Once again, leading securities firms are expanding internationally, injecting 6.1 billion yuan to increase capital in their Hong Kong subsidiaries.

China Securities Firms Accelerate International Expansion

On March 12, GF Securities announced a major capital increase plan, intending to inject no more than HKD 6.101 billion into its wholly-owned subsidiary GF Hong Kong. A year earlier, in January 2025, GF Securities had already completed a HKD 2.137 billion capital increase for GF Hong Kong.

In recent years, international subsidiaries, especially those in Hong Kong, have become increasingly prominent as core gateways for overseas expansion. Cross-border business has become a key focus for securities firms.

GF Securities Announces Capital Increase Details

This capital increase is within expectations. In January this year, when GF Securities’ H-share refinancing was finalized, it was mentioned that over HKD 6 billion raised would support overseas business development and capital injections into foreign subsidiaries. The latest announcement states that the funds for this increase mainly come from the company’s general authorization to issue additional H-shares and convertible bonds, with the total amount roughly matching the planned increase. The remaining funds are from the company’s own resources.

However, the HKD 6.101 billion increase may not be the final amount. Past examples show this. In early 2025, GF Securities completed a HKD 2.137 billion increase, with an initial target of HKD 5.237 billion, but the final amount was nearly halved. Additionally, the capital increase for GF Hong Kong may be phased rather than a one-time event. The earliest plan dates back to 2018, and the process from proposal to implementation has spanned seven years.

Several other securities firms are also ramping up their overseas expansion. Besides GF Securities, Huatai Securities completed a HKD 10 billion convertible bond issuance in February. The company plans to increase its wholly-owned foreign subsidiary Huatai International by no more than HKD 9 billion to support overseas growth. Over the past year, Shanxi Securities, Dongxing Securities, Dongwu Securities, and Hua’an Securities have also progressively expanded their international subsidiaries, accelerating their entry into cross-border financial markets.

The pace of securities firms’ internationalization is expected to accelerate further in 2026. Regulatory authorities continue to encourage firms to enhance cross-border services, providing policy support for Chinese securities firms’ overseas ventures. Market conditions, such as the recovery of Hong Kong IPOs, the return of Chinese concept stocks, and the cross-border financial demands driven by the Belt and Road Initiative, are creating a broad market space for cross-border business development.

Strengthening GF Hong Kong’s Capital Base

GF Hong Kong, established in 2006 as GF Securities’ core offshore platform, currently has a paid-in capital of HKD 10.337 billion. Its main businesses include investment holding, investment banking, sales and trading, and asset management through its subsidiaries. The recent capital increase aims to further solidify the platform’s capital strength. The company states that this will directly enhance GF Hong Kong’s capital base, improve its risk resilience, and support its international business growth and cross-border service capabilities.

GF Hong Kong’s performance provides fundamental support for the capital increase. As of Q3 2025, under Hong Kong accounting standards, GF Hong Kong’s total assets reached HKD 107.546 billion, up 63.86% year-over-year; net assets attributable to the parent company were HKD 11.744 billion, up 44.26%. Operating income was HKD 3.52 billion, up 57.49%, and net profit attributable to the parent was HKD 1.046 billion, a significant increase of 189.05%. All key operational indicators have shown substantial growth.

Regarding the details of GF Hong Kong’s capital increase, especially the investment areas, the January refinancing announcement mentioned plans to enhance cross-border transaction services, institutional business, and cross-border investment banking, along with product innovation and connectivity channels to improve comprehensive cross-border services.

Policy-Driven Acceleration of Securities Firms’ Internationalization

GF Securities’ capital increase exemplifies the recent trend of Chinese securities firms accelerating their international expansion. Reports and tracking by China Securities Journal show that Hong Kong remains the primary choice for overseas expansion among these firms, with leading firms making large capital injections and smaller firms actively entering the market. The funds are mainly allocated to investment banking, asset management, wealth management, and other cross-border sectors.

Leading firms leverage their capital advantages to continue large-scale investments in Hong Kong subsidiaries, with single-round increases typically between HKD 5 billion and HKD 9 billion. For example, in December 2025, China Merchants Securities agreed to allow Zhongzhao International to make multiple capital injections totaling no more than HKD 9 billion, with an initial HKD 4 billion injection into China Merchants Securities (Hong Kong). CITIC Construction Investment announced in August 2025 plans to invest HKD 1.5 billion into CITIC Construction Investment International to expand overseas coverage.

Smaller or specialized firms tend to establish new Hong Kong subsidiaries or make smaller capital injections, usually between HKD 300 million and HKD 2 billion, to accelerate their cross-border market entry. For instance, Dongwu Securities finalized a plan in April 2025 to inject up to HKD 2 billion into Dongwu Hong Kong, which received approval from the China Securities Regulatory Commission (CSRC) in February 2026. Hua’an Securities also planned a HKD 500 million capital increase, which was approved in February 2026, raising its Hong Kong subsidiary Hua’an Financial Holdings’ registered capital from HKD 480 million to nearly HKD 1 billion.

Shanxi Securities and Dongxing Securities are also completing their capital increases. Shanxi Securities plans to inject HKD 1 billion into Shanxi International to strengthen capital and reduce financing costs. Dongxing Securities increased its Hong Kong subsidiary Dongxing Hong Kong’s capital by HKD 300 million for operational needs. Northeast Securities is a notable example of establishing a new offshore platform; its board approved the plan to set up a Hong Kong subsidiary in April 2025, and after CSRC approval in February 2026, it intends to establish Dongxing International with HKD 500 million of its own funds, marking its first overseas platform.

Besides these, several other small and medium-sized firms, such as Western Securities and First Venture, are planning to expand into Hong Kong. The primary use of capital increases is focused on core cross-border activities like investment banking sponsorships, cross-border transactions, asset management, and wealth management, as well as capital supplementation, obtaining relevant financial licenses, and risk management improvements—building a solid foundation for overseas growth.

It is important to note that Hong Kong has become the central hub for Chinese securities firms’ cross-border operations, but competition is intensifying. These firms face not only domestic rivals but also international investment banks and local Hong Kong securities firms, increasing the competitive pressure in their overseas expansion efforts.

(China Securities Journal Reporter Lin Jian)