Zhi Tong Cai Jing·2026-02-27 02:52Core Viewpoint - The internationalization of securities firms is both a proactive choice for their own business development and a necessary step towards building a world-class investment bank, with the expectation that international business will become a significant driver of performance growth for these firms [1][3]. Group 1: International Business Growth - The contribution of international business to the profits of securities firms has become increasingly significant, with the profit contribution from international subsidiaries of 18 sample firms rising from 0.7% in 2018 to 258.2% in the first half of 2023 [2]. - Leading firms such as CITIC Securities, China International Capital Corporation (CICC), and Huatai Securities have seen international business contribute 20%, 55%, and 14% to their profits, respectively, indicating that international business is a major driver of profit growth for top firms [2]. - There is a clear trend of Chinese securities firms increasing capital investment in their international subsidiaries since 2025, with firms like GF Securities and Huatai Securities planning to enhance their international business capital strength [2]. Group 2: Strategic Importance of Internationalization - The internationalization of securities firms is an inevitable path under the strategy of becoming a financial powerhouse, as seen in global leaders like Goldman Sachs and Morgan Stanley, which capitalized on domestic enterprises' cross-border operations and overseas expansion needs [3]. - The development of international business is essential for building a world-class investment bank, as it enables firms to have a say in capital allocation and asset pricing in the international market, supporting high-level openness and national rise [3]. - International business is expected to be a primary direction for the expansion of top securities firms' balance sheets, especially in a context where the room for long-term interest rate declines is limited [3]. Group 3: Business Segments in International Operations - Wealth management is becoming a new growth engine for international business, driven by the increasing demand from Chinese residents for cross-border wealth management services [4]. - The investment banking sector is witnessing more Chinese companies going overseas for development, leading to frequent global capital operations such as overseas financing and cross-border mergers and acquisitions [4]. - Cross-border proprietary trading has gained traction as firms explore opportunities in overseas bond markets, which offer significant yield spreads compared to the domestic fixed income market [4]. Group 4: Future Outlook - The international business of leading securities firms is expected to steadily increase its profit share, driven by the rising demand for domestic enterprises to go abroad and the growing cross-border investment needs of domestic investors [5]. - The global leaders in the securities industry typically have an international business share of over 30%, indicating a benchmark for future growth in this area [5].