East Money 1Q26 results slightly beat expectations, but share pressure remains

Overview

The report reviews East Money's 1Q26 results. Revenue and net profit were slightly better than expected, with core drivers coming from growth in interest income and brokerage income driven by active A-share market trading, as well as fund-sales-related operating income posting YoY growth for the third consecutive quarter. However, UBS believes the company still faces downward pressure on market share in brokerage and equity fund sales, and therefore maintains a Neutral rating.

Core views

UBS's core view is that short-term results are supported by active market trading and a recovery in the fund market, but East Money has not fully captured market growth: brokerage income growth was slower than equity-related ADT growth, and some market share indicators in margin financing and securities lending as well as fund distribution also saw slight declines or structural pressure. On valuation, the report maintains an SOTP target price of Rmb22.9, implying about 16.2% price upside versus the Rmb19.70 spot price on April 24, 2026.

Analysis framework

The report uses earnings breakdown and market-indicator comparison, focusing on revenue, net profit, brokerage income, interest income, fund sales income, investment income, and changes in industry trading value, margin financing and securities lending balances, fund issuance, and fund AUM, while maintaining the target price with the SOTP method.

Methodology notes

• Valuation methodsSOTP

  Sum-of-the-parts valuation

  UBS states that East Money's target price is based on the SOTP method and maintains the Rmb22.9 target price.

• Earnings comparisonConsensus completion ratio

  1Q results as a proportion of Bloomberg consensus FY26E

  1Q26 revenue and net profit reached 27% and 26% of Bloomberg consensus FY26E, respectively, above the five-year averages of 23% and 23%.

• Industry indicatorsMarket activity comparison

  Equity-related ADT, margin financing and securities lending balances, fund issuance, and AUM

  The report compares the company's brokerage, interest, and fund sales income with growth in market trading value, margin financing and securities lending balances, newly issued hybrid funds, and fund AUM to judge whether the company is outperforming the industry.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• 300059.SZ / East Money Information

  Core covered stock

  Strengths

  A leading Chinese financial information service provider with a high-traffic financial information website, Guba community, and fund distribution platform; 1Q26 revenue and net profit slightly beat expectations.

  Weaknesses

  Brokerage income growth was slower than market trading value growth, with trading market share falling from 4.14% in FY24 to 3.85% in FY25; equity fund distribution AUM share declined YoY.

  Comparison

  1Q26 revenue and net profit completion ratios were above five-year average levels, but growth in some business lines lagged corresponding market indicators, showing that improving market activity has not fully translated into share gains.

  Risks

  High dependence on A-share retail trading, pressure on market share, internet system security and data leakage risks, and volatility in investment income.

Key data

• 1Q26 revenue / net profitRMB5.0bn / RMB3.7bnUp 44%/38% YoY.
• FY26E consensus completion ratio27% / 26%Revenue / net profit as a proportion of Bloomberg consensus FY26E, above the five-year average of 23%/23%.
• Brokerage income growth+46% YoY / +17% QoQBelow equity-related ADT +79% YoY / +28% QoQ.
• Trading market share3.85% in FY25Down 29bp from 4.14% in FY24.
• Interest income growth+54% YoY / +7% QoQFaster than total market margin financing and securities lending balances at +36% YoY / +3% QoQ.
• Margin financing and securities lending market share3.14% at end-Q126Below 3.20% at end-Q125 and FY25.
• Operating income growth+31% YoY / +7% QoQMainly from fund sales, with YoY growth for the third consecutive quarter.
• Newly issued hybrid fund scaleRMB109bn in Q1Up 5.6x YoY and +104% QoQ.
• Non-money-market fund distribution AUM share3.40% at end-2025Up 21bp YoY.
• Equity fund distribution AUM share4.58% at end-2025Down 22bp YoY.
• Investment income-14% YoY / +50% QoQThe QoQ rebound came from RMB153mn fair value gains, reversing the RMB84mn loss in 4Q25.
• Market capitalizationRmb311b / US$45.5bAs disclosed in the report.
• Forecast total return16.9%Including 16.2% forecast share price upside and 0.7% forecast dividend yield.

Impact & implications

The report's investment implication for East Money is broadly neutral: the improving market environment has driven a temporary earnings beat, but the company's ability to capture industry growth is constrained by pressure on commission rates, brokerage share, and equity fund distribution share. If active A-share trading and fund sales continue, earnings still have upside potential; if market share continues to decline, valuation recovery upside may be limited.

Risks

• Market share growth in online brokerage or fund distribution business may be slower than expected.
• The company's earnings are highly dependent on A-share retail investors, which may lead to earnings volatility.
• Internet system security is highly critical; data leaks or system failures may lead to compensation, regulatory penalties, and lower user satisfaction.
• Declining brokerage commission rates may continue to suppress the elasticity of brokerage income relative to market trading value.

What to watch

• Whether A-share equity-related ADT can remain high, and whether the company's brokerage income can once again outperform market trading value.
• Growth in margin financing and securities lending balances and changes in East Money's market share in margin financing and securities lending.
• Growth in active fund issuance, non-money-market and equity fund AUM, and trends in the company's fund distribution market share.
• Changes in commission rates, fee rates, and customer activity.
• The sensitivity of investment income to interest-rate changes and fair-value volatility.