The year 2025 marked another strong period for securities firms. According to data from the Securities Association of China, 150 securities companies collectively achieved operating revenue of 541.17 billion yuan, a year-on-year increase of 19.95%. Their net profit reached 219.39 billion yuan, up 31.2% compared to the previous year.

Among listed securities firms, 42 out of 44 pure-play A-share brokerages reported year-on-year growth in net profit attributable to parent company shareholders, while 43 saw revenue increases. Eight brokerages posted net profits exceeding 10 billion yuan, indicating further industry concentration. Among the 44 firms, CITIC Securities recorded the highest revenue and net profit for 2025, while Pacific Securities had the lowest revenue and Tianfeng Securities Co.,Ltd. reported the lowest net profit.

Tianfeng Securities not only had the smallest net profit but also ranked at the bottom in terms of profitability metrics such as return on equity (ROE) and non-GAAP net profit margin. In 2025, East Money Information achieved the highest ROE among the 44 brokerages at 14.03%, while Tianfeng Securities had the lowest at just 0.61%. East Money Information also recorded the highest non-GAAP net profit margin at 72.53%, whereas Tianfeng Securities had the lowest at 6.48%.

For the full year 2025, Tianfeng Securities reported operating revenue of 2.85 billion yuan, up 5.7% year-on-year. Net profit attributable to parent company shareholders was 156 million yuan, turning around from a loss of 29.71 million yuan in the same period last year.

However, the firm's profitability remained weak and unstable. Its first-quarter 2026 report showed operating revenue of 437 million yuan, down 31.06% year-on-year. Net profit attributable to parent company shareholders was only 22,360 yuan, plunging 99.07% from a year earlier. Non-GAAP net profit stood at -34.32 million yuan, a sharp decline of 218.61%.

Several factors contributed to Tianfeng Securities' low profitability. First, the company carried a heavy historical debt burden. In 2025, its interest expense reached 2.01 billion yuan, nearly 13 times its net profit for the same period. Second, the firm continued to book substantial credit impairment losses, which exceeded 240 million yuan in 2025—more than 1.5 times its net profit. Third, its asset management business revenue fell 29.48% to 352 million yuan, while revenue from private fund operations dropped 19.21% to 150 million yuan, contributing minimally to overall earnings. Additionally, its proprietary trading business exhibited high volatility.

Compared with its local peer in Hubei province, Tianfeng Securities lagged significantly. Changjiang Securities reported a net profit of 3.70 billion yuan, while even Huayuan Securities' net profit of 202 million yuan exceeded that of Tianfeng Securities.

Tianfeng Securities also had the lowest net stable funding ratio, which fell below the regulatory warning threshold, and the lowest risk coverage ratio among the 43 brokerages (excluding East Money Information). At the end of 2025, its net stable funding ratio was 107.31%, touching the 120% warning line. Its risk coverage ratio stood at 161.42%, the lowest among peers despite being above the warning level.

Investors have expressed confusion over Tianfeng Securities' persistently low funding and risk metrics, especially given its repeated capital raises totaling 18.4 billion yuan since its listing. The company has remained in a cash-strapped and highly leveraged position.

In March 2026, the Hubei Securities Regulatory Bureau issued an administrative penalty decision, revealing regulatory violations in recent years. These violations were identified as one reason for the firm's prolonged financial strain. According to the decision, between 2020 and 2022, Tianfeng Securities provided 9.3 billion yuan in illicit financing to its former largest shareholder, Contemporary Group, using complex and concealed methods. This included using its own capital, client assets, and financing to other related parties.

The regulator fined Tianfeng Securities 15 million yuan, with total penalties against the company and relevant individuals exceeding 36 million yuan. Former chairman Yu Lei and former vice president and CFO Xu Xin were banned for life from the securities market. The Shanghai Stock Exchange also declared them permanently unfit to serve as directors, supervisors, or senior managers of securities issuers.

Additionally, Tianfeng Securities was suspended from distributing private financial products for two years, and its private fund subsidiary, Tianfeng Tianrui, was barred from launching new private fund products for one year.

Regulators stated that the case involved serious misconduct, including major shareholders abusing their rights to illegally obtain financing from the securities firm, eroding its interests, while the firm breached compliance boundaries to facilitate these activities.

In the first quarter of 2026, Tianfeng Securities reported the lowest net profit attributable to parent company shareholders among the 44 brokerages, at just 22,000 yuan. This represented a gap of over 50,000 times compared to industry leader CITIC Securities, which posted a net profit of 10.22 billion yuan.

The firm also experienced the largest declines in both revenue and net profit during the quarter. Its revenue fell 31.06% year-on-year, while net profit dropped 99.07%. Its non-GAAP net profit turned negative. The company attributed the sharp decline mainly to reduced investment income.

While many small and mid-sized brokerages saw earnings decline amid market volatility in early 2026, few experienced drops as severe as Tianfeng Securities and Guosheng Securities, where net profit fell over 97%. These smaller firms often share common traits, such as strong regional focus, homogeneous business structures, and limited capital buffers, making them more vulnerable to market downturns.