China Merchants Securities' market share has decreased by 1.25 percentage points over five years, with proprietary trading business falling significantly behind.

On the evening of March 27, 2026, China Merchants Securities released its 2025 annual report. For the full year, revenue reached RMB 24.97B, up 19.5%; net profit attributable to shareholders was RMB 12.35 billion, up 18.9%. Both revenue and profit margins hit record highs in history.

The market responded positively. On the day the annual report was released, the company’s share price already surged ahead, with a cumulative increase of 3.89% within four trading days.

Compared with other leading firms, however, this performance is far behind. As of April 3, there were 25 listed securities firms that had disclosed their 2025 annual reports. Of them, 9 firms had revenue exceeding RMB 20 billion. Excluding Guotai Haitong, which was merged during last year, the remaining 8 leading securities firms combined achieved revenue of RMB 275.5 billion, up 7.61% year over year, and net profit attributable to shareholders of RMB 113.8 billion, with a year-over-year increase of 33.5%.

In comparison, China Merchants Securities’ revenue growth rate is among the top, but its net profit attributable to shareholders is far weaker than its peers, and the trend of “higher revenue but not higher profits” is evident.

Over the past five years, the Matthew effect in the securities industry has intensified significantly. Although China Merchants Securities has consistently maintained a steady revenue ranking and remained seated in ninth place in the industry, its market share has actually declined rather than increased. According to Wind and SAC data, from 2021 to 2025, China Merchants Securities’ revenue market share fell from 5.86% to 4.61%, and its net profit market share fell from 6.10% to 5.61%.

The company’s share price also declined accordingly. As of the close on April 3, its share price was RMB 15.55 per share, corresponding to a market cap of RMB 130.2 billion. Compared with the share price high of RMB 24.73 over the past five years, it has dropped by 37%, and the market value has evaporated by nearly RMB 77.0 billion.

**　　Judging from its business structure, brokerage and proprietary trading have long been the core components of China Merchants Securities’ profits, and among them, proprietary trading lacks elasticity, becoming the main reason the company fell behind in this round of recovery.**

Between 2021 and 2025, the revenue mix from China Merchants Securities’ two segments—brokerage and proprietary trading—was 59%, 60%, 75%, and 75%, respectively. (Note: Brokerage business income = net brokerage fee income; proprietary trading business income = investment net gains − investment gains related to associates and joint ventures + net gains from fair value changes)

Over the past five years, China Merchants Securities’ brokerage business has closely tracked industry trends, with growth rates each year roughly in line with the industry’s average.

However, when observing its proprietary trading business, it shows a distinctly lagging pattern. In 2021, China Merchants Securities’ investment return rate was 3.07%, ranking 28th out of 42 listed securities firms. From 2022 to 2023, the company’s investment return rate was lowered to a range of 1.65% to 1.85%, and its ranking stayed within 20th to 30th. From 2024 to 2025, as the capital market recovered, the company’s investment return rate rebounded to the 2.55%–2.60% range, but its ranking declined and fell outside the top 30. (Note: Investment return rate = proprietary trading business income / financial investment)

It is worth noting that in the context of a strong rebound in China’s A-share market in 2025, the Shanghai Composite Index, the Shenzhen Component Index, and the ChiNext Index rose by 18.41%, 29.87%, and 49.57%, respectively. Brokerage proprietary trading businesses saw broad-based gains. According to Wind data, the 25 listed securities firms that had released annual reports combined to achieve investment returns of RMB 184.9 billion, up 32.94% from the same period last year. In contrast, China Merchants Securities achieved investment returns of RMB 9.79B that year, with a year-over-year growth rate of only 2.70%, far weaker than the industry overall.

**　　The “earnings stickiness” demonstrated by China Merchants Securities’ proprietary trading business may stem from its relatively conservative and prudent investment strategy.**

Looking at the structure of China Merchants Securities’ trading financial assets, as of end-2025 its overall scale was about RMB 270 billion. Of this, bonds accounted for about RMB 166 billion, or roughly 60%. Equity investments and fund holdings together were about RMB 82 billion, or about 30%, a proportion close to the lowest in the industry.

By comparison, CITIC Securities’ combined holdings of equity investments and funds accounted for 34%, while CICC’s figure was 47%.

This causes China Merchants Securities’ investment return rate to lag far behind other leading securities firms. Among the revenue TOP10 securities firms, China Merchants Securities’ investment return rate has long ranked second-to-last or third-to-last, and its long-term performance has only been better than that of GF Securities.

It is precisely because China Merchants Securities has long adhered to a thinking model that keeps its proprietary trading business firmly under control, leading to its proprietary positions being heavily bond-like and structurally conservative. While other securities firms soared in 2025’s strong market, China Merchants Securities only managed a small jump in performance.

**　　China Merchants Securities’ cautious attitude is also reflected in its international business, where its overseas market expansion has progressed slowly and its pace of internationalization is slower than that of peers.**

In 2022, China Merchants Securities’ overseas business fell into losses. Although the overseas business was repaired thereafter to some extent, its growth rate has continued to slow year by year. In 2025, its overseas revenue increased by only 6.09% year over year to RMB 1.16B, and has not yet recovered to the 2021 level (RMB 1.44B).

From a proportional perspective, in 2025 the company’s overseas revenue share has hovered around the low single digits for years; in 2025 it was only 4.65%. Among the TOP10 securities firms, this figure ranks second-to-last, only higher than Shenwan Hongyuan.

It cannot be denied that China Merchants Securities’ steady strategy has laid a solid foundation for its steady business base. In the past five years, the rankings of China Merchants Securities’ other business segments have always remained stable. According to Wind’s SECI database statistics, for its brokerage business, except for 2024 when it ranked sixth, it ranked fourth in other years as well. From 2022 to 2024, its investment banking business ranked around twelfth in the industry, and in 2025 it returned to seventh. In asset management, the company’s ranking has steadily improved in recent years from sixteenth to tenth.

However, China Merchants Securities’ hesitance in the proprietary trading and international business areas may already be its biggest shortcoming going forward. If it does not achieve breakthroughs in these two areas again, China Merchants Securities may continue to fall behind in future competition within the securities industry.

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Responsible editor: Company Observation