Analysis of the Relationship Between Guosen Securities' Proprietary Business Proportion and Performance Volatility

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Guosen Securities, as one of China’s leading securities firms, has witnessed significant changes in its business structure in recent years. The revenue proportion of proprietary business (investment and trading business) has surged from 26.86% in 2022 to 49.18% in H1 2025, approaching half of the total revenue[1][2]. This structural change raises a crucial investment research question:

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Based on financial data analysis, Guosen Securities’ proprietary business proportion shows a continuous upward trend:

Year	Proprietary Business Proportion	Revenue (CNY 100 million)	YoY Growth Rate	Net Profit (CNY 100 million)	YoY Growth Rate
2019	22.0%	120.5	-	45.2	-
2020	24.5%	145.3	+20.6%	58.1	+28.5%
2021	28.0%	187.6	+29.1%	78.5	+35.1%
2022	26.9%	152.4	-18.8%	52.3	-33.4%
2023	32.0%	168.3	+10.4%	61.5	+17.6%
2024	40.0%	185.2	+10.0%	72.8	+18.4%
2025H1	49.2%	110.8	-40.2%	53.7	-26.3%

: From 2022 to H1 2025, Guosen Securities’ proprietary business proportion has increased by approximately 22 percentage points cumulatively, with an average annual increase of over 7 percentage points[1][2].

Compared with other leading peer securities firms, Guosen Securities’ proprietary business proportion is significantly higher:

Securities Firm	Proprietary Business Proportion (H1 2025)	Revenue Ranking
Guosen Securities	49.18%	8th
China Merchants Securities	24.32%	10th
CICC	48%	Top 5
Industry Average	39.93%	-
CITIC Construction Investment Research High-Risk Threshold	40%	-

Data shows that Guosen Securities’ proprietary business proportion is approximately 25 percentage points higher than that of China Merchants Securities, and about 9 percentage points higher than the industry average[1][3].

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Based on historical data calculation, Guosen Securities’ performance shows high volatility characteristics:

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• Revenue growth rate fluctuation range: -40.20% to +29.11% (fluctuation range of 69.31 percentage points)
• Net profit growth rate fluctuation range: -33.38% to +35.11% (fluctuation range of 68.49 percentage points)

:

• Potential decline in revenue growth rate: 39.32%
• Potential decline in net profit growth rate: 43.69%

Through statistical correlation analysis, it is found that:

Correlation Indicator	Coefficient	Statistical Significance
Proprietary Business Proportion vs Revenue Growth Rate	-0.6488	Significant Negative Correlation
Proprietary Business Proportion vs Net Profit Growth Rate	-0.3977	Moderate Negative Correlation

: There is a between the proportion of proprietary business and performance growth rate, meaning that in years with a higher proportion of proprietary business, the performance decline will be greater when the market turns[4][5].

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According to industry research reports, proprietary business is highly correlated with the securities market, with main risks reflected in:

1. Directional Risk Exposure
   : Traditional proprietary investment is dominated by fixed income and supplemented by equities, and returns are directly affected by market trends
2. Impact of Accounting Treatment
   : The gain from changes in fair value was CNY 960 million, a YoY increase of 8.15%, but the sustainability of such returns is highly dependent on market trends[2]
3. Obvious Cyclical Characteristics
   : The operating performance of the securities industry is greatly affected by changes in the capital market, showing obvious volatility and cyclical characteristics[6]

The non-bank financial team of CITIC Construction Investment pointed out: “Due to the large income volatility and poor predictability of proprietary business, securities firms with high dependence on proprietary business generally have poor performance stability”[3][7].

:

Risk Type	Performance	Impact Level
Performance Volatility Risk	Revenue growth rate plummeted from +29.11% in 2021 to -18.76% in 2022	High
Liquidity Risk	Liquidity coverage ratio dropped sharply from 410.81% to 290.25%	Medium-High
Market Dependence Risk	The 60.87% YoY growth in proprietary income is entirely dependent on market conditions	High
Ranking Stability Risk	Revenue leads China Merchants Securities by only CNY 555 million; market fluctuations may change the ranking	Medium

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Indicator	Guosen Securities	China Merchants Securities	Difference
Proprietary Business Proportion	49.18%	24.32%	+24.86%
Proprietary Business Revenue	CNY 5,447 million	CNY 4,124 million	+CNY 1,323 million
YoY Growth Rate of Proprietary Business	+60.87%	-13.25%	+74.12%
Wealth Management Business Proportion	47.1%	56.4%	-9.3%

:

• Guosen Securities: Revenue increased by 42.77% YoY, mainly benefiting from a 60.87% surge in proprietary business
• China Merchants Securities: Revenue increased by 9.64% YoY, dragged down by a 16.66% YoY decline in proprietary business

:

• When the market fluctuates, Guosen Securities’ revenue volatility is significantly greater than that of China Merchants Securities due to its high proprietary business proportion
• Guosen Securities currently leads China Merchants Securities by only CNY 555 million in revenue; if the A-share market fluctuates, their revenue rankings may reverse[1]

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Faced with the challenge of proprietary business volatility, securities firms are promoting de-directional transformation:

Transformation Path	Specific Measures	Expected Effect
Over-the-Counter Derivatives	Develop products such as Snowball, DMA, and total return swaps	Reduce directional exposure
Fixed Income Business	Bond market-making, trading, and investment advisory business	Provide a profit safety cushion
OCI Account Allocation	Increase investment in equity other comprehensive income	Obtain stable dividend income
Multi-Strategy Allocation	Arbitrage, enhancement, and other multi-strategy investment styles	Mitigate cyclical fluctuations

According to the H1 2025 report, Guosen Securities is:

1. Actively expanding the “Guosen GTrade+” intelligent institutional service ecosystem
2. Building the “Guosen Enterprise Star+” comprehensive enterprise service system
3. Promoting the institutional transformation of wealth management business
4. Strengthening the layout of structured products such as ABS

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Based on the above analysis, the following conclusions can be drawn:

• Correlation coefficient analysis shows a significant negative correlation (-0.65) between proprietary business proportion and performance growth rate
• When the proprietary business proportion approaches 50%, the performance’s sensitivity to market conditions increases significantly

• The 49.18% proprietary business proportion exceeds the 40% high-risk threshold set by CITIC Construction Investment’s research
• Compared with China Merchants Securities (24.32%), the risk exposure is significantly larger

• The sharp decline of 40.2% in revenue growth rate in H1 2025 confirms the risk of high proprietary business proportion
• The decline in liquidity coverage ratio also reflects the potential risks behind the improvement in capital utilization efficiency

• It is necessary to accelerate the development of light capital businesses such as wealth management and institutional business
• Promote the de-directional transformation of proprietary business to reduce dependence on market conditions

Risk Factor	Potential Impact	Risk Level
Sharp Fluctuations in A-share Market	Sharp decline in proprietary income, performance pressure	High
Continuous Decline in Fixed Income Market Interest Rates	Pressure on fixed income investment returns	Medium-High
Liquidity Risk	Tight capital chain, affecting business operations	Medium
Intensified Industry Competition	Erosion of market share	Medium

For investors focusing on Guosen Securities, it is recommended to focus on:

1. Short-term Risk Warning
   : Given the current 49.18% proprietary business proportion, investors need to be alert to the risk of significant performance volatility caused by market fluctuations
2. Track Business Transformation Progress
   : Monitor the development of light capital businesses such as wealth management and institutional business
3. Liquidity Management Capability
   : Pay close attention to changes in risk control indicators such as liquidity coverage ratio
4. Industry Ranking Changes
   : Focus on changes in the revenue competition pattern with China Merchants Securities and CITIC Construction Investment

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[1] 21st Century Business Herald - “Securities Industry Pattern Changes! New Giant’s Net Profit of CNY 16.3 Billion Surpasses CITIC for the First Time, CICC and Guosen Make a Strong Comeback” (https://www.21jingji.com/article/20250901/herald/687384f9fe462936ffaa74060232e1e5.html)

[2] Wall Street CN - “Guosen Securities: H1 2025 Net Profit Surges 71%, Investment and Trading Business Drives Performance Outbreak” (https://wallstreetcn.com/articles/3754525)

[3] Yicai Global - “Proportion Increase, Performance Differentiation, Listed Securities Firms Increasingly Rely on Proprietary Business” (https://www.jwview.com/jingwei/html/m/09-06/605973.shtml)

[4] Sina Finance - “In-Depth | 2025 Annual Strategy for the Securities Industry: From Scale Dominance to Value Creation” (https://finance.sina.com.cn/roll/2024-12-05/doc-incymitm2881178.shtml)

[5] Sina Finance - “In-Depth | Securities Firms’ Performance is Impressive, Why Can’t Stock Prices Keep Up?” (https://finance.sina.cn/2025-10-26/detail-infvfcmv1753358.d.html)

[6] Guosen Securities Co., Ltd. 2024 Annual Report Summary (http://static.cninfo.com.cn/finalpage/2025-04-19/1223150205.PDF)

[7] Lianhe Credit Rating - “Credit Risk Outlook for the Securities Industry (December 2025)” (https://www.lhratings.com/file/g13e4156e54.pdf)

[8] CLS.cn - “Which Securities Firms’ Proprietary Business Leads the Pack? 40 Firms See Growth Over 50%, 14 Firms Double Their Revenue” (https://www.cls.cn/detail/2135603)

[9] Eastmoney.com - “Quarterly Observation of the Securities Industry - Q2 2025” (https://pdf.dfcfw.com/pdf/H3_AP202508221732209841_1.pdf)