In-Depth Research Report on Optimizing Asset Allocation Efficiency for CITIC Securities' 2 Trillion RMB Asset Scale

I have now collected sufficient data and information, and below is a systematic and comprehensive analysis report for you.

According to the latest released performance express report, CITIC Securities (600030.SS/06030.HK) became the first securities firm in China to enter the “2 Trillion RMB Club” in 2025[1][2]. As of the end of 2025, the company’s total assets reached RMB 2.08 trillion, representing a 21.79% increase from RMB 1.71 trillion at the end of 2024[1]. This landmark breakthrough marks that CITIC Securities has firmly ranked first among domestic securities firms in terms of asset scale, and has opened a significant gap with the second echelon.

From the perspective of driving factors for asset growth, the overall recovery of the capital market in 2025 is an important external factor promoting the company’s scale expansion. In 2025, major A-share indexes all recorded gains, market trading activity increased significantly, and investor confidence was notably enhanced[1]. CITIC Securities actively seized this market opportunity, steadily expanded its customer market scale, and drove rapid growth in revenues from brokerage, investment banking, proprietary trading and other businesses. Meanwhile, the company firmly advanced its international layout, deepened cross-border service capabilities, and achieved rapid growth in overseas revenues, further consolidating its leading position in the industry.

The 2025 performance express report shows that CITIC Securities achieved operating revenue of RMB 74.83 billion, a year-on-year increase of 28.75%; net profit attributable to parent shareholders exceeded the RMB 30 billion mark, reaching RMB 30.051 billion, a year-on-year increase of 38.46%[1][2]. This profit level not only set a new record for the company, but also made it the first securities firm in the industry with net profit attributable to parent shareholders exceeding RMB 30 billion[2]. The weighted average return on equity (ROE) reached 10.58%, an increase of 2.49 percentage points from 8.09% in the previous year, hitting a new high after the huge RMB 22.4 billion rights issue in 2022[1].

From the perspective of quarterly performance, in the first three quarters of 2025, CITIC Securities achieved operating revenue of RMB 55.815 billion, a year-on-year increase of 32.7%; net profit attributable to parent shareholders was RMB 23.159 billion, a year-on-year increase of 37.86%[1]. In terms of revenue structure, revenues from brokerage, investment banking, asset management and investment trading businesses all achieved rapid growth, showing a good momentum of balanced development.

CITIC Securities’ business layout covers the entire industrial chain of the securities industry. The company’s major holding subsidiaries include: CITIC Securities Investment Co., Ltd. (financial product investment, securities investment, equity investment, 100% owned), CITIC Jinshi Investment Co., Ltd. (industrial investment, investment consulting, management, 100% owned), CITIC Futures Co., Ltd. (futures brokerage, asset management, fund agency sales business, 100% owned), CITIC Securities South China Co., Ltd. (securities business, 100% owned), CITIC Securities Asset Management Co., Ltd. (asset management, 100% owned), and China Asset Management Co., Ltd. (ChinaAMC, asset management, 62.20% owned)[3].

Notably, as of the end of June 2025, ChinaAMC’s assets under management (AUM) reached RMB 2.85 trillion, including RMB 2.10 trillion in public fund AUM and RMB 749.285 billion in AUM from institutional and international businesses[3]. ChinaAMC maintains a leading position in the industry in terms of ETF scale, bond funds, money market funds, etc. Especially, it firmly ranks as the industry leader in equity ETFs, actively promotes the three-pillar pension business, and maintains a leading position in the REITs business.

The proprietary trading business has become the core revenue source of CITIC Securities. According to industry data estimates, the proprietary trading business (including securities investment income and fair value changes) accounts for approximately 38% of the company’s total revenue[4]. This business segment performed particularly well against the backdrop of market recovery in 2025. The company flexibly adjusted its investment asset structure based on market conditions, achieving remarkable results.

In fixed-income investment, the company continuously enriched its profit model and seized investment opportunities in the bond market; in equity investment, the company focused on reducing portfolio volatility and achieved stable returns through scientific asset allocation and risk management[3]. Throughout 2024, the CSI 300 Index and CSI 500 Index both showed upward trends. Especially after late September 2024, with the intensive introduction of policies to stabilize the capital market and macroeconomy, market sentiment improved significantly, providing a favorable investment environment for the company’s proprietary trading business.

From the perspective of investment asset structure, as of the first half of 2025, the proportion of proprietary equity securities and their derivatives to net capital under the parent company’s caliber of CITIC Securities was 26.02%, which still has sufficient room compared with the regulatory upper limit of 100%; the proportion of proprietary non-equity securities and their derivatives to net capital was 338.69%, slightly higher than the regulatory upper limit of 500%[3]. This indicates that the company is relatively conservative in equity asset allocation, while being more aggressive in non-equity (mainly bond) asset allocation.

The brokerage business is one of the variables with the greatest performance elasticity for securities firms in 2025. With the significant recovery of A-share trading and a substantial increase in market activity, CITIC Securities’ brokerage business revenue achieved rapid growth[4]. In the third quarter of 2025, the average daily turnover of A-shares reached RMB 2.1 trillion, a 67% quarter-on-quarter increase from the second quarter; the average daily balance of margin trading and securities lending reached RMB 2.0 trillion, an 18% quarter-on-quarter increase[4]. The improvement of this market environment directly drove the performance growth of securities firms’ brokerage businesses.

However, it should be noted that while market trading volume has increased, the fee rate of traditional channel business is still on a downward trend. At the policy level, there is encouragement to reduce price competition and promote the industry to accelerate transformation towards high-value-added wealth management businesses such as investment advisory services, fund agency sales and asset allocation[4]. As an industry leader, CITIC Securities has a first-mover advantage in the transformation of wealth management, and is expected to hedge the impact of declining fee rates by improving service quality and customer stickiness.

CITIC Securities’ asset management business mainly consists of two parts: its own asset management business and its holding subsidiary ChinaAMC. In terms of its own asset management business, CITIC Securities Asset Management Co., Ltd. continues to advance public-oriented transformation, and the scale of its products has steadily increased[3]. In terms of ChinaAMC, in the first half of 2025, it actively participated in major product innovation projects, maintained its leading position in the industry in terms of equity ETF scale, and achieved rapid growth in money market fund scale.

From the perspective of industry trends, securities firms’ asset management business is undergoing in-depth transformation from channel business to active management. With the basic implementation of the three-stage public fund fee rate reform and the significant recovery of new fund issuances, the asset management business has entered a new stage of high-quality development[4]. Leading securities firms, relying on their first-mover advantage in public-oriented transformation, are expected to continue to achieve double-digit growth in 2026.

In 2025, the investment banking business recovered quarter by quarter against a low base and with policy support, equity and bond underwriting recovered simultaneously, and Hong Kong stock IPOs became an important performance growth driver[4]. As a leading enterprise in the investment banking business, CITIC Securities maintains strong competitive advantages in the STAR Market, ChiNext Market and Hong Kong stock market.

Looking ahead to 2026, the improved equity market environment, the STAR Market’s “1+6” reform, the intensified M&A and restructuring policies, and sufficient project reserves of technology enterprises are expected to jointly drive further recovery of the investment banking business[4]. Meanwhile, the Matthew effect in the industry is expected to continue to strengthen, with the obvious trend of high-quality projects and co-investment revenues concentrating in leading securities firms, and CITIC Securities’ investment banking business growth rate is expected to be significantly higher than the industry average.

All of CITIC Securities’ risk control indicators continuously meet regulatory requirements and maintain a high safety margin. According to parent company caliber data as of the end of June 2025[3]:

From a vertical comparison perspective, the company’s risk coverage ratio increased from 203.44% in 2022 to 236.57% in the first half of 2025, the capital leverage ratio decreased from 17.74% to 15.55%, the liquidity coverage ratio increased from 130.53% to 162.68%, and the net stable funding ratio increased from 129.46% to 141.01%[3]. These changes reflect that the company continues to optimize its risk control and its liquidity management capabilities are continuously enhanced.

As of the end of June 2025, the company’s consolidated caliber balance of asset impairment provisions was RMB 13.371 billion, a decrease of 4.12% from the beginning of the year[3]. Specifically: the impairment provision for financial assets purchased under resale agreements was RMB 3.705 billion, a 9.20% decrease from the beginning of the year; the impairment provision for goodwill was RMB 3.521 billion; the impairment provision for accounts receivable and other receivables was RMB 2.339 billion; the impairment provision for funds lent was RMB 2.449 billion, a 6.75% increase from the beginning of the year; the impairment provision for other debt investments was RMB 0.489 billion, a 32.72% decrease from the beginning of the year. Overall, the company’s provisioning is sufficient, and asset quality remains stable.

With the growth of business scale, the company’s external financing demand has increased, mainly through multiple channels such as issuing corporate bonds, subordinated bonds, perpetual subordinated bonds, short-term corporate bonds and income certificates[3]. As of the end of 2024, the company’s total debt scale reached RMB 759.701 billion, a 20.07% increase from the end of the previous year, with short-term debt accounting for 87.35%. As of the end of September 2025, the company’s total debt scale further increased to RMB 841.185 billion, and the balance of other equity instruments increased to RMB 34.762 billion from the beginning of the year.

From the perspective of asset-liability ratio, the company’s asset-liability level has continued to grow in recent years. As of the end of September 2025, the company’s asset-liability ratio increased compared with the beginning of the year[3]. In the future, it is still necessary to continuously monitor changes in overall solvency, especially debt structure adjustment against the background of changes in interest rate environment and business expansion.

According to DuPont analysis, CITIC Securities’ ROE reached 10.58% in 2025, significantly higher than the industry average. From the perspective of DuPont decomposition, the ROE of the securities industry is mainly driven by two factors: leverage ratio and ROA (return on assets). From an international comparison perspective, the ROE of domestic securities firms is not only lower than that of the domestic banking industry (five-year average of 9.1% from 2020 to 2024), but also lower than that of the public fund industry (five-year average of 19.3%)[5][6].

CITIC Securities’ ROE of 10.58% ranks among the leading listed securities firms. According to Wind consensus expectations, CITIC Securities’ ROE is expected to reach 10.1% in 2026, while Huatai Securities’ is about 9.4% and GF Securities’ is about 9.4%[4]. Compared with international first-class investment bank Goldman Sachs (expected ROE of about 13.6% in 2026), there is still a certain gap, but the gap is narrowing[4].

From industry data, as of the end of the third quarter of 2025, the average leverage multiple (excluding client funds caliber) of listed securities firms was 3.47 times, an increase of 0.11 times from the end of the previous year and an increase of 0.13 times from the end of the second quarter[6]. This increase mainly benefited from the expansion of margin trading and securities lending and proprietary trading scales.

Compared with domestic banking industry and international first-class investment banks, domestic securities firms still have considerable room for leverage ratio improvement. International investment banks such as Goldman Sachs usually have a leverage ratio of more than 10 times, while domestic securities firms are restricted by risk regulatory indicators and insufficient historical balance sheet utilization capabilities, so capital utilization efficiency has not been fully released[5][6].

Under the differentiated regulatory framework, the potential moderate relaxation of capital space and leverage restrictions for high-quality institutions is expected to help securities firms with sufficient business demand and strong balance sheet management capabilities achieve marginal improvement in leverage ratio[5]. As an industry leader, CITIC Securities meets the conditions to be the first to benefit from marginal policy relaxation, given that its risk control indicators far exceed regulatory standards.

CITIC Securities’ current proprietary asset allocation shows obvious characteristics of “heavy on bonds, light on equities”. The ratio of proprietary non-equity securities and their derivatives to net capital is 338.69%, while the ratio of proprietary equity securities and their derivatives to net capital is only 26.02%[3]. Although this allocation structure is conducive to controlling volatility, it may miss some excess return opportunities against the background of the good performance of the equity market in 2025.

Industry trends show that securities firms are exploring transformation in major asset allocation, and increasing allocation of dividend assets through FVOCI accounts has become an industry consensus[6]. CITIC Securities can moderately increase the proportion of equity asset allocation, and at the same time expand revenue sources through client-demand businesses such as equity derivatives, so as to improve asset utilization efficiency on the premise of risk control.

CITIC Securities’ approximately RMB 2.85 trillion in assets under management through ChinaAMC, as well as its own huge customer resources, provide broad space for asset allocation. The company should strengthen the collaborative allocation of its own assets and client assets, realize leverage amplification of management capabilities through forms such as FOF and MOM, and improve overall asset allocation efficiency.

From a global perspective, international first-class investment banks have high financial market business revenue and its proportion, large balance sheet scale and strong management capabilities[5]. Chinese securities firms have gaps with international first-class investment banks in the following aspects:

1. Global Trading Capability
   : International investment banks have strong global network layout, and are more leading in overseas client reach, transaction execution efficiency, global response speed and other aspects[5].
2. Client-Demand Business Capability
   : Client-demand businesses represented by market making and derivatives are the core profit source of international investment banks. Such businesses can drive stable balance sheet expansion with low revenue volatility[5].
3. Balance Sheet Management
   : International investment banks have accumulated rich experience and established mature management systems in liquidity management, liability cost optimization, risk hedging and other aspects[5].

As the leader of domestic securities firms, CITIC Securities has made certain progress in international layout. In the first half of 2025, overseas revenue achieved rapid growth. Coupled with the good performance of the Hong Kong market, the company’s international business is gradually becoming an important second growth engine[1]. In the future, it should further enhance global trading capability and client service capability, and accelerate transformation into a global comprehensive financial institution.

CITIC Securities’ current capital leverage ratio is 15.55%, far higher than the regulatory lower limit of 8%, and all risk control indicators maintain a high safety margin. On this basis, the company can moderately increase the financial leverage ratio, expand the scale of proprietary trading business, and further release capital utilization efficiency.

From the industry trend perspective, the securities industry as a whole resumed balance sheet expansion in 2025, and the leverage level increased[6]. As a leading securities firm with the strongest risk control capability, CITIC Securities should seize the policy window and moderately expand the scale of balance sheet utilization within the compliance framework.

The company should further optimize the liability structure and reduce financing costs. Specific measures include: expanding diversified financing channels, including overseas bond issuance and equity financing; optimizing debt maturity structure to reduce excessive reliance on short-term debt; strengthening communication with institutional investors to improve market recognition and obtain more favorable financing terms.

In the first three quarters of 2025, the net interest income of listed securities firms increased by 38% year-on-year, mainly due to the decline in market interest rates reducing the cost of interest-bearing liabilities[5]. CITIC Securities should make full use of the low-interest rate environment window, optimize liability-side management, and consolidate the foundation for profitability.

With the enhanced resilience of the capital market and the market showing a slow bull trend, the importance of equity asset allocation will increase[6]. CITIC Securities can moderately increase the proportion of stock allocation in trading financial assets and equity asset allocation in OCI accounts, so as to obtain relatively certain dividend income while retaining upward investment flexibility.

From the perspective of industry practice, the scale of equity OCI of listed securities firms has increased significantly. As of the end of the third quarter of 2025, CITIC Securities’ equity OCI scale ranks among the top in the industry[6]. The company can further increase the proportion of strategic allocation of equity assets to seize long-term upward investment opportunities in the market.

Compared with directional proprietary trading businesses with high profit volatility, client-demand businesses represented by market making and derivatives can drive stable balance sheet expansion, which is the core competitiveness of leading securities firms[5]. CITIC Securities should accelerate the cultivation of multi-asset allocation capabilities, improve market perception sensitivity and the effectiveness of financial tool application, and focus on developing client-demand oriented businesses such as derivatives market making and over-the-counter product creation.

Fixed-income investment will still be an important part of CITIC Securities’ proprietary trading business, but it needs to be strategically refined and upgraded. Specific directions include: enriching the allocation of varieties such as interest rate bonds, credit bonds, and convertible bonds; strengthening credit risk research to improve credit bond investment capabilities; seizing changes in interest rate cycles to optimize duration management; exploring investment opportunities in innovative varieties such as ABS and REITs.

CITIC Securities should actively promote the integrated client service model, transforming from a single line relying on licenses to diversified comprehensive financial services driven by client needs[4]. Specific measures include: integrating business resources such as investment banking, research, brokerage and asset management to provide clients with full-life-cycle services; establishing cross-departmental collaboration mechanisms to improve client service efficiency; strengthening collaboration with ChinaAMC to leverage license advantages and provide one-stop wealth management solutions.

With the clear trend of household wealth shifting to institutionalization, the importance of institutional clients is increasing. CITIC Securities should strengthen institutional client service capabilities, and based on traditional research and trading services, provide institutional clients with full-business-chain comprehensive services such as product market making, capital introduction, custody and settlement, quantitative systems, strategy customization, and risk hedging[5].

Research report from CICC points out that securities firms have obtained investment banking licenses in multiple markets such as India, the United States, Indonesia and Thailand, to serve the overseas financing needs of Chinese enterprises and the international asset allocation needs of domestic clients[5]. CITIC Securities should accelerate overseas layout, expand cross-border business scenarios, and while serving Chinese enterprises “going global”, attract overseas investors “coming in”.

CITIC Securities should focus on enhancing multi-asset global trading capabilities, and establish a trading capability system covering multi-assets and multi-markets such as equities, fixed income, commodities and foreign exchange[5]. By building a global trading platform, upgrading trading infrastructure, and improving product pricing capabilities, it can provide domestic and overseas clients with cross-product and cross-market trading and allocation services.

Since 2025, the application of AI technology in the securities industry has continued to deepen. The application of large model technologies such as DeepSeek is reshaping the service model and operational efficiency of securities firms[4]. CITIC Securities should increase