CHINA BROKERS & ASSET MANAGERS: 2H26: Capturing structural growth opportunities

Research evidence excerpt

CHINA BROKERS & ASSET MANAGERS: 2H26: Capturing structural growth opportunities

Equity Research

22 July 2026 | 8:01PM HKT

CHINA BROKERS & ASSET MANAGERS

2H26: Capturing structural growth opportunities

The four covered brokers’ A/H shares recorded returns of 17%/18% in 2Q26, with Shuo Yang, Ph.D.

+852-2978-0701 | shuo.yang@gs.com

GFS-A (+29%) and CICC-H (+22%) outperforming, while East Money (+7%) lagged. Goldman Sachs (Asia) L.L.C.

As we enter 2H26, we believe stock performance will continue to diverge, primarily Claire Ouyang

driven by capital deployment in the Hong Kong market, A-share tech IPOs, and +852-2978-6686claire.x.ouyang@gs.com|

industry M&A, alongside trends in the wealth management business. Goldman Sachs (Asia) L.L.C.

We forecast the average 2026-2027 ROE for our three covered brokers will reach

11.2%, a +145bps upward revision from our prior estimate due to a combination of

structural factors (HK capital deployment, tech investment chain participation) and

cyclical tailwinds (high A-share ADTV, IPO pipeline), compared to an 8.9% ROE in

2025. We also expect leverage to increase by 0.1x-0.3x, with net profit growth

projected at 68%/32% for 2Q26 and 2H26, respectively. Consequently, we raise our

12-month target prices by 12%-13%. For stock selection, we maintain our positive

view on CICC-H, GFS-A, and CITICS-A. This report addresses the following topics:

1. How much ROE accretion can capital deployment into Hong Kong generate? Our

scenario analysis indicates that deploying capital into Hong Kong operations

could generate an additional 0.5ppts of cumulative ROE uplift over the next

three years.

2. While A-share tech IPOs can drive earnings growth for brokers, the required

co-investments may exacerbate long-term earnings volatility (as seen in the