Goldman Sachs: CITIC Securities' net profit last year exceeded expectations, with good cost control

Goldman Sachs reported that CITIC Securities Co., Ltd. (06030.HK) released its preliminary performance for 2025, with revenue and net profit of RMB 75 billion and RMB 30 billion, respectively, representing year-on-year growth of 29% and 38%, exceeding Goldman Sachs' expectations by 2% and 5%. Based on this, it is estimated that the revenue and net profit for the fourth quarter of 2025 will be RMB 19 billion and RMB 7 billion, respectively, surpassing Goldman Sachs' expectations by 9% and 11%. Revenue is expected to decline by 17% quarter-on-quarter and increase by 18% year-on-year, while net profit is expected to decline by 27% quarter-on-quarter and increase by 41% year-on-year.

Goldman Sachs stated that it still needs to wait for the annual report to disclose the revenue contribution details of each business line to analyze the reasons for the total revenue exceeding expectations. However, the decline in quarter-on-quarter revenue growth aligns with Goldman Sachs' view that brokerage profits peaked in the third quarter of 2025, which is also evident from the data showing an 11% quarter-on-quarter decline in average daily trading volume for the fourth quarter of 2025. The better-than-expected net profit may be attributed to better-than-expected cost control. As of the fourth quarter of 2025, the estimated annualized return on equity is 8.7%, compared to 12.2% in the third quarter of 2025.

Goldman Sachs maintains a "Buy" rating on CITIC Securities Co., Ltd. (600030.SH) A shares and a "Neutral" rating on H shares, based on a forecasted price-to-earnings ratio of 18 times and 11 times for 2026, with 12-month target prices of RMB 36.72 and HKD 24.46, respectively