Guotai Haitong targets 2026 for integration after ¥6B profit

Guotai Haitong Securities set a 2026 deadline to devise a clear integration plan for its subsidiaries, including a key merger of its two asset management arms, after its first post-merger results were boosted by a ¥6 billion one-off gain.

"Building a first-class investment bank is a marathon, not a short-term sprint," Chairman Zhu Jian said at the March 31 earnings call, urging investors to look beyond the one-time profit and focus on sustainable growth.

The firm's 2025 results included a ¥254 billion net gain from trading and investment, a 72 percent year-over-year increase. Its wealth management advisory business grew to nearly ¥800 billion in assets under management, while total leverage reached 4.62 times.

The integration of Hua'an Fund and Haitong Fund is central to the strategy, aiming to combine Hua'an's diversified products with Haitong's strength in pension and bond ETFs to create a dominant player in China's asset management sector, potentially unlocking significant synergies.

Rational View on 'One-Time Gain'

Management cautioned investors to rationally view the company's strong bottom line. The reported profit included approximately ¥6 billion, after tax, from negative goodwill generated by the merger, a one-off item that will not be repeated in 2026. Chairman Zhu Jian emphasized that stakeholders should focus on the growth in net profit attributable to shareholders after deducting non-recurring items.

"Compared with top international investment banks with nearly a hundred years of history and the best practices of our most outstanding domestic peers, Guotai Haitong is still very young and there is still a considerable gap," Zhu said.

Fund Merger to Create 'Complementary' Powerhouse

A core part of the firm's five-year transition period granted by the China Securities Regulatory Commission is the consolidation of its subsidiaries. Vice President and Board Secretary Nie Xiaogang confirmed the firm is actively developing a plan to merge public fund managers Hua'an Fund and Haitong Fund.

He noted the two firms are highly complementary. Hua'an Fund has seen significant success with diversified products, with its gold ETF ranking first in the industry. Haitong Fund excels in pension asset management and its bond ETF scale has ranked first for five consecutive years. "We believe the integration of the two subsidiaries will produce very good synergies and become one of the most important subsidiaries under Guotai Haitong," Nie said.

Capitalizing on Wealth Management Boom

Amid a low-interest-rate environment in China, the firm is capturing the "deposit migration" trend into wealth products. President Li Junjie revealed that the firm's buyer-side investment advisory AUM is approaching ¥800 billion, with product holdings exceeding ¥650 billion. The company plans to enhance its global asset allocation capabilities and use an "All in AI" strategy to improve the efficiency of its advisory services.

On the trading front, the firm's ETF market-making scale surpassed ¥1 trillion in 2025, and it achieved the top ranking for market-making on the STAR Market.

Shareholder Returns a Priority

Guotai Haitong underscored its commitment to shareholder returns. In 2025, the company repurchased 67.52 million A-shares for nearly ¥1.2 billion. It also maintained a high dividend payout, with a full-year distribution of ¥0.5 per share. The combined buyback and dividend amount represented nearly 47 percent of the company's net profit after non-recurring items. Management stated it will continue to use buybacks and maintain a stable, high-payout dividend policy.

This article is for informational purposes only and does not constitute investment advice.