Architectural Reform Restart: China Taiping Securities' Divisions and Mergers in 2026

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Change is the best starting point!

Author: Chu Yi

Editor: Shi Wan

Style: Li Li

Source: Shou Cai—Shou Tiao Financial Research Institute

They say a new year brings new atmosphere. Zhongtai Securities, with a single announcement, has taken the lead in unveiling the prelude to reforms in 2026.

On the evening of January 29, the company announced that the Board of Directors approved the proposal for organizational restructuring, including the establishment of underwriting and sponsorship subsidiaries, proprietary trading subsidiaries, and research consulting subsidiaries. At the same time, the company will dissolve its Investment Banking Business Committee, Financial Markets Committee, Research Institute, and their subordinate departments.

Zhongtai Securities stated this was “based on business development needs.” Industry insiders point out that separating business lines from headquarters functions into independent subsidiaries grants greater autonomy and flexibility in compensation structures, assessment mechanisms, and incentive methods, meeting regulatory salary restrictions while balancing talent incentives and cost control through market-oriented mechanisms. Additionally, increased operational autonomy for subsidiaries helps streamline management levels, reduce communication costs, and improve organizational efficiency.

In the book “The Corporate Lifecycle,” management scholar Isaac Adizes noted that organizational restructuring is a critical implicit curve for companies to traverse their lifecycle and achieve long-term sustainability. So, what positive changes and new opportunities might this restructuring bring? How can potential challenges and concerns be addressed?

1

Focusing on Excellence in Three Core Business Lines

Transforming into a “Gold Standard” player?

In fact, this is not Zhongtai Securities’ first major adjustment. According to China Fund News, as early as early 2021, the company implemented its most significant reform since integrating Taitong Securities in 2007, consolidating 53 first-level departments at headquarters into 41, and adjusting 75 executives. The company adhered to a dual benchmarking system for compensation and assessment aligned with market standards, fully implementing rigid evaluations for institutions and staff to motivate proactive entrepreneurship. At that time, the focus was on transforming wealth management.

This current adjustment centers on three core business lines: investment banking, proprietary trading, and research. Why choose the subsidiary model? Why these three lines?

Zhan Junhao, a well-known strategic positioning expert and founder of Fujian Huace Brand Positioning Consulting, told Shou Cai that investment banking, proprietary trading, and research are all asset-light, high-intelligence, market-oriented businesses that face fierce industry competition. They require independent accounting and market-driven incentives. After becoming independent, these three sectors will have more flexible personnel and decision-making authority, shifting from “cost centers” to “profit centers,” which allows for precise talent retention and more agile market responses—truly a win-win.

From a performance assessment perspective, this adjustment is also quantifiable: investment banking can be measured by project underwriting scale, approval rates, and compliance ratings; proprietary trading focuses on investment returns and risk-adjusted performance; research can be evaluated based on commission revenue, client satisfaction, and report influence. A highly quantitative evaluation system provides the conditions for quickly establishing a “goal-performance” feedback loop after subsidiary establishment, avoiding common issues like blurred responsibilities and insufficient incentives in cross-department collaboration.

From an industry perspective, this restructuring reflects industry evolution. In recent years, with deepening reforms in capital markets and increasing industry competition, brokerage firms have continuously iterated their organizational models. Mainstream directions include establishing specialized subsidiaries, optimizing committee systems, and empowering through financial technology. The industry is gradually moving away from a “big and comprehensive” loose structure toward a “specialized and refined” operational model.

Some peers have already begun similar explorations. According to Cailian Press, Galaxy Securities’ Beijing Internet Subsidiary is the industry’s first such institution, positioned as an “innovative business subsidiary.” Through centralized and intelligent operations, integrating online and offline resources, it offers full-chain digital services in investment education, information, and trading, leveraging the agility granted by independent operation.

Similarly, after the merger of Guotai Junan and Haitong Securities, 44 subsidiaries and 7 major business committees were established, embodying a “specialized division + collaborative linkage” structure. Investment banking, research, and other committees have multiple first-level departments, strengthening sector expertise while promoting cross-sector collaboration through committee mechanisms, gradually building a “strong front office, professional middle office, and integrated back office” operational system.

Overall, this reform is highly significant for Zhongtai. If it can build an efficient structure with a “strong headquarters risk control” and “strong branch operations,” it will undoubtedly be a “pointing to gold” transformation, potentially triggering a wave of “business division upgrades” across brokerages.

2

Full-year Net Profit Surge

A natural progression and strategic move

Looking further, this is also a continuation and deepening of strategic transformation. On February 7, 2025, the China Securities Regulatory Commission issued the “Implementation Opinions on Promoting the Five Major Areas of Capital Market Development,” explicitly calling for “accelerating the transformation of securities and fund management institutions into wealth management.”

As previously mentioned, Zhongtai Securities has prioritized wealth management since 2021. Thanks to years of deep cultivation, the company has built a systematic business matrix around wealth management:

• Launching brands like “Qifu Investment” fund advisory;
• Establishing a “three-system and one-platform” covering trading services, product services, comprehensive financial services, and fintech platforms;
• Introducing the “Zhongtai Wealth” brand;
• Developing product lines like “Zhongtai Quantitative 30”;
• Initiating ETF ecosystem construction, creating brands like “Zhongtai ETF 30”…

By the end of June 2025, Zhongtai Securities’ wealth management services had served over 10 million clients, with the “Qifu Tong” app reaching 5.7092 million monthly active users, ranking 11th among brokerage proprietary apps, solidifying its service capacity.

Financially, the impact is clear: in 2021, wealth management contributed 33.37% of total revenue; by June 2025, it accounted for 37.45%. Asset management revenue was 536 million yuan in 2021 (4.08% of total), rising to 1.185 billion yuan in the first half of 2025 (22.54%). Wealth and asset management combined now contribute nearly 60% of revenue, demonstrating the effectiveness of the transformation.

Another growth engine is trading and investment. In the first half of 2025, despite overall volatility in A-shares and bond markets, the company used precise research and technological empowerment to effectively manage interest rate risks in fixed income investments; upgraded quantitative strategies and models for stock investments to achieve excess returns; and steadily expanded OTC derivatives and market-making businesses. Investment revenue grew 40.1% to 657 million yuan; credit business increased 45.22% to 582 million yuan. Overall, total revenue rose 3.11% year-on-year to 5.257 billion yuan, with net profit attributable to shareholders soaring 77.26% to 711 million yuan.

On January 29, 2026, Zhongtai Securities announced a profit forecast, expecting full-year net profit attributable to shareholders between 1.312 billion and 1.5 billion yuan, a 40%-60% increase year-on-year. The main drivers are the comprehensive efforts in wealth management, trading, and asset management.

Looking ahead, industry growth potential remains attractive. According to 21st Century Business Herald, SEC Chairman Wu Qing cited data in December 2025 indicating that currently, Chinese residents’ assets in stocks and funds account for about 15%, roughly the level in the U.S. thirty years ago. With economic restructuring and interest rate environment changes, the asset management and wealth management markets have huge potential. The securities industry needs to offer more diverse and precise products and services to share in this growth.

In short, asset management and wealth management are still on the cusp of explosive growth. With forward-looking planning and compound effects, Zhongtai Securities has secured a leading position in this gold mine, establishing a healthy cycle of performance growth and long-term development. Based on this foundation, the organizational restructuring centered on “subsidiaries” is a natural progression and another strategic move toward the future.

The best time to plant a tree was ten years ago; the second best is now. Zhongtai Securities has done both.

3

Breaking Through Growth Uncertainty

Path to redemption and collaboration challenges

However, standing still is not an option.

Renowned economist Song Qinghui told Shou Cai that internal performance pressure is a practical driver for reform, but the external trend of the securities industry entering a low-growth, highly differentiated stage is the real determinant of reform direction. As brokerage business margins weaken and homogeneous competition intensifies, investment banking, proprietary trading, and research demand higher efficiency in resource allocation, faster decision-making, and stronger professional incentives than traditional headquarters models.

This is not an overly harsh requirement. Although 2025’s performance was excellent, looking at longer-term performance reveals it is not outstanding and requires self-reinvention. According to Eastmoney Choice data, from 2021 to 2024, the company’s revenue was 13.15 billion, 9.325 billion, 12.762 billion, and 10.891 billion yuan, with growth rates of 27.02%, -29.09%, 36.86%, and -14.66%. Net profit attributable to shareholders was 3.2 billion, 590 million, 1.8 billion, and 937 million yuan, with respective growth rates of 26.72%, -81.56%, 204.94%, and -47.92%.

Overall, profits fluctuate significantly and show a downward trend. Even if 2025 hits the upper forecast of 1.5 billion yuan, it remains less than half of the 2021 peak and below 2023 levels. The sharp increase also considers the lower base of 2024.

Looking back, in 2021, riding the wave of deepening registration system reforms and market activity, Zhongtai Securities’ investment banking completed 35 equity underwriting deals totaling 23.619 billion yuan; bond underwriting nearly 160 billion yuan. In the first half of 2025, only three equity underwriting deals were completed, totaling 1.329 billion yuan; bond underwriting also shrank significantly. Amid industry competition and the accelerated pace of IPOs, Zhongtai Securities’ investment banking seemed somewhat slow and less responsive.

The saying “change is the way through” applies here. Decisively internalizing reforms—making investment banking, proprietary trading, and research independent subsidiaries—is a key step for Zhongtai Securities to rebuild competitiveness and self-redeem. Song Qinghui noted that improving efficiency in these areas can, in turn, enhance internal collaboration, providing higher-quality professional support for brokerage and asset management lines, thereby increasing overall business value.

However, he also cautions that the biggest challenge of this reform is balancing “delegation” and “risk control.” If authority boundaries are unclear, it could weaken internal collaboration, cause risk spillovers, or lead to incentive imbalances. Whether Zhongtai Securities can truly overcome difficulties depends not only on the boldness of “separating” but also on the wisdom of “integrating”—how to stimulate vitality while building an effective risk firewall and value chain integration.

In short, this transformation must focus on both appearance and substance, combining drive with stability. To break through growth fog, mastering the art of balance and playing the “separation and integration” act well is essential.

4

No Breaking, No Building—Steady Progress

2026 Transformation Outlook

Not overly demanding. Ultimately, compliance remains the primary value foundation and development base.

In recent years, the CSRC has implemented comprehensive, penetrating supervision over brokerages, strictly enforcing the “dual punishment system” for organizations and individuals.

According to Qichacha, Zhongtai Securities received multiple regulatory penalties in 2025. For example, in February, it received a warning letter for inadequate due diligence, non-compliant issuance and underwriting, and insufficient trustee management. In December, it was issued a warning for failing to diligently supervise the issuance of stock by Yinjian Technology to specific targets and for failing to identify fictitious income, among other issues. It was also fined 869,000 yuan for not conducting proper customer due diligence and reporting suspicious transactions.

In November 2024, former General Manager Bi Yuguo was fined for illegal shareholding; in August 2025, former Chairman Li Wei was sentenced.

Certainly, penalties and leadership issues have a lag effect and do not necessarily reflect the current situation. Nonetheless, in the face of strict regulation and the trend toward high-quality development, more thorough inspections, proactive risk management, and internal controls are always wise.

On November 25, 2025, Zhongtai Securities announced a completed private placement of 6 billion yuan, raising 5.919 billion yuan net, all to be used for capital replenishment, focusing on alternative investments, bond investments, market-making, and wealth management. Earlier, on November 20, a 15 billion yuan short-term corporate bond was registered. Including the 11.5 billion yuan of short-term financing bonds already issued, the planned new financing in 2025 could easily exceed 30 billion yuan.

Behind this urgency may be the need for liquidity. As of the end of March 2025, the company’s consolidated cash balance was 62.266 billion yuan, but according to Shenzhen Business Daily, 54.234 billion yuan of this was client settlement funds, which are strictly regulated and cannot be freely used. The company’s own available funds are about 8.032 billion yuan. As of the end of September 2025, the company’s asset-liability ratio was 80.63%, with a net operating cash flow of 4.812 billion yuan, down 82.78% year-on-year. Short-term borrowings increased by 118.55% from the previous year-end, accounting for 3.76 percentage points of the total assets.

According to Cailian News, Zhongtai Securities’ interest expenses in 2022–2024 were 3.342 billion, 3.191 billion, and 2.965 billion yuan; in the first three quarters of 2025, they totaled 1.812 billion yuan. The company admits that as its business continues to expand and revenue grows, debt levels may further increase to meet daily operational needs. If persistent losses, declining profitability, or restricted financing channels occur, the company could face certain debt repayment risks.

A review shows that Zhongtai Securities faces a complex mix of challenges and opportunities, currently in a critical phase of upward struggle. At this key moment, it needs both the courage to “break” and the resilience to “build,” balancing boldness with steady progress, and playing the “separation and integration” act skillfully.

Dreams make anyone remarkable; change is the best beginning! We look forward to Zhongtai Securities’ 2026, opening a new chapter of transformation and growth.