Strategic positioning of brokers' equity investment is strengthened, with A/H-share IPOs and hard-tech projects as the core focus

Overview

This report is an in-depth study of the non-bank financial sector, focusing on the operating performance of securities companies' alternative/capital subsidiaries, A/H-share IPO approvals and pipeline companies in the first half of 2026, and the participation of broker-affiliated capital in equity investments of key projects. The report points out that under policy guidance to 'invest early, invest small, invest long-term, and invest in hard technology,' the strategic positioning of brokers' equity investment business has been further elevated.

Core views

Brokers' equity investment has shifted from a channel-type business to a core platform for hard-tech equity investment. Alternative subsidiaries make direct investments with proprietary capital, while capital subsidiaries raise and manage third-party funds to participate in PE/VC; within a framework of legal-entity separation and conflict-of-interest prevention, both serve sci-tech enterprises together. The A/H-share IPO markets show differentiated characteristics: H-shares have larger deal numbers and fundraising size with shorter review periods, while A-shares have higher profitability quality among approved companies and a more pronounced hard-tech orientation. Broker-affiliated capital has penetrated more than half of leading A-share listed projects and large pipeline projects, demonstrating enhanced synergy between investment banking underwriting and equity investment.

Analysis framework

The report evaluates the strategic value and market landscape of brokers' equity investment business through a combination of industry policy review, financial statistics of securities company subsidiaries, comparison of A/H-share IPO approvals and pipeline projects, sponsor ranking, analysis of corporate financial quality and valuation, and look-through observation of equity holdings in key projects.

Methodology notes

• Industry operating analysisComparison framework for securities companies' alternative/capital subsidiaries

  Distinguishing direct investment with proprietary funds from investment with entrusted managed funds

  Alternative subsidiaries mainly use securities companies' proprietary funds for equity and alternative asset investments, while capital subsidiaries mainly raise and manage PE/VC funds from third-party LPs. The two types differ in funding sources, revenue structure, and cycle sensitivity.

• IPO market analysisPanoramic comparison of A/H-share IPOs

  Comparing the two markets in terms of volume, fundraising, review efficiency, profitability quality, valuation, and pipeline structure

  Using data from A-share approved companies and H-share listed or hearing-passed companies, the report compares differences in issuance efficiency, company quality, and industry distribution between the two IPO markets.

• Industrial capital penetration analysisDual-engine drive of investment + underwriting

  Observing broker-affiliated capital's equity participation in leading listed and pipeline projects

  The report combines securities subsidiaries' equity participation projects with IPO underwriting and sponsor competition landscape to assess the depth of broker capital's positioning in hard-tech projects.

Asset mapping & comparison

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

• Securities companies sector

  Beneficiary direction for sector allocation

  Strengths

  Policies encourage brokers to increase early-stage sci-tech equity investment, and leading brokers have scale and resource advantages in alternative/capital subsidiaries and IPO sponsorship.

  Weaknesses

  Subsidiary revenue and profit are still affected by secondary market valuations, IPO exit windows, and project exit pace.

  Comparison

  Concentration among leading brokers is high, with the top five alternative subsidiaries contributing about three-quarters and the top four capital subsidiaries contributing nearly two-thirds.

  Risks

  A slowdown in IPO pace, valuation pullback, and blocked project exits may suppress profit contribution.

• A-share IPO industry chain

  Synergistic market for broker underwriting and equity investment

  Strengths

  A-share approved companies have higher profitability quality and a more pronounced hard-tech orientation, while first-day listing valuation jumps create price spreads between primary and secondary markets.

  Weaknesses

  The review period is relatively long, with a median of 252 days, leading to higher uncertainty in project cycles.

  Comparison

  Compared with H-shares, A-share projects are fewer in number but stronger in profitability quality, with longer review times.

  Risks

  Changes in review policy, withdrawal of pipeline companies, or slower pace may affect sponsorship and investment returns.

• H-share IPO market

  Cross-border financing and underwriting market for leading projects

  Strengths

  H-share projects have larger volume and fundraising scale, with a median review period of only 54 days, and are concentrated in industries such as electronics, pharmaceuticals, software, and information.

  Weaknesses

  The proportion of loss-making companies is relatively high, and post-issuance valuation premiums are limited.

  Comparison

  Compared with A-shares, H-shares have higher review efficiency and larger fundraising scale, but lower median net profit.

  Risks

  Market liquidity, international investor risk appetite, and valuation volatility of loss-making companies may affect issuance performance.

Key data

• Average revenue of alternative subsidiariesFrom 2019 to 2025, the average combined revenue of 15 alternative subsidiaries was about RMB 8.54 billionRevenue and profit volatility are significantly affected by secondary market valuations and the IPO pace.
• Average revenue of capital subsidiariesFrom 2019 to 2025, the average combined revenue of 15 capital subsidiaries was about RMB 7.23 billionManagement fee income provides a degree of stability, and volatility is lower than that of alternative subsidiaries.
• Subsidiary profit contributionThe combined profit of the two types of subsidiaries accounted for 8% to 13% of parent companies from 2019 to 2023, and 6.56% in 2025The profit contribution ratio consistently exceeded the revenue contribution ratio, reflecting relatively high business margins.
• A-share IPO approvals and fundraisingFrom January to June 2026, 37 A-share projects raised RMB 56.719 billionAverage fundraising per project was RMB 1.533 billion.
• H-share IPO listings and fundraisingFrom January to June 2026, 96 H-share projects raised HKD 264.222 billionThe number of projects was about 2.6 times that of A-shares, with average fundraising per project of HKD 2.752 billion.
• Review periodThe median review period was 252 days for A-shares and 54 days for H-sharesThe A-share review period was about 4.7 times that of H-shares, with large variation within A-shares.
• Profitability quality of approved companiesThe median net profit in 2025 was RMB 125 million for A-shares and RMB 24 million for H-sharesThe proportion of loss-making H-share companies was about 46.9%, dragging down the median net profit.
• A-share pipeline companiesAs of July 12, there were 433 A-share companies under review, of which 202 were on the Beijing Stock Exchange, accounting for 46.7%The Beijing Stock Exchange has become an important reservoir for the A-share IPO pipeline.
• A-share pipeline fundraisingA-share pipeline companies are expected to raise a total of RMB 487.533 billion, with a median of RMB 672 millionThere were 154 projects below RMB 500 million, accounting for 35.6%.

Impact & implications

For the securities industry, the strategic significance of equity investment subsidiaries is rising amid sci-tech policies and IPO project reserves, which is expected to enhance leading brokers' integrated service capabilities for high-quality hard-tech projects. For investors, leading brokers with synergy advantages across alternative investment, capital management, and investment banking may show greater elasticity during IPO cycle recovery and expansion of hard-tech financing.

Risks

• There may be selection bias in the sample scope.
• Equity look-through information on securities subsidiaries may be incomplete.
• The financing history database has limited update frequency and coverage.
• Secondary market valuation fluctuations and changes in IPO pace may affect the revenue and profit of alternative/capital subsidiaries.
• The relatively high proportion of loss-making hard-tech companies may amplify project exit and valuation risks.

What to watch

• The strength of follow-up implementation of sci-tech equity investment policies.
• Changes in A-share and H-share IPO review pace, approval rate, and pipeline companies.
• Recovery in revenue, profit, and exit gains of leading brokers' alternative/capital subsidiaries.
• Changes in the shareholding ratio and underwriting share of broker-affiliated capital in hard-tech projects.
• A/H-share IPO valuation differences and post-listing performance.