Guosheng Securities Inc.'s first-quarter 2026 performance has drawn significant market attention. On April 20, the firm simultaneously disclosed its 2025 annual report and a preliminary earnings report for the first quarter of 2026, revealing a stark contrast between the two periods. Net profit attributable to shareholders swung from a substantial 63.05% increase in 2025 to a dramatic 97.91% collapse in Q1 2026. Guosheng Securities attributed this sharp decline to valuation fluctuations in its heavily invested stock, High Templar Tech Limited (HTT). Concurrently, the company announced it would not distribute dividends for the 2025 fiscal year, a decision that stands in sharp contrast to the substantial payouts made by many peers in the securities industry. On April 21, Guosheng Securities' stock price fell by the daily limit, reflecting market skepticism. Industry insiders suggested this earnings disclosure exposed flaws in the company's prior investment decisions and lagging risk management, serving as a cautionary tale for the sector.

The nosedive in performance was primarily driven by the firm's concentrated position in HTT. The data showed Guosheng Securities achieved a net profit attributable to shareholders of 273 million yuan in 2025, a robust 63.05% year-on-year increase. However, profitability collapsed in the first quarter of 2026, with net profit plunging to just 1.4687 million yuan, a drop of 97.91%. In its announcement, Guosheng Securities explained the core reason was the impact of market value volatility on the HTT shares held by a subsidiary, which led to a significant reduction in total profit and net profit. As of the date the report was approved for issuance (April 17), Guosheng Securities held approximately 12.6362 million shares of HTT, making it the second-largest shareholder.

HTT, the entity resulting from the renamed New York-listed Chinese company Qudian (former ticker: QD) in December 2025, experienced a steep decline starting December 8, 2025. Its share price fell from $4.89 to $1.94, hitting a low of $1.88. By the end of Q1 2026, the stock had lost 60.33% of its value over that period. The 2025 annual report indicated that Guosheng Securities' HTT holdings resulted in a fair value loss of 83.01 million yuan. Notably, in September 2025, Guosheng Securities reclassified its Qudian equity investment from a long-term equity investment to a financial asset held for trading. Following this change, the investment was categorized as a financial asset measured at fair value through profit or loss, meaning any changes in its fair value directly impacted the income statement. This reclassification potentially amplified the volatility of Guosheng Securities' reported earnings.

It is worth noting that Guosheng Securities had announced as early as September 2025 its intention to opportunistically sell the Qudian shares to "avoid market investment risks." At that time, the announcement showed its wholly-owned subsidiary, Guosheng Hong Kong, held 12.67 million Qudian shares. Despite this stated intention to reduce the position over six months, the shareholding remained almost unchanged. According to the 2025 annual report, HTT was also the only individual stock in which Guosheng Securities had a heavily concentrated position within its financial asset investments. The delay in risk mitigation meant the company continued to bear the full brunt of HTT's sharp price decline throughout the downturn.

The day after the announcement, on April 21, Guosheng Securities' stock opened lower and continued to fall, eventually hitting the daily limit-down. It closed at 13.21 yuan per share, remaining at the跌停 limit. Beyond the sharp drop in Q1 net profit, Guosheng Securities, which was profitable in 2025, also declared it would not pay an annual dividend. Its April 20 announcement showed the parent company had 653 million yuan in undistributed profits at the end of 2025. However, the consolidated statement of undistributed profits showed a deficit of 205 million yuan, a difference of 858 million yuan. This indicates that while the parent company had distributable profits, the consolidated entity's overall undistributed profits remained negative due to losses at the subsidiary level, making a dividend distribution unfeasible.

While facing performance pressure, Guosheng Securities' management underwent several changes starting in 2025. This year was a significant historical juncture for the company's strategic transformation. Following the absorption and merger of Guosheng Securities by Guosheng Financial Holding, the parent company was formally renamed Guosheng Securities, becoming the only securities firm under Jiangxi provincial control. However, post-integration, the company experienced frequent turnover among senior executives and its research team. In response to these challenges, industry experts offered recommendations. They pointed out that for issues related to poor asset allocation in proprietary trading, there is a future need to further strengthen this business area and enhance risk control management. Diversifying investments could help mitigate risks associated with single-stock or concentrated positions. For Guosheng Securities, the key to breaking through current difficulties may lie in strategic repositioning, potentially leveraging regional industrial advantages.