"Life extension" for 10 years of going public! Dongguan Securities' first-quarter performance soars by 80%, the final push for an IPO?

Our reporter Wang Zhaohuan from chinatimes.net.cn, Beijing

Recently, as brokerage firms’ annual reports are released in dense succession, Dongguan Securities has officially updated its main board IPO prospectus on the Shenzhen Stock Exchange. This move has drawn widespread attention in the capital markets.

It is understood that this is the 7th update since the company’s IPO acceptance in 2023. The core focus is to supplement the latest financial data for the full year 2025 and the first quarter of 2026, and to improve equity and compliance information, so as to ensure that the review work continues to advance.

In 2025, Dongguan Securities recorded operating revenue of RMB 3.39B, up 22.99% year over year; attributable net profit to the parent company was RMB 1.25B, up 34.78% year over year, with a significant improvement in profitability. Based on preliminary calculations, the company expects total operating revenue from January to March 2026 to be between RMB 861 million and RMB 952 million, up 26.62% to 39.95% compared with the same period last year. Net profit attributable to shareholders of the parent company is expected to be between RMB 331 million and RMB 366 million, up 63.06% to 80.23% compared with the same period last year.

Once this update is completed, with all major obstacles to the IPO fully cleared, does that mean the IPO will be accelerated?

In response, a reporter from the Huaxia Times called Dongguan Securities. When asked in an interview, the relevant负责人 said: “This is an update to the prospectus carried out in accordance with the normal update requirements of the exchange. In fact, when investors look at the company’s past updates, they will find that the company has been maintaining this kind of pace. At present, the company is following the normal update process and maintaining steady operations. As for the specific progress of the IPO, it still depends on the exchange’s arrangements.”

Standard operations

On March 31, 2026, Dongguan Securities updated its main board IPO prospectus on the Shenzhen Stock Exchange. In the view of professionals, this falls under the standard compliance process under China’s A-share registration-based system.

“Based on industry conventions, as financial enterprises, brokerages face a more rigorous IPO review process than ordinary companies. It is common for brokerages to update their prospectuses multiple times during the queue. Previously, brokerages in the queue have all carried out similar operations. In essence, these are routine actions to maintain the effectiveness of an IPO in the queue.” A senior investment banking professional said in an interview with a reporter from the Huaxia Times.

As can be seen, the focus of this prospectus update is to further improve four key core information items and optimize the IPO filing materials. The core highlights are concentrated in two dimensions: performance and equity structure—fully clearing the key obstacles that previously hindered the IPO process.

On the financial front, the prospectus data has been fully updated to include the full year of 2025 and the first-quarter 2026 forecast. The clear uptrend in performance is evident. In 2025, Dongguan Securities realized operating revenue of RMB 3.39B, up 22.99% year over year; attributable net profit to the parent company was RMB 1.25B, up 34.78% year over year, showing a significant improvement in profitability.

Based on preliminary calculations, the company expects total operating revenue for January to March 2026 to be between RMB 861 million and RMB 952 million, up 26.62% to 39.95% compared with the same period last year; net profit attributable to shareholders of the parent company to be between RMB 331 million and RMB 366 million, up 63.06% to 80.23% compared with the same period last year.

The company stated that the main reasons for the year-on-year changes in the expected total operating revenue and net profit attributable to shareholders of the parent company in the first quarter are: the one-way trading value of stock funds in both the Shanghai and Shenzhen markets has risen significantly compared with the same period last year, and it is expected that net brokerage business fee income and net interest income will increase compared with the same period last year.

On the equity front, this update clearly confirms Dongguan State-owned Assets’ absolute controlling position, fully resolving the equity disputes left over from the past, which was the biggest obstacle to the IPO. The updated data shows that Dongguan State-owned Assets holds an aggregate 75.4% through entities such as Dongguan Holdings and Dongguan Financial Holdings, achieving absolute control over Dongguan Securities; Jinlong Shares’ shareholding ratio has been reduced to 20%, down compared with before; and New Century Science & Education holds 4.6%.

In its prospectus, Dongguan Securities stated that going forward it will closely seize opportunities for the development of the Guangdong-Hong Kong-Macao Greater Bay Area, fully leverage its location advantages, and adhere to a “dual-wheel drive of featured wealth + technology investment banking.” It will provide comprehensive financial services around the needs of enterprises across their full life cycles, striving to build a boutique brokerage with distinctive features and clear advantages. With high-quality development as the core guidance, it will continuously optimize its product and service structure, expand diversified sources of income, and promote steady growth in all business performance indicators. On the basis of strictly adhering to the compliance bottom line, it will strengthen its capital strength, optimize its business layout, and work to become a national integrated financial services institution with strong capital, a reasonable structure, and stable operations.

Accelerating the IPO?

After this prospectus update, Dongguan Securities’ IPO status remains “accepted,” waiting for the Shenzhen Stock Exchange to issue further inquiries or to move to the board review. Some analysts believe this indicates that its IPO process has officially entered a phase of substantive advancement.

Looking back at the company’s IPO journey, Dongguan Securities has been on the road since its first IPO filing in 2015, with a journey that has lasted more than 10 years and has been fairly winding. After this update, the company has clearer equity, strong performance, and complete compliance information. This significantly reduces review uncertainty and also makes the market hold higher expectations for the pace at which the company advances its IPO.

On the pace of IPO advancement, industry views differ to some extent. A senior market participant took a cautious stance: “Dongguan Securities has no regulator-issued fixed timetable for the IPO. The core reason is that under the registration-based system, the IPO review timetable is affected by multiple factors, including the efficiency of replies to inquiries, the progress of regulatory inspections, the situation regarding supplementary materials, and so on. Also, as financial enterprises, brokerages’ review procedures are more rigorous than those of ordinary companies, so the review cycle is relatively longer. However, Dongguan Securities is not large in scale, so the impact of its listing on the market is limited.”

Another investment banking professional is more optimistic. He told a reporter from the Huaxia Times that, combined with the current situation and industry rules, the company is expected to receive the Shenzhen Stock Exchange’s first round of inquiries in the second quarter. If things go smoothly afterward, after passing the deliberation, it could achieve listing in the fourth quarter. The professional also reminded that if special circumstances arise during the review—such as supplementary materials or special inquiries—the timetable may be extended accordingly, which is also a normal occurrence in the A-share IPO queue process. Investors should view it rationally.

The “involution” trend in China’s brokerage industry is increasingly apparent. The commission battle has kept getting hotter; and leading brokerages, leveraging their scale advantages, are squeezing the survival space of smaller and mid-sized brokerages. Coupled with the difficulties of smaller and mid-sized brokerages—narrow financing channels and high funding costs—many market participants question the necessity for smaller and mid-sized brokerages to raise financing through listing.

A chief analyst at a listed brokerage in the non-bank sector said frankly in an interview with a reporter from the Huaxia Times: “The core of involution is ‘the gap in strength,’ and raising financing through listing is precisely the key pathway for smaller and mid-sized brokerages to make up for shortcomings in strength, improve governance, and build differentiated advantages. For smaller and mid-sized brokerages that have regional advantages, stable performance, and compliance that is controllable, raising financing through listing is not only meaningful—it is also the only viable path to break through the bottleneck and achieve sustainable development.”

“But for smaller and mid-sized brokerages with big performance fluctuations, compliance shortcomings, and a lack of core advantages, a blind sprint to listing may instead exacerbate operational pressure. They need to assess their own strength rationally and focus on core businesses and fill gaps before seeking to list again.” the analyst added.

Confronting risks

In the prospectus update, Dongguan Securities has clearly disclosed multiple potential risks, covering various dimensions including business operations, compliance control, and financial matters. These are key factors that could affect the company’s ongoing operations and its IPO process, drawing strong attention from investors.

First, the risk of a single business structure stands out. The prospectus shows that the company’s revenue is highly dependent on securities brokerage business. In 2025, revenue from this segment accounted for 48.42% of total revenue, continuing to rise from 41.61% in 2023 and 42.58% in 2024. Nearly half of revenue comes from securities agency trading business. The profitability model is deeply tied to the activity level of the A-share market, showing a clear “live by the weather” characteristic.

In stark contrast, the development of investment banking and asset management is weak. In 2025, the share of revenue from investment banking business was only 3.75%, and the share from asset management business was only 1.28%. Diversified business support is insufficient and the ability to withstand risks is relatively weak. If, in the future, trading volumes in the A-share market shrink and the market sentiment weakens, the pressure on the company’s performance to decline could be substantial.

At the same time, the brokerage business faces pressure from the continued downward trend in industry commission rates. In 2025, the company’s average commission rate fell to 0.197‰. Although this is slightly higher than the industry average of 0.164‰, the overall trend still shows a decline.

Second, there is the risk of high regional concentration. As a local brokerage rooted in Dongguan, the company’s operations are highly dependent on the local market, and its regional layout is notably concentrated.

From 2023 to 2025, the proportion of net brokerage fee income derived from securities agency trading business within Dongguan City was 57.46%, 56.15%, and 54.66%, respectively. While it declines slightly year by year, it still accounts for half or more. With the relaxation of policies for establishing new business outlets and the implementation of non-face-to-face account opening, the number of securities companies and securities business outlets entering Dongguan City has gradually increased, and competition in brokerage business within Dongguan City has intensified. If intensified competition within Dongguan City causes the company to lose high-quality customers or leads to a significant decline in the company’s market share in brokerage business within Dongguan City, it could have a major adverse impact on the company’s performance.

In addition, risks related to internal control, compliance, and finance are also worth attention. Among them, the company faces risks related to price fluctuations of trading financial assets and other debt investment. At the end of 2023, the end of 2024, and the end of 2025, the proportion of trading financial assets to the company’s own assets was 23.70%, 33.17%, and 30.01%, respectively. The proportion of other debt investments to the company’s own assets was 28.56%, 15.39%, and 18.05%, respectively. The value of the financial assets it holds may fluctuate with ups and downs in the securities market, which could have a material impact on the company’s profit and loss and net assets, and could also pose potential risks to the overall stability of the company’s financial position.

At the same time, the company’s asset-liability ratio is relatively high. At the end of 2025, according to the parent-company basis, the asset-liability ratio was 77.17%. A higher asset-liability ratio brings certain risks and impacts to the company’s production and operations, such as increased financial costs and reduced ability to withstand risks. If in the future national macroeconomic policies, the overall economic operating conditions, and the international economic environment undergo major changes that cause interest rates to rise, the company’s relatively high level of liabilities would result in it bearing higher financial expenses, thereby affecting its profitability, and it would also have an adverse impact on the company’s cash flow.

A reporter from the Huaxia Times noted that, in response to the relevant risks, Dongguan Securities’ prospectus does not explain the measures the company should take in the future.

In response, the relevant company负责人, in an interview, pointed out that the risks highlighted in the prospectus are inherent risks within the brokerage industry. In implementation, the company will take different phased measures according to its plans. Therefore, this part of content will not be written in a very specific way in the prospectus; instead, it will formulate phased measures based on the progress and actual circumstances of its work.

Dongguan Securities has clearly defined the business development main line in its prospectus: building on brokerage business as the foundation, it will strongly advance multiple businesses comprehensively, including large proprietary trading, large asset management, investment banking, and subsidiaries, to form a diversified business ecosystem. Rooted in Dongguan, with the Guangdong-Hong Kong-Macao Greater Bay Area as the core focus, it will actively expand into coastal regions with developed economies such as the Yangtze River Delta and the Bohai Economic Rim, thereby radiating across the country.

责任编辑：Ma Xiaochao 编辑：Xia Shenchа

【Source: Huaxia Times】