The year 2025 proved to be another strong period for securities firms. According to data from the Securities Association of China, 150 brokerages achieved total operating revenue of 541.171 billion yuan, a year-on-year increase of 19.95%, while net profit reached 219.439 billion yuan, up 31.2%. Among listed brokerages, 42 out of 44 A股-listed pure securities firms reported year-on-year growth in net profit attributable to parent company shareholders, and 43 saw revenue growth. Eight brokerages posted net profits exceeding 10 billion yuan, indicating further industry consolidation.

All 44 A股-listed securities companies have recently completed their annual report disclosures. Among them, CITIC Securities recorded the highest revenue and net profit for 2025, while Pacific Securities had the lowest revenue and Tianfeng Securities the lowest net profit. Guolian Min Sheng saw the fastest revenue growth at 185.99%, whereas Western Securities experienced the largest revenue decline of 10.84%. Tianfeng Securities reported the fastest growth in net profit attributable to parent company shareholders, turning a profit with a 624.52% year-on-year increase. Conversely, First Capital Securities Co.,Ltd. saw the largest decline in this metric, dropping 6.89%.

In 2025, First Capital Securities achieved total operating revenue of 3.686 billion yuan, a 4.37% year-on-year increase, marking a record high since its listing. However, net profit attributable to shareholders of the listed company was 841 million yuan, a decrease of 6.89% year-on-year. This 6.89% decline was the largest among the 44 listed brokerages, making it one of only two firms to report a drop in net profit for the year, the other being Pacific Securities.

In terms of industry competitive landscape, First Capital Securities' revenue and net profit scale place it in the lower-middle tier among listed brokerages. Its revenue ranked 31st among the 44 firms in 2025, while its net profit attributable to parent company shareholders ranked 37th, placing it eighth from the bottom.

The lower net profit ranking compared to its revenue ranking is partly linked to the company's revenue growth but net profit decline. Why did First Capital Securities experience a net profit drop during a generally prosperous year for brokerages? The annual report did not provide an explanation.

Segment reports indicate that the investment banking division of First Capital Securities reported a negative profit in 2025, which likely contributed to the net profit decline. Additionally, a significant decrease in revenue and profit margin from the fixed income business was another major factor.

In 2025, revenue from the fixed income business at First Capital Securities was only 323 million yuan, a sharp decline of 49.94% year-on-year, primarily due to a drop in bond trading and investment income. The profit margin for this business fell by 20.07 percentage points.

Furthermore, total operating revenue from private equity fund management and alternative investment businesses decreased by 87.3473 million yuan year-on-year, a decline of 326.67%, which the company attributed mainly to reduced fair value gains from investment projects.

Investment banking revenue at First Capital Securities was 240 million yuan in 2025, up 6.63% year-on-year. However, the operating profit margin for this segment was -11.18%, indicating a loss. This means that for each underwriting deal, after deducting costs, the business was unprofitable.

A penalty of nearly 17 million yuan imposed on First Capital's investment banking subsidiary further worsened the segment's financial condition. The company's 2025 financial report disclosed a significant 241.97% year-on-year increase in non-operating expenses, partly due to the administrative penalty received by its wholly-owned investment banking subsidiary.

The penalty stemmed from events beginning in 2019. In December of that year, Hongda Industrial Co., Ltd. completed a convertible bond issuance totaling 2.42678 million bonds, raising 2.427 billion yuan, with First Capital's investment banking arm acting as the sponsor and lead underwriter.

Subsequent investigations by the Jiangsu Regulatory Bureau found that between December 31, 2019, and July 23, 2020, Hongda Industrial improperly altered the use of raised funds from the 2019 issuance, involving up to 1.691 billion yuan—69.6% of the total amount raised. These funds were primarily used by the controlling shareholder, Hongda Industrial Group, and its affiliates through fabricated trade contracts and falsified payment documents.

Furthermore, from 2020 to 2023, Hongda Industrial engaged in continuous financial fraud, inflating revenue and understating costs, cumulatively overstating total profits by 4.078 billion yuan. This case represents one of the most severe financial fraud incidents in the capital market in recent years.

In September 2023, Hongda Industrial was placed under investigation by the China Securities Regulatory Commission for suspected information disclosure violations; it faced mandatory delisting in January 2024 and was officially delisted on March 18, 2024. In June 2025, the company was found to have engaged in multi-year financial fraud, overstating profits by over 4 billion yuan, resulting in total fines of 57.8 million yuan for the company and related responsible individuals.

On October 29, 2025, the CSRC formally initiated an investigation into First Capital's investment banking subsidiary. On December 7, the subsidiary received a prior notice of administrative penalty, and on December 24, it officially received the penalty decision.

The penalty decision cited three violations: first, insufficient review of the use and repayment of raised funds; second, failure to issue proper review opinions, leading to false records in ongoing supervision documents; and third, failure to fulfill supervision and reporting obligations as required. Based on these findings, the Jiangsu Regulatory Bureau determined that the subsidiary violated the Securities Law by failing to perform its duties diligently. The penalty involved confiscation of sponsorship revenue of approximately 4.2453 million yuan and a fine three times that amount, about 12.7358 million yuan, totaling nearly 17 million yuan. The project sponsors, Fan Benyuan and Song Yao, were each warned and fined 1.5 million yuan.

In 2025, East Money Information recorded the highest return on equity (weighted) at 14.03%, while Tianfeng Securities had the lowest at 0.61%. Changjiang Securities saw the largest increase, rising 4.94 percentage points to 10.02%, whereas First Capital Securities experienced the largest decrease, falling from 5.80% to 5.01%, a drop of 0.79 percentage points.

Compared to leading brokerages, CITIC Securities reported an ROE above 10% in 2025, while Huatai Securities and GF Securities generally had ROEs between 8% and 10%. First Capital Securities' ROE of 5.01% is relatively low within the industry, below the average of 6.97% for the 44 listed brokerages in 2025.

In 2024, First Capital Securities' ROE exceeded the industry average of 5.4%, but in 2025, it fell below the peer average despite an overall industry improvement. The company's ROE declined by 0.79 percentage points, while the average ROE for the industry increased by 1.57 percentage points during the same period.

The decline in ROE was driven by two factors: a 6.89% contraction in net profit (from 904 million yuan to 841 million yuan) and a 6.04% expansion in net assets (from 16.306 billion yuan to 17.290 billion yuan).