Huaxin Co., Ltd. 2025 Annual Report Insight: The Hidden Concerns of Relying on Heaven for Survival and Potential Breakthrough Directions Behind a 74% Surge in Net Profit

On March 26, 2026, Huaxin Shares released its 2025 annual report. The data shows that for the full year, the company achieved operating revenue of 2.594 billion yuan, up 26.54% year over year; attributable net profit was 636 million yuan, up significantly 73.98% year over year.

What needs special attention here is the “big ups and downs” in quarterly performance. Based on a breakdown of the quarterly report data, Huaxin Shares’ performance rhythm in 2025 was highly unstable: Q1: operating revenue 636 million yuan, attributable net profit 137 million yuan; Q2: operating revenue 534 million yuan (QoQ -16%), attributable net profit 87 million yuan (QoQ -36.5%); Q3: operating revenue 850 million yuan (QoQ +59%), attributable net profit 281 million yuan (QoQ +223%); Q4: operating revenue 575 million yuan (QoQ -32.4%), attributable net profit 130 million yuan (QoQ -53.7%).

Such sharp quarterly fluctuations usually reflect the company’s high sensitivity to market conditions, especially the role played by its proprietary business (changes in fair value of trading financial assets). For financial institutions that pursue steady operations, such drastic single-quarter volatility indicates that the stability of its earnings still faces severe challenges.

Analyzing Huaxin Securities’ business structure, it is found that although its “living off the weather” characteristics have improved, the “uneven performance across subjects” problem remains serious.

In 2025, the performance of Huaxin Shares’ business segments was as follows: Brokerage business (the pillar): revenue 1.039 billion yuan, up 22.57%, accounting for about 40% of total operating revenue. This is the company’s most stable source of cash flow, with growth mainly benefiting from the rise in trading volumes of stocks and funds across the whole market. Credit business (high gross margin): revenue 142 million yuan, up 36.97%. It is worth noting that this business’s gross margin is as high as 79.08%, mainly due to the growth in financing and margin lending and securities lending scales. In the financial statements, “other business” revenue was 855 million yuan, up 30.39%, accounting for 32.96% of total operating revenue. The annual report clearly points out that this is mainly because year-on-year returns from fixed-income investments and equity investments both increased. This portion is the core source of the incremental profit in 2025.

The company’s investment banking business revenue in 2025 was 138 million yuan, up slightly 0.24% year over year, basically in line with the previous year. Whether it is equity underwriting or bond underwriting, Huaxin Securities has little presence in the industry.

Huaxin Securities’ business structure has not escaped the essence of “living off the weather.” Although the brokerage business and credit business provide the base, about 70% of its revenue mainly comes from brokerage and proprietary investment businesses. Once market conditions reverse, the volatility of brokerage and proprietary businesses will directly flow through to the income statement.

In 2025, Huaxin Shares had no refinancing actions such as additional share issuance or rights issue, nor did it take any actions related to a Hong Kong stock listing. However, against the backdrop of industry mergers and acquisitions and restructuring, Huaxin Shares’ moves deserve attention.

Note: This article was written with the help of AI tools to collect and compile market data and industry information.