J.P. Morgan China Securities: Monthly Bulletin — Operating Trends Strengthened Across the Board with a Record High ADT of RMB 3.2trn
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J.P. Morgan reports that operating trends across the Chinese securities industry strengthened comprehensively, with average daily turnover (ADT) in May 2026 reaching a historic peak of RMB 3.2 trillion. This milestone represents a 15% month-over-month and 40% year-over-year increase, driven by improving market sentiment and heightened trading activity.
The record ADT directly boosted brokerage revenues, projected to surge 35% year-over-year. Proprietary investment returns also improved significantly, supported by a 5% gain in the CSI 300 Index during May. Assets under management (AUM) hit new highs with an 8% sequential increase. Margin financing balances grew 12% to RMB 2.1 trillion. Industry-wide net profit is expected to rise 30% year-over-year and 20% month-over-month. Top-tier brokerages continued to capture market share, with the top five firms collectively holding 45%. While investment banking revenue ticked up 10% sequentially, it still declined 5% year-over-year.
Based on these favorable trends, J.P. Morgan upgraded earnings forecasts for CITIC Securities by 10% and Huatai Securities by 8%. The firm maintains an Overweight rating on CITIC Securities (6030.HK), raising its target price to HKD 25, and reiterates an Overweight on Huatai Securities (6886.HK) with a target price of HKD 18. Sector valuations remain attractive at historical lows, trading at 12x earnings and 1.2x book value. Key risks include market volatility and sudden policy shifts that could dampen trading activity.
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