Going Global to Strengthen Capital! GF Securities Injects Over 6.1 Billion into Hong Kong Subsidiary

On the evening of March 12, GF Securities (000776) announced that it plans to increase its capital in its wholly-owned subsidiary GF Holdings (Hong Kong) Limited (“GF Hong Kong”) by up to HKD 6.101 billion. This significant move will not only greatly strengthen GF Hong Kong’s capital base but also reflects the strategic consensus among leading securities firms to accelerate their overseas market expansion.

Since 2026, Chinese-funded securities firms have significantly accelerated their “going global” efforts, including Huatai Securities (601688), Northeast Securities (000686), Hua’an Securities (600909), and Dongwu Securities (601555). These firms have successively increased their international presence through capital injections or establishing new Hong Kong subsidiaries. Against the backdrop of rising demand from domestic companies for overseas expansion and cross-border asset allocation by investors, international business is shifting from a marginal activity to a core profit engine. Data shows that some top securities firms’ international subsidiaries contribute up to 55% of net profits. Facing a red line of over 30% international business ratio for global leading securities firms, Chinese securities firms are investing heavily to accelerate their internationalization process.

GF Securities Plans to Further Capitalize Over HKD 61 Billion

On the evening of March 12, GF Securities announced that, based on business development needs and the actual situation of GF Hong Kong, the company intends to increase its capital in GF Hong Kong by no more than HKD 6.101 billion. The announcement states that the company will choose either a one-time or phased capital increase depending on actual circumstances. Regarding the source of funds for this capital increase, GF Securities said it will use proceeds from the company’s general authorized placement of new H-shares, issuance of H-share convertible bonds, and its own funds.

In fact, GF Securities had been planning this capital increase early on. On January 6, 2024, GF Securities signed a “Placement Agreement” for the placement of 219 million new H-shares at HKD 18.15 per share with underwriters and agents under general authorization, and a “Subscription Agreement” for convertible bonds totaling HKD 2.15 billion, which can be converted into H-shares. The total amount of this issuance is approximately HKD 6.125 billion. At that time, GF Securities stated that the net proceeds from this issuance would be fully used to increase capital in its overseas subsidiaries to support international business development.

Looking at past actions, GF Securities has been continuously injecting capital into GF Hong Kong over the past two years. A timeline shows that in May 2024, GF Securities increased its capital in GF Hong Kong by HKD 1.5 billion, raising its paid-in capital to HKD 7.1 billion; in July 2024, it added another HKD 1.1 billion, bringing paid-in capital to HKD 8.2 billion; and in January 2025, it increased by HKD 2.137 billion, with paid-in capital reaching HKD 10.337 billion.

Data indicates that GF Hong Kong was established in June 2006 as a wholly-owned subsidiary of GF Securities. Currently, its paid-in capital stands at HKD 10.337 billion. Regarding the strategic significance of this capital increase, GF Securities stated that it will further support the company’s international business development, strengthen cross-border service capabilities, enhance GF Hong Kong’s capital strength, and improve its risk resistance.

Chinese Securities Firms Frequently Boost International Business

GF Securities’ plan to raise over HKD 6.1 billion is a prominent example in the industry. As the importance of international business continues to rise in securities firms’ overall strategies, Chinese securities firms are intensively expanding their international presence through establishing subsidiaries and increasing capital in existing ones.

Since 2026, besides GF Securities’ major move, several other firms including Huatai Securities, Northeast Securities, Hua’an Securities, and Dongwu Securities have also stepped up their overseas efforts. On January 23, 2026, Huatai Securities announced approval to increase its wholly-owned subsidiary Huatai International Financial Holdings Limited’s capital by up to HKD 9 billion, dedicated to supporting its overseas operations.

In February 2026, smaller and mid-sized firms also accelerated their overseas expansion. On February 10, Northeast Securities announced that the China Securities Regulatory Commission (CSRC) had no objection to its plan to establish Dongzheng International Financial Holdings Limited in Hong Kong with HKD 500 million of its own funds, marking its official entry into the Hong Kong market.

On the same day, Hua’an Securities also announced that the CSRC had no objection to its plan to increase its Hong Kong wholly-owned subsidiary Hua’an Securities (Hong Kong) Financial Holdings Limited’s capital by HKD 500 million.

Just two days later, on February 12, 2026, Dongwu Securities announced that the CSRC had no objection to its plan to increase capital in Dongwu Securities (Hong Kong) Financial Holdings Limited by HKD 2 billion.

These series of disclosures and capital investments reflect the firm stance of Chinese securities firms on their international expansion in Hong Kong and globally.

Rapid Growth in International Business Revenue Share

In recent years, international business has become a key growth driver for securities firms, especially for leading firms whose international revenue growth is robust and increasingly contributes to overall profits.

Taking GF Hong Kong as an example, its recent financial performance has been impressive. According to Hong Kong accounting standards, as of September 30, 2025, GF Hong Kong’s total assets exceeded HKD 107.546 billion (including client funds), a 63.86% increase year-over-year; total liabilities were HKD 95.802 billion, up 66.64%; and net assets attributable to the parent company reached HKD 11.744 billion, up 44.26%. In terms of profitability, from January to September 2025, GF Hong Kong achieved operating income of HKD 3.52 billion, a 57.49% increase; net profit attributable to the parent was HKD 1.046 billion, a sharp increase of 189.05%.

Comparing this to GF Securities’ overall performance, the third quarter of 2025 saw total operating revenue of RMB 26.164 billion, up 41.04%; net profit attributable to the parent was RMB 10.934 billion, up 61.64%. Based on these figures, GF Hong Kong’s operating income accounted for approximately 13.45% of GF Securities’ total, and its net profit contribution was about 9.57%.

From a macro industry perspective, the profit contribution rate of international business is experiencing a qualitative leap. Guotai Haitong’s research shows that the contribution of 18 securities firms’ international subsidiaries to overall profits has risen sharply from 0.7% in 2018 to 8.2% in the first half of 2025, highlighting their growing importance in the profit structure. Among top-tier firms, this trend is even more pronounced. Data indicates that in the first half of 2025, the net profit contribution rates of China International Capital Corporation (CICC), CITIC Securities (600030), Huatai Securities, and CITIC Construction Investment (601066) were 55%, 20%, 14%, and 10%, respectively.

Looking ahead, the aforementioned Guotai Haitong report further notes that, based on international top investment banks’ experience, global leading securities firms typically have international business ratios exceeding 30%. As domestic companies’ overseas expansion and cross-border asset allocation continue to grow, combined with the recent resource investments by top securities firms, the market expects the profitability share of international business within leading firms to steadily increase, ultimately becoming a key engine for securities firms’ growth.