China’s securities sector is a bloody battlefield, with dozens of brokers large and small competing for a limited pool of investors. Within that jungle, the smaller Capital Securities Corp. Ltd. (601136.SH) is trying to convince Hong Kong investors why its worthy of their dollars – a potentially tough sell as it submitted its listing application earlier this month into one of the hottest Hong Kong IPO markets in years.
The company is hardly a titan in its field. Its listing application shows it ranked 28th among China’s 42 brokerages listed in Shanghai and Shenzhen last year in terms of revenue and profit. Its growth trajectory was stronger, with the company recording the fifth-fastest growth for average annual revenue and 10th fastest for profits between 2022 and 2024. Most notably, the company claimed the top spot among its peers for return on average total assets (ROAA).
Capital Securities’ profit has also climbed steadily, nearly doubling from 550 million yuan ($77 million) in 2022 to 985 million yuan last year. But the momentum slowed sharply this year, as its 490 million yuan profit for the first half of 2025 was up just 2.8% year-on-year. It attributed the sudden slowdown to pressure on its asset management division, as performance-related fees declined due to bond market volatility. That was partly offset by a solid upturn in investment income driven by stock market gains.