CITIC Securities: Brokerage Sector Net Profit Expected to Grow 32% in First Three Quarters of 2026, Top Firms' Dividend Yields Approaching Banks
nashnova research
CITIC Securities forecasts the brokerage sector's first-three-quarter net profit rising 32% year-on-year to RMB 224.2 billion, with ROE on track for a decade high; top brokerages' A-share dividend yield has hit 4.0%, closing in on banks for the first time — the sector is developing real income appeal.
The market weakened in Q3 — how did brokerages still post strong numbers?
The Shanghai Composite fell 6.2% in Q3; average daily turnover dropped 21% quarter-on-quarter. Single-quarter brokerage net profit fell 28% QoQ to RMB 68.2 billion.
Yet first-three-quarter cumulative net profit still rose 32% YoY to RMB 224.2 billion, with sector ROE — return on equity, or how much profit each unit of shareholder capital generates — projected at 7.6%, potentially a decade high.
This means → Q3 was soft, but the profit cushion built in H1 was thick enough that the full-year growth base stayed intact.
Just how cheap is the sector now?
A-share brokerage stocks trade at 11.7x price-to-earnings, sitting at the 0.5th percentile over ten years. In plain terms = valuations were higher 99.5% of the time in the past decade.
Hong Kong-listed brokerages trade at 6.8x P/E, also near all-time lows.
This reflects a market still pricing in the old "feast-or-famine" view of brokerages — profits have already risen, but valuations remain pinned to the floor.
When did brokerages start looking like dividend plays?
CITIC Securities notes three conditions are now met simultaneously: high profit growth, depressed valuations, and a cash payout ratio stable at 30%-40%. The sector qualifies as a dividend play for the first time.
Based on 2026 earnings and 2025 payout ratios, top brokerages' average dividend yields reach 4.0% (A-shares) and 6.3% (Hong Kong).
The A-share 4.0% yield already rivals banks at 3.89% and utilities at 3.68%, just below coal at 4.37%. This means → brokerage stocks, long traded only for momentum, are starting to offer a genuine income case.
What is keeping the profit floor from collapsing?
Over the past decade, brokerages have steadily raised the share of capital-heavy businesses — proprietary investing and trading using their own balance sheets — diversifying across equities, bonds, and other asset classes, and growing market-making, derivatives, and client-driven non-directional trading.
Even during the 2018 and 2023 bear markets, sector and top-firm ROA — return on total assets — held above 1.1% and 1.3% respectively. The ten-year ROA midpoint sits at roughly 1.6% and 1.8%.
In plain terms = brokerages no longer live or die by bull-market commissions. Capital-heavy businesses act as a shock absorber, keeping profits from zeroing out when markets turn.
Can the dividend keep climbing?
Sector leverage rose from 2.65x in 2016 to 3.67x in H1 2026; top firms moved from 3.31x to 4.95x, driving the long-term ROE center higher.
The payout ratio has held at 30%-40% for a decade. Using the ten-year ROA midpoint, top brokerages are projected to sustain dividend yields above 2.7% (A-shares) / 5.0% (Hong Kong), with room to rise.
CITIC Securities flags risks: declining turnover, tighter equity financing, investment losses, and capital-market reform falling short of expectations. This means → whether the dividend yield can keep delivering depends on both earnings growth and payout discipline holding steady.
市场有风险，内容仅供研究参考，不构成投资建议。