Western Securities' first annual report after acquiring Guorong Securities is now available! What are the highlights?

How has performance been after mergers and acquisitions in the securities industry?

Recently, Western Securities released its 2025 annual report—its first “report card” after completing the acquisition of Guorong Securities. The data shows that Western Securities’ total assets first entered the “trillion-yuan club.”

However, there has been no obvious improvement in profitability indicators. In 2025, Western Securities’ operating revenue decreased by 10.84% year-on-year; while net profit attributable to shareholders of the listed company grew by nearly 25%, the growth rate was weaker than that of many other small- and medium-sized securities firms.

The annual report shows that the decline in Western Securities’ revenue is related to its bulk commodity trading business. A reporter from Securities China noted that the performance of the futures subsidiary has been under significant pressure. At the same time, Guorong Securities also saw a decline in performance, which did not provide effective support for Western Securities’ profitability.

Because the two securities firms have not yet carried out substantive business-level integration, under the “listed by business category” disclosure, Western Securities’ five major traditional business segments—including wealth management, proprietary trading, and investment banking—have not yet been included in Guorong Securities. The latter is classified under the “subsidiaries and others” category. Judging by the business structure, wealth management and proprietary investment remain Western Securities’ main income pillars, while the investment banking business recorded the largest increase.

Futures subsidiary drags down revenue

Recently, Western Securities released its 2025 annual report. Last year, the company’s operating revenue was 5.985 billion yuan, down 10.84% year-on-year—making it the only listed securities firm among those that had disclosed annual reports as of April 1 to see revenue decline.

In response, Western Securities explained that this was mainly due to year-on-year decreases in revenues and costs from its bulk commodity trading business. The announcement shows that, affected by changes in industry policies and falling market interest rates, its wholly owned subsidiary Western Futures faced operating pressure, achieving operating revenue of 1.063 billion yuan, a sharp drop of nearly 60% from 2.625 billion yuan in 2024; net profit was 15.3353 million yuan, down 38% from 24.7886 million yuan in the same period.

Western Futures stated that in 2025, facing an unfavorable operating environment, the company adhered to the “profit-oriented” working principle, strengthened the application of assessment results, and eliminated inefficient business units.

From the perspective of the industry as a whole, according to data from the China Futures Association, last year the futures companies across the country cumulatively achieved operating income of 42.015 billion yuan, up 1.7% year-on-year; cumulative net profit was 11 billion yuan, up about 16%. However, as Securities China reporters learned, the “Matthew effect” is prominent in the industry, with substantial differentiation; the investment returns of certain futures companies have significantly boosted overall industry profitability.

If subsidiary factors are excluded and calculated based on the parent-company basis, Western Securities’ operating revenue in 2025 increased by 11.97% year-on-year.

Guorong Securities’ performance declines, contribution limited

For a long time, market attention has been drawn to Western Securities’ progress and performance after acquiring Guorong Securities, and this annual report also reveals related data.

The annual report shows that after the acquisition, Western Securities significantly increased its asset scale. By the end of 2025, the company’s total assets were 121.661 billion yuan, up 26.78% year-on-year, and its net assets exceeded 30 billion yuan.

But there has not yet been any obvious improvement on the profitability side. In 2025, net profit attributable to shareholders of Western Securities grew by nearly 25%, but it lagged behind many small- and medium-sized securities firms. As of April 1, more than 10 small- and medium-sized securities firms had net profit attributable to parent company shareholders with year-on-year growth exceeding 30%.

The annual report shows that Guorong Securities’ 2025 performance declined. The company’s operating revenue was 249 million yuan, down sharply by 78% from 1.119 billion yuan in 2024; net profit was 76.0604 million yuan, down 11% from 85.529 million yuan in 2024.

Looking further, the company’s two controlling subsidiaries under Guorong Securities also did not perform well. Chuangxin Futures’ 2025 operating revenue was only 26.10 million yuan, and net profit was 5.7098 million yuan. In 2024, the figures were 128 million yuan and 21 million yuan, respectively, showing a clearly apparent decline in Chuangxin Futures’ performance.

Guorong Fund recorded operating revenue of 3.3257 million yuan in 2025, and net profit of -3.4632 million yuan. In 2024, the corresponding figures were 28 million yuan and -14 million yuan.

On its future strategic targets, Western Securities said it will continue to push forward merger and acquisition integration, following the principles of “business stability, personnel stability, and sentiment/public-opinion stability.” It will adhere to the direction that “business synergy is more important than formal integration, and capability integration is more important than scale overlay,” reduce friction costs to the maximum extent through orderly integration and gradual fusion, ensure team stability, business continuity, and risk controllability, fully release Guorong Securities’ differentiated advantages in regional markets and specialized businesses, achieve a shift in merger-and-acquisition integration from “scale overlay” to “capability leap,” and unlock the synergistic value of “1+1>2.”

In terms of IT systems, Western Securities also mentioned that it will advance four breakthrough tasks, including the integration of Guorong’s IT system.

Wealth management and investment banking show clear growth

Separating out subsidiary performance, Western Securities’ own main businesses also perform impressively.

The proprietary investment segment is the company’s largest source of revenue. In 2025, it achieved operating revenue of 1.882 billion yuan, down 8.89% year-on-year. Among them, equity-focused businesses focus on high-dividend assets, improving the OCI strategy, building a target pool and building-position plans, increasing the allocation share of related positions in relevant portfolios, and achieving dual returns from “dividends + capital gains.”

Wealth management is the second-largest income pillar. In 2025, operating revenue was 1.277 billion yuan, up 30.77% year-on-year. The company opened more than 200,000 new accounts last year, up 72%; the number of institutional business clients steadily grew, and assets surpassed the 1 trillion mark, up 26%. In terms of product distribution and asset custody/holdings, the size of publicly offered fund holdings increased by 6.16% year-on-year, distribution income rose by 28.26% year-on-year, and the scale of equity ETFs increased by 24.42% year-on-year.

Investment banking is the segment with the largest revenue growth for Western Securities in 2025, with revenue of nearly 390 million yuan and a sharp increase of 42.09% year-on-year. In equity businesses, the company completed 1 listed company refinancing and 3 M&A restructuring projects; in the bond business, the company obtained approval as a lead underwriter in the interbank market, opening up new growth space. Throughout the year, it underwrote and issued 174 bonds, with an underwriting scale of 63.563 billion yuan—up 61.11% and 14.24% year-on-year, respectively—keeping its market share firmly at first place across the province.

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