The brokerage sector has experienced a long-awaited earnings recovery since 2025. Driven by improved trading activity and enhanced market risk appetite, most listed securities firms have seen varying degrees of performance rebound, allowing the industry to move past a prolonged period of pressure. However, unlike previous cyclical recoveries where performance rose uniformly with market upswings, a clearer trend is emerging this time: while profits are recovering, divergence within the sector is intensifying.
The market is no longer focused solely on revenue scale but is increasingly prioritizing profit quality, resilience to economic cycles, and strategic execution. 2025 marks a pivotal year for the brokerage industry, transitioning from "scale expansion" to "value reconstruction." The competitive logic is shifting from relying on "bull market elasticity" to building "structural capabilities." As earnings recovery becomes commonplace, the real differentiators are deeper competencies in profit structure, client operations, and global resource allocation.
Brokerages are moving away from being highly dependent on market conditions and are instead generating income through structural advantages. Traditionally, proprietary trading acted as the primary profit engine. While successful market bets could yield outsized returns in favorable conditions, this model also carried high uncertainty, with profits fluctuating sharply amid market volatility.
Over the past year, increased market turbulence has exposed the fragility of traditional proprietary models. The industry has recognized that stable, sustainable profitability is more critical to long-term value than short-term high growth. This shift is reflected in the key industry metric Return on Equity (ROE). In 2025, the divergence in ROE among listed brokerages widened further. Firms capable of maintaining relatively stable profit levels are gaining greater market recognition, even as overall industry ROE remains under pressure. ROE has evolved from a mere financial indicator into a crucial measure of a firm's ability to navigate economic cycles.
By March 30, 26 listed securities firms or entities had released their 2025 annual results. Against a backdrop of active capital markets, all 26 reported year-on-year growth in net profit attributable to shareholders, indicating sustained high industry sentiment. Some leading firms delivered results exceeding expectations. For instance, China International Capital Corporation Limited (CICC) saw its attributable net profit surge by 71.93% year-on-year, serving as a notable case study of evolving profit models.
According to CICC's 2025 annual report, its ROE reached 9.39%, a significant improvement from 5.52% in 2024—an increase of 3.87 percentage points. Compared to the industry average, which saw an ROE increase of 1.77 percentage points based on data from 15 brokerages by March 27 (as per a Shenwan Hongyuan non-bank financial weekly report), CICC's improvement was substantially higher.
A deeper analysis of its profit structure reveals that this performance stems from a systematic optimization of revenue streams, not reliance on high-risk bets in a single business line. On one hand, CICC has strengthened its client-demand-oriented business layout, significantly increasing the proportion of "client-driven businesses" like derivatives and cross-border services. Its overseas business revenue grew 58% year-on-year in 2025, accounting for nearly 30% of total revenue. In derivatives, its equity business serves over 15,000 domestic and international investors, ranked first in Hong Kong stock placement size, maintained the top position in QFII business for the 22nd consecutive year, and led among Chinese brokers in Stock Connect trading share. In fixed income, as the only Chinese investment bank to have served the Ministry of Finance in issuing offshore sovereign bonds for nine consecutive years, CICC became one of the first market makers for Bond Connect northbound repo, solidifying its international capabilities.
On the other hand, CICC has effectively controlled profit volatility by reducing reliance on directional investments. Data shows its product custody scale exceeded 460 billion yuan, with buyer-side investment advisory assets under management (AUM) surpassing 130 billion yuan, a record high. In asset management, the department's AUM reached 596.9 billion yuan, and CICC Funds' AUM grew 25% year-on-year to 273.4 billion yuan. In a volatile equity market, these client-centric businesses help hedge against market risks and smooth the overall profit curve.
The deeper implication is that brokerage profit sources are shifting from "market dividends" to "capability dividends." True competitiveness is determined by having a replicable, synergistic comprehensive capability system. The integrated advantage of "Investment + Investment Banking + Research" is reshaping competitive logic. Previously, these three functions often operated in silos. In the era of "patient capital," they need to synergize: the investment side identifies quality companies and provides long-term capital support; investment banking accompanies corporate growth with full lifecycle services; and research offers deep industry insights for corporate strategy and investor decision-making. This trinity of capabilities is not easily replicated and, once established, forms a significant competitive barrier.
In 2025, CICC, serving national strategic development, actively seized market opportunities, leveraged its integrated "Investment + Investment Banking + Research" advantages, and steadily improved financial service quality and efficiency, achieving robust growth in core segments like investment banking, equity business, and wealth management.
Across the industry, the divergence in proprietary business performance was pronounced in 2025. Some firms still reliant on traditional directional investments experienced significant profit swings with market volatility, while those that completed the transition to client-driven models demonstrated stronger profit stability. The primary dividing line among brokerages is no longer "who earns more" but "whose profits are more stable and whose profit structure is healthier."
While restructuring the profit structure addresses "how money is made," the transformation of wealth management business concerns "where the money comes from." For years, brokerage wealth management heavily relied on a "product distribution" model, earning channel fees from selling mutual funds and financial products, driving revenue through scale expansion. This model yielded substantial returns during market upswings but was essentially a "volume business" with low client stickiness and high revenue volatility.
2025 was a critical year for the wealth management transition from "product distribution" into the deeper phase of "buyer-side investment advisory." The "volume model" relying solely on growth in fund distribution custody sizes is becoming unsustainable. Those who can genuinely establish an "account management" model centered on client portfolio returns will secure future growth. The industry widely recognizes that the core of wealth management is no longer "selling products" but "managing accounts."
This shift is changing the revenue structure. Fee models based on client AUM and account returns are gradually replacing one-time sales commissions, providing a more stable income source. This business model, built on "trust" and "service," gives wealth management业务 stronger anti-cyclic capabilities.
As a leading firm, CICC's changes are representative. Its annual report shows the wealth management product custody scale achieved positive growth for the sixth consecutive year, exceeding 460 billion yuan, with buyer-side investment advisory AUM surpassing 130 billion yuan, a record high. Its flagship offering "China 50" generated over 10 billion yuan in client收益 in 2025, with over 99% of specialized accounts held for more than one year being profitable. After upgrades, it formed a "50 Service Matrix" covering different client segments, cumulatively serving over 450,000 clients with signed client assets exceeding 400 billion yuan.
By the end of 2025, CICC's wealth management total client count approached 10 million, with total client account assets reaching 4.28 trillion yuan. More importantly, its business model is shifting from单一 product sales to solution-oriented asset allocation services. Clearly, future competition will not be about "who sells more" but "who manages better."
Industry-wide, wealth management is undergoing a profound shift from "customer acquisition" to "customer retention." Previously, growth primarily depended on inflows of new clients and new capital, a "monetizing traffic" model. As client growth slows and competition intensifies, relying solely on incremental drivers is becoming untenable. In 2025, more brokerages realized that real growth potential lies in the deep operation of existing clients—ensuring client assets "are retained, well-managed, and generate returns."
With the pilot program for fund investment advisory formally becoming a常规 business in 2025, the institutional foundation for the wealth management industry is set. The subsequent test is whether brokerages can truly build a client-centric service system, including the professional capability of investment advisor teams, the maturity of asset allocation models, and the long-term accumulation of client trust. Building these capabilities takes time, but once established, they become a core competitiveness difficult to replicate.
Beyond profit structure and client operations, another dimension creating divergence is a brokerage's internationalization capability. Previously, international business was often seen as a "strategic layout"—important but with limited short-term contribution. In many institutions, overseas operations were still exploratory, contributing little to overall revenue and performance.
This is changing. As Chinese companies "go global" and demand for global capital allocation rises, the importance of cross-border investment financing and global asset allocation businesses is increasing. However, the barriers to entry in this field are high. Most brokerages remain at the "channel-based" service stage in international business, lacking core pricing power and global client networks, making their income susceptible to external changes.
Nevertheless, some leading firms have significantly increased the proportion of international revenue, possessing advantages in cross-border investment banking and trading capabilities, particularly in Hong Kong stocks, US-listed Chinese stocks (中概股), and cross-border financing.
Taking CICC as an example, its 2025 overseas business revenue grew 58% year-on-year, accounting for nearly 30% of total revenue. This international capability results from long-term布局. In 2025, its equity business served over 15,000 investors globally, ranked first in Hong Kong stock placement, maintained the top spot in QFII for 22 years, and led among Chinese brokers in Stock Connect share. In fixed income, as noted, it strengthened its international service network. In cross-border financing, CICC completed several landmark projects in 2025, consolidating its leading position.
From a differentiation perspective, disparities in internationalization capability are becoming a significant dividing line. Brokerages with global pricing power can take initiative in cross-border capital flows and access more high-quality business opportunities, while those lacking such capability may miss out in this round of global capital reallocation.
Reflecting on the brokerage industry in 2025, the earnings recovery is important, but the structural changes behind it are even more noteworthy. As "earnings recovery" becomes an industry commonality, the real gap is determined by differences in "structural capability." Brokerages that can reduce dependence on market cycles, establish stable profit structures, genuinely transition wealth management towards "account management," and possess global pricing power to serve cross-border capital flows will gain the upper hand in the new round of industry differentiation.
2025 marks a turning point for the brokerage industry, shifting from "scale expansion" to "value reconstruction." The endpoint of this transition will be a complete重塑 of competitive logic—moving from "business differentiation" to "capability stratification," and from "depending on market conditions" to "capability being king."