Net profit reaches record high, but core business halved! This H-share brokerage races toward listing, how much value does its performance really hold?

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21st Century Business Herald Reporter Cui Wenjing October 2025, Chuangtou Securities, which has officially submitted its H-share listing application to the Hong Kong Stock Exchange, has released its first annual report since its IPO pursuit.

This report is a mixed bag of good and bad news.

The good news is that both operating revenue and net profit hit record highs, at 2.528 billion yuan and 1.056 billion yuan respectively. Especially in investment-related businesses, revenue reached 1.554 billion yuan in 2025, with a year-over-year growth rate of 45.83%, contributing over 60% to Chuangtou Securities’ total revenue.

The bad news is that its traditional strength—asset management—saw a sharp decline, with revenue only 477 million yuan in 2025, down 47.55% year-over-year.

Meanwhile, its two subsidiaries—Private Equity Subsidiary Shouzheng Desheng Capital Management Co., Ltd. (“Shouzheng Desheng”) and Futures Subsidiary Chuangtou Kyoto Futures Co., Ltd. (“Kyoto Futures”)—posted losses in 2025, with losses of 19.0857 million yuan and 10.3604 million yuan respectively. The futures subsidiary was also issued a warning letter by regulators due to inadequate intermediary business and client transaction management.

On one side, record-high performance; on the other, the collapse of core businesses and ongoing losses in subsidiaries. What kind of results has this mid-tier broker, rushing toward Hong Kong listing, delivered?

Breaking down the record-high performance: Investment business as the “pillar,” wealth management beginning to show its strength

Looking at Chuangtou Securities’ 2025 annual report, its revenue and net profit are quite impressive, reaching 2.528 billion yuan and 1.056 billion yuan, both hitting historic highs.

Over a longer period, its recent performance is also noteworthy. Revenue increased from 931 million yuan at the end of 2017 to 2.528 billion yuan now, an increase of over 170% in eight years. Its industry ranking has also improved significantly—from 77th in 2017 to 49th in 2024 (since fewer brokerages have disclosed 2025 data as of press time, the 2025 ranking is not yet available).

In October 2025, Chuangtou Securities filed for listing on the Hong Kong Stock Exchange. Its prospectus shows that, according to Frost & Sullivan data, under Chinese accounting standards, from 2022 to 2024, its revenue and net profit compound annual growth rates ranked fifth and tenth among Chinese A-share listed brokerages.

However, in a horizontal comparison, Chuangtou Securities’ 2025 performance improvement is not particularly outstanding. Its revenue and net profit growth rates in 2025 were 4.58% and 7.26% respectively. Many listed brokerages forecast net profit growth rates over 50% in 2025. Even CITIC Securities, the largest in scale, is expected to see a net profit growth of around 38%.

This suggests that while Chuangtou Securities’ revenue and net profit increased compared to previous years, its industry ranking is likely to decline.

What drove its performance growth, and what limited its speed of increase?

Let’s look at the drivers.

Among Chuangtou Securities’ various business lines, the best performer was investment-related businesses, which achieved revenue of 1.554 billion yuan in 2025, with a year-over-year growth of 45.83%, accounting for more than 60% of total revenue.

When a business line accounts for 60% of total revenue, its contribution to overall performance is evident. Looking at the total revenue excluding investment businesses, the contribution of investment-related businesses to performance improvement is even more significant.

In 2025, Chuangtou Securities’ total revenue was 2.528 billion yuan; excluding investment businesses, it was only 974 million yuan, compared to 1.353 billion yuan in 2024. This indicates that without investment businesses, the company’s revenue in 2025 would have declined. The heavy reliance on investment-related businesses is clear.

It’s worth noting that in 2025, the Shanghai Composite Index rose 18.41% for the year, the Shenzhen Component Index increased 29.87%, the CSI 300 rose 17.66%, the ChiNext Index surged 49.57%, and the SSE 50 Index gained 38.80%. This means brokerages with a higher proportion of equity investments likely saw strong investment income in 2025.

Compared to top-tier brokerages with more diversified and balanced business structures, small- and medium-sized brokerages tend to focus more on easier-to-manage investment businesses. When the market is good, their investment income surges; when the market is poor, they suffer significant declines or losses, heavily affected by market fluctuations. This is often called the “proprietary trading as a performance determinant.”

Besides the top-performing investment business, another bright spot in Chuangtou Securities’ 2025 performance was wealth management, which achieved revenue of 497 million yuan, up 22.33% year-over-year.

Similar to investment businesses, wealth management revenue is also significantly affected by the A-share market’s performance. The favorable market conditions in 2025 were key to boosting securities industry wealth management revenue. Chuangtou Securities also benefited from the market rebound, with its wealth management transformation showing results early in 2025.

The company attributes the revenue increase mainly to “an increase in net income from agency securities trading and securities investment advisory services.” The growth in investment advisory income reflects the success of its wealth management transformation.

Under the halo, there are concerns: asset management revenue halved, and subsidiaries dragging down performance

Looking at Chuangtou Securities’ historical performance across all business lines, the most surprising in 2025 was its asset management business—traditionally a strength—whose revenue nearly halved.

In 2024, asset management revenue was 909 million yuan, up 62.67%, contributing over one-third of total revenue.

But in 2025, asset management revenue dropped sharply to 477 million yuan, down 47.55%. The decline in net income from asset management dragged down overall fee and commission income by 388 million yuan, a 28.55% decrease from 2024.

The main reason for the sharp decline in asset management revenue is attributed to the bond market environment, with lower performance fees on asset management products and a slowdown in business income.

Chuangtou Securities’ asset management business consists of three parts: the company’s own asset management, its wholly owned subsidiary Shouzheng Desheng private equity fund business, and the shareholding in China Post Entrepreneurship Fund’s public fund business. As a private equity fund manager, Shouzheng Desheng has been consistently loss-making over the past two years.

According to the annual report, in 2024, Shouzheng Desheng posted a net loss of 31.1296 million yuan, with revenue of only -684,700 yuan, both declining year-over-year.

In 2025, revenue turned positive at 632,160 yuan, but net profit remained negative, with a loss of 190.857 million yuan. Although this loss narrowed compared to 2024, it remains substantial.

In the first three quarters of 2024, affected by market volatility, private equity performance and issuance entered a “cold winter,” and the futures and derivatives strategies performed poorly, with bond strategies also underperforming. As a result, the overall private equity industry’s revenue and profit in 2024 were weak, with many firms posting losses.

However, with the market recovery after the “924 rally” in 2024, private equity market activity increased. According to China Securities Investment Fund Association data, by the end of December 2025, private fund assets under management reached a record 22.15 trillion yuan; among them, private equity funds totaled 7.08 trillion yuan. As of late November 2025, the average return of private funds over 10 billion yuan approached 30%, with over 97% of institutions showing positive returns. Against this backdrop, the nearly 20 million yuan loss of Chuangtou Securities’ private equity subsidiary in 2025 is underwhelming.

In addition to the continued losses of its private equity subsidiary, Chuangtou Securities’ futures subsidiary Kyoto Futures also dragged down performance. In 2024, revenue and profit declined, but net profit was still 1.0985 million yuan. In 2025, net profit turned into a loss of 10.3604 million yuan.

From the overall futures industry, after a sluggish 2024, performance rebounded significantly in 2025. According to data from the China Futures Industry Association, in 2025, futures companies achieved a total operating income of 42.015 billion yuan, surpassing 2024’s 41.293 billion yuan, a 1.7% increase; total net profit was 11 billion yuan, up about 16%. Under these circumstances, the decline in Kyoto Futures’ revenue and profit, with a net loss exceeding 10 million yuan, warrants reflection.