2025 are close to 47% of net profit after deducting non-recurring items—meaning that nearly half is returned to investors.

Continuously strengthen market value management

Management also said that in the future, for all aspects of market value management, the company will continue to attach importance to and strengthen market value management. On the basis of continuously improving intrinsic competitiveness, it will study various market value management methods, including raising the ROE level and improving the core competitiveness of main businesses. Under appropriate conditions, high-quality balance-sheet expansion is an effective way to improve market value management. For share buybacks, Guotai Hiatong will, based on market conditions and the company’s financial situation, select suitable timing without affecting the company’s operations; when necessary, it will take measures such as share buybacks.

For dividends, it will continue to build a long-term stable and sustainable mechanism for shareholder value returns, enhance the stability, sustainability, and predictability of dividends, adhere to multiple dividends within a year, and maintain a high level of dividend payout.

Regarding the leverage ratio and room for balance-sheet expansion of leading securities firms that the market is concerned about, Zhang Xinjun provided some solid data. In 2025, the company’s leverage ratio reached 4.62x, and funds lent on margin (融出资金) exceeded CNY 250 billion (up more than 40% year over year).

Zhu Jian further added that the total credit granted to the new company can exceed the simple sum of the original credit granted to Guotai Junan and Haitong.

Now the company’s various banks—primarily banks as counterparties—total credit granted both domestically and internationally is far greater than the total credit previously granted when simply adding up the standalone figures of Guotai Junan and Haitong. In addition, as assets grow, the cost of liabilities is further reduced. Before the merger, the leverage of the former Guotai Junan already exceeded 4.8x and even 5x, and there is still room to expand the balance sheet.

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