How did the proprietary trading decline? Hualin Securities' net profit in 2025 increased by 43%, with wealth management accounting for nearly 70% of revenue

Ask AI · How does alternative investment contribute excess returns amid declining proprietary trading business?

Cailian Press, April 1st (Reporter Chen Junlan) On the evening of March 31st, Hualin Securities disclosed its 2025 annual report. The report shows that the company achieved operating revenue of 1.7B yuan for the year, an increase of 18.34% year-on-year; net profit attributable to shareholders of the listed company was 506 million yuan, a significant increase of 43.35%, with profitability markedly improved.

From the business structure, Hualin Securities presents a differentiated pattern of “steady growth in wealth management, outstanding performance in alternative investments, and pressure on proprietary and asset management businesses.” Wealth management business achieved operating revenue of 1.15 billion yuan, up 28.02% year-on-year; investment banking business achieved operating revenue of 18 million yuan, a slight increase of 6.06%; proprietary trading business achieved operating revenue of 348 million yuan, down 28.32%; asset management business achieved operating revenue of 11 million yuan, down 47.39%.

Regarding shareholder returns, the profit distribution plan approved by the board of directors shows that, based on 2.7 billion shares, a cash dividend of 0.57 yuan (tax included) will be distributed to all shareholders for every 10 shares, with an expected total cash dividend of 154 million yuan. This dividend ratio accounts for 30.40% of the company’s net profit attributable to the parent in 2025, also indicating that the company has maintained a cash dividend ratio of no less than 30% for six consecutive years.

Wealth management revenue accounts for nearly 70%, institutional trading volume surges 128%

From the business structure, wealth management is undoubtedly the core growth engine for Hualin Securities in 2025. During the reporting period, this segment achieved operating revenue of 1.15 billion yuan, up 28.02% year-on-year, accounting for 67.75% of total operating revenue, further consolidating its dominant position, with a net profit margin of 51.69%.

Notably, during the transformation of wealth management, Hualin Securities leveraged AI technology to empower and promote synchronized growth of online and offline businesses, becoming the main driver of performance growth.

In terms of brokerage, the company’s stock and fund trading volume reached 34.2 trillion yuan in 2025, up 60%. Among them, institutional and algorithmic trading volumes performed especially well, increasing by 128%.

Additionally, online wealth management revenue reached 475 million yuan, up 31%, with client assets and new clients increasing by 31% and 26%, respectively. The profitability of the company’s branches reached 93%, with 101 branches turning a profit.

Proprietary trading declines, alternative investments contribute excess returns

Against the backdrop of market volatility, Hualin Securities’ proprietary trading revenue declined. The annual report shows that this business achieved revenue of 348 million yuan for the year, down 28.32%. The company stated that the main reason for the decline was market fluctuations and industry structural differentiation causing volatility in equity-based proprietary trading revenue.

It is worth noting that, as a professional alternative investment platform, subsidiary Hualin Innovation focused on key areas of national strategic importance, with investments covering 12 leading industry companies and 1 industrial fund, totaling a scale of 34.2k yuan. Thanks to this, the fair value change gains from alternative investments in 2025 increased significantly, driving the “other” business income to grow over 11 times year-on-year.

Investment banking revenue slightly up, investment bank rating downgraded to C

In terms of investment banking, the segment achieved revenue of 18 million yuan in 2025, a slight increase of 6.06%, mainly from financial advisory services. The company continued to strengthen its advantages in equity financing, actively expanding into refinancing, mergers and acquisitions, restructuring, and bond underwriting, improving its comprehensive financial service system.

Although investment banking revenue slightly increased in 2025, the overall trend remains contractionary, and the quality of practice faces challenges. During the year, no IPO projects were completed, and in the 2025 investment banking quality evaluation issued by the China Securities Industry Association, the practice rating was downgraded from B to C.

The downgrade also reflects deficiencies in project core, due diligence, and other areas. In March 2025, Hualin Securities was summoned by regulators due to issues such as insufficient due diligence on some projects and poor quality control. As the “gatekeeper” of the capital market, practice quality is a core competitiveness. Hualin Securities needs to quickly address compliance and risk control shortcomings to reverse the declining trend.

Additionally, asset management revenue reached 11 million yuan, down 47.39%, mainly due to a decrease in the scale of asset management products leading to lower management fee income. The company mentioned in the annual report that, despite the revenue decline, it continues to improve its investment research team and product matrix, focusing on digital upgrades and boutique operations in 2026, aiming to shift from scale-driven to value-creating development, and to build a stable asset management brand in a low-interest-rate environment.

R&D investment of 439 million yuan, AI brokerage strategy fully launched

Among many data points in the annual report, another notable figure is the company’s technology investment. In 2025, Hualin Securities’ operating expenses for electronic equipment reached 439 million yuan, up 69.11%. The report revealed that this investment mainly funds the development and iteration of the Dolphin vertical financial large model and the construction of the intelligent computing center, aiming to drive long-term business growth through intensive technological input.

Hualin Securities stated that 2026 will be the foundational year of a new three-year development plan, with the core strategic focus on “AI brokerage” fully launched. The company will build a core AI brokerage capability system, promote generative AI to empower the entire wealth management value chain, upgrade AI investment advisory and Hualing Smart Investment core functions, deepen AI applications in investment research, asset allocation, account diagnostics, and other scenarios, and create a smarter, more precise wealth management system.

Meanwhile, the company will focus on improving core business quality and efficiency, continuously enhance its comprehensive financial services, strengthen the integration of technology and business, adhere to compliance, and develop a differentiated, characteristic growth path to continuously build core competitiveness and create long-term sustainable value for investors.

(Reporter Chen Junlan, Cailian Press)