Guotai Huatong Adds CNY 3.5 Billion; Securities Firms Intensively Increase Capital in Subsidiaries, Differentiated Layout in Alternative Investment Track

Since the beginning of this year, securities firms have frequently increased their capital in subsidiaries across various businesses, including futures, funds, wealth management, and international operations.

Recently, Guotai Haitong Securities announced an additional capital injection of 3.5 billion yuan into its futures subsidiary, while Dongwu Securities, Hu’an Securities, Guolian Minsheng Securities, Huatai Securities, and GF Securities have also intensified their investments in subsidiaries related to futures, funds, wealth management, and overseas businesses, continuously supplementing net capital and strengthening their business layouts.

In February, a report by 21st Century Business Herald noted that two regional securities firms’ capital increases to expand into the wealth management sector drew industry attention: one was Guolian Minsheng Securities’ initial capital increase into its wealth subsidiary Minsheng Securities, and the other was Hu’an Securities’ capital increase to control Huafu Fund and obtain a public offering license.

In stark contrast, securities firms have adopted a cautious approach toward alternative investment subsidiaries. Several firms, including Cinda Securities, Guodu Securities, and Dongxing Securities, have reduced capital or deregistered their alternative subsidiaries, reflecting a clear industry segmentation in strategic deployment.

Industry insiders say that the frequent capital injections into futures and wealth management subsidiaries help expand business scale and improve service efficiency for the real economy, while also optimizing strategic layouts and enhancing business synergy. Conversely, the cautious stance on alternative investment subsidiaries is a rational choice based on risk-return considerations, capital efficiency, and business focus adjustments, demonstrating a more focused and stable industry resource allocation.

3.5 Billion Yuan Boost for Futures Business

Recently, Guotai Haitong announced plans to inject 3.5 billion yuan into its subsidiary Guotai Junan Futures to replenish net capital. The board authorized management to handle the capital increase in multiple tranches based on the actual funding needs of Guotai Junan Futures.

Guotai Junan Futures, a wholly owned subsidiary of Guotai Haitong, is a leading futures firm, consistently ranking in the top tier in revenue, net profit, client base, and market share over the years.

This is not the first capital increase for Guotai Junan Futures in the past year. In May 2025, the company increased its capital by 1.5 billion yuan, raising its registered capital to 6 billion yuan. If the current 3.5 billion yuan is approved, the total increase within a year will reach 5 billion yuan.

A review by 21st Century Business Herald suggests three main reasons for this capital increase: first, rising regulatory thresholds for net capital—amendments to the Futures Company Supervision Measures require higher net capital for market-making and OTC derivatives businesses, with the capital increase aimed at meeting compliance and operational benchmarks; second, consolidating industry leadership—Guotai Junan Futures’ total client assets and market share remain industry-leading, and the additional capital will further widen the gap with peers, reinforcing its top-tier position; third, strategic positioning with dual futures licenses—after integration, Guotai Haitong holds both Guotai Junan Futures and Haitong Futures licenses, with the capital increase clarifying Guotai Junan Futures as the core platform for the group’s futures business, promoting resource concentration and business integration.

Currently, Haitong Futures’ registered capital is only 1.302 billion yuan, far less than Guotai Junan Futures. The China Securities Regulatory Commission has stated that Haitong Futures should supervise Guotai Junan and Shanghai International Group to complete their integration in a timely and orderly manner as per submitted plans.

Besides Guotai Haitong, in December 2025, Dongwu Securities also announced a 402 million yuan capital increase into Dongwu Futures, raising its registered capital to 1.532 billion yuan. The company stated that this transaction would optimize its overall business structure and enhance capital market services. Earlier, in March 2025, Orient Securities increased its stake in Orient Futures by 500 million yuan.

Expanding Wealth Management and Overseas Markets

Beyond futures subsidiaries, securities firms have accelerated capital increases in fund, wealth management, and international subsidiaries this year.

In February, a report by 21st Century Business Herald highlighted that two mid-sized regional securities firms’ capital expansion into wealth management attracted industry attention: Guolian Minsheng Securities (601456.SH) made its first capital increase into its wealth subsidiary Minsheng Securities, and Hu’an Securities increased its stake in Huafu Fund and obtained a public offering license.

Sun Ting, Chief Analyst of Non-Banking Financials at Dongwu Securities, pointed out that establishing wealth or asset management subsidiaries, or holding stakes in public funds, are key strategies for securities firms to enhance asset management capabilities and strengthen their wealth management investment and product offerings.

The different approaches of Guolian Minsheng Securities and Hu’an Securities reflect how each firm leverages its resources to explore differentiated wealth management transformation models.

Meanwhile, as securities firms accelerate their overseas expansion and cross-border business development, increasing capital in international subsidiaries and strengthening overseas capital strength have become common industry practices. Hong Kong, as an important hub for mainland securities firms’ internationalization, has seen increased capital injections into its Hong Kong subsidiaries, becoming a key move to promote overseas business.

Since January, two leading firms have successfully completed fundraising to support overseas development. GF Securities raised over HKD 6 billion, intended entirely for capital injections into overseas affiliates; Huatai Securities raised net funds of HKD 9.925 billion, to be used for overseas business growth and operational capital.

In February, approvals for international (Hong Kong) subsidiaries’ capital increases and new establishments were granted. On February 10, Northeast Securities was approved to establish Dongzheng International Financial Holding Limited in Hong Kong with a HKD 500 million investment; on the same day, Hu’an Securities’ wholly owned subsidiary, Hu’an Securities (Hong Kong) Financial Holding Limited, received approval for a HKD 500 million capital increase. On February 12, Dongwu Securities’ wholly owned subsidiary, Dongwu Securities (Hong Kong) Financial Holding Limited, was approved for a capital increase of up to HKD 2 billion, aimed at expanding overseas operations.

Market analysts believe that with the adjustment of A-share IPO pace and increased activity in Hong Kong’s primary and secondary markets, Hong Kong is becoming an important platform for mainland securities firms to expand cross-border business and boost performance. However, the competitive landscape in Hong Kong is more diverse, with mainland subsidiaries facing not only peer competition but also challenges from international investment banks and local Hong Kong firms, adding pressure to Chinese firms’ overseas expansion.

Differentiated Strategies in Alternative Investment Subsidiaries

Alternative investment subsidiaries are core platforms for securities firms’ equity investments and sponsorships. Capital movements in these subsidiaries serve as important indicators of strategic deployment. Additionally, alternative investments are a significant part of securities firms’ equity wealth management.

In recent years, the deployment of alternative investment subsidiaries has shown clear segmentation: some firms have been reducing or deregistering these subsidiaries, while others are increasing capital or establishing new ones, reflecting deep strategic considerations in resource optimization and business focus.

On the evening of March 9, Cinda Securities announced that its wholly owned subsidiary, Cinda Xinrui Investment Co., Ltd., had completed deregistration. Public data shows that in the first three quarters of 2025, Cinda Xinrui posted a net loss of 2.4697 million yuan, likely a major reason for its deregistration.

On the same evening, Guodu Securities also announced that its alternative subsidiary, Guodu Jingrui Investment (Beijing) Co., Ltd., had completed capital reduction and business registration changes, reducing registered capital from 3 billion yuan to 100 million yuan, with a name change. The company stated that this capital reduction was part of resource integration and optimization based on business development plans, aiming to improve capital efficiency and overall operational effectiveness.

Beyond Cinda and Guodu, a review indicates that since 2025, many securities firms, mainly small- and medium-sized, have adjusted their alternative subsidiaries’ capital, including Dongxing Securities, Zhongshan Securities, Zhongyuan Securities, and Northeast Securities.

However, some firms continue to increase capital or establish new subsidiaries in alternative investments, seeking market opportunities. For example, in October 2025, Guohai Securities announced a 500 million yuan capital increase into Guohai Securities Investment Co., Ltd., raising its registered capital to 1.5 billion yuan to enhance its capital strength and core competitiveness. In November, Jinyuan Unified Securities was approved to set up a subsidiary engaged in alternative investments, focusing on participation in ChiNext, STAR Market, and Beijing Stock Exchange projects, as well as equity investments in Taiwanese-controlled enterprises.

Other firms like Caitong Securities and Century Securities also increased their investments in alternative investments through capital increases or new subsidiaries in 2025. Zhongtai Securities and Nanjing Securities have also committed funds in their private placement plans to support related businesses.

Industry analysts believe that the apparent divergence in capital deployment among alternative subsidiaries reflects rational strategic adjustments based on each firm’s capital strength, market environment, and regulatory guidance. For firms reducing or deregistering subsidiaries, the main reasons include underperformance, project returns below expectations, longer exit cycles, and new legal and regulatory requirements for registered capital and net capital, prompting resource reallocation to core businesses. Conversely, leading and specialized firms see long-term opportunities in equity investments and STAR/ChiNext follow-on investments, boosting their research, project management, and competitive differentiation through capital supplementation to achieve synergies with investment banking and other businesses.