"Extending life" for 10 more years to go public! Dongguan Securities' first-quarter performance soars 80%, a final push for IPO?

Reporter Wang Zhaohuan from chinatimes.net.cn, Beijing

Recently, as brokerage firms’ annual reports are disclosed in large batches, Dongguan Securities has officially updated its main-board IPO prospectus on the Shenzhen Stock Exchange. This move has drawn widespread attention from the capital market.

As disclosed, this is the company’s 7th update since it was accepted for its 2023 IPO. The core focus is to supplement the latest financial data for full-year 2025 and the first quarter of 2026, and to improve information on shareholding and compliance, so as to ensure that the review work continues to move forward.

In 2025, Dongguan Securities recorded operating revenue of 3.386 billion yuan, up 22.99% year over year; net profit attributable to the parent company was 1.245 billion yuan, up 34.78% year over year, showing a significant improvement in profitability. Based on preliminary estimates, the company expects total operating revenue from January to March 2026 to be between 0.861 billion yuan and 0.952 billion yuan, 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 0.331 billion yuan and 0.366 billion yuan, up 63.06% to 80.23% compared with the same period last year.

After this update is completed and key obstacles to the IPO are fully cleared, does it mean the IPO process will be accelerated?

In response, a reporter from the Huaxia Times called Dongguan Securities. In an interview, a relevant responsible person said: “This is an update to the prospectus carried out in accordance with the normal update requirements of the exchange. Actually, 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 is still subject to the exchange’s arrangements.”

Routine operation

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

“From industry conventions, as financial institutions, brokerage firms’ IPO review processes are more rigorous than those of ordinary companies. It is normal to update prospectuses multiple times during the queue period. Brokerage firms that were previously in the queue have all carried out similar operations. Fundamentally, these are routine actions taken to maintain the effectiveness of being queued for an IPO.” A senior investment banking professional told the Huaxia Times reporter in an interview.

It can be seen that, in this prospectus update, the focus is to further refine four major core pieces of information, optimize the materials for the IPO filing, and the key highlights are concentrated in two areas: performance and the equity structure. This has completely cleared the key obstacles that previously hindered the advancement of the IPO.

On the financial side, the prospectus data has been comprehensively updated through full-year 2025 and the first-quarter 2026 results pre-announcement, and the clear momentum of high growth in performance is evident. In 2025, Dongguan Securities achieved operating revenue of 3.386 billion yuan, up 22.99% year over year; net profit attributable to the parent company was 1.245 billion yuan, up 34.78% year over year, demonstrating a significant improvement in profitability.

Based on preliminary estimates, the company expects total operating revenue from January to March 2026 to be between 0.861 billion yuan and 0.952 billion yuan, 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 0.331 billion yuan and 0.366 billion yuan, up 63.06% to 80.23% compared with the same period last year.

The company stated that the main reasons for the expected changes in total operating revenue and net profit attributable to shareholders of the parent company in the first quarter compared with the same period last year are: the one-way trading value of stocks and funds on both the Shanghai and Shenzhen markets increased significantly year over year. The company expects that net brokerage commission income and net interest income will also increase compared with the same period last year.

On the equity side, this update clarifies Dongguan State-owned Assets’ absolute controlling position, completely resolving the historical equity disputes—this being the biggest obstacle to the IPO. The updated data shows that Dongguan State-owned Assets, through entities such as Dongguan Holdings and Dongguan Financial Holdings, collectively holds 75.4% of the shares, achieving absolute control over Dongguan Securities; JInlong Co., Ltd.’s shareholding ratio has been reduced to 20%, down compared with before; New Century Sci-Tech Education holds 4.6%.

In the IPO prospectus, Dongguan Securities said it will, in the future, seize the opportunities of the development of the Guangdong–Hong Kong–Macao Greater Bay Area, fully leverage its geographic advantages, and adhere to the “dual-engine drive of distinctive wealth management + technology investment banking,” providing comprehensive financial services around the needs of enterprises across their full life cycles, and focusing on building a boutique brokerage with distinct characteristics and clear advantages. Guided by high-quality development, it will continuously optimize the product and service structure, expand diverse sources of income, and promote steady growth in various business indicators. On the basis of strictly observing compliance bottom lines, it will strengthen capital strength, optimize its business layout, and strive to build itself into a national comprehensive financial services institution with strong capital, a reasonable structure, and steady operations.

Accelerating the IPO?

After this prospectus update, Dongguan Securities’ IPO status is maintained as “accepted,” waiting for the Shenzhen Stock Exchange’s further inquiries or review for listing. Some analysts believe this indicates that its IPO process has officially entered a substantive advancement stage.

Looking back at the company’s IPO history, Dongguan Securities has been on the IPO application journey since its first filing in 2015. Its path to listing has lasted more than 10 years and has been relatively complicated. After this update, the company’s equity is clear, its performance is impressive, and its compliance information is complete. This significantly reduces review uncertainty and also raises the market’s expectations for the IPO advancement pace.

Regarding the IPO advancement pace, industry views differ to some extent. A senior market participant took a cautious stance: “Dongguan Securities has no regulator-defined fixed timetable for the IPO. The core reasons are that under the registration-based system, the IPO review pace is affected by multiple factors, such as the efficiency of responses to inquiries, the progress of regulatory inspections, and the status of supplemental materials. Also, as a financial institution, the review process for a brokerage firm is more rigorous than that of ordinary companies, so the review cycle is relatively longer. However, Dongguan Securities is not large in scale, and its listing would not have much impact on the market.”

Another investment banking professional was more optimistic. He told the Huaxia Times reporter that, based on the current situation and industry patterns, the company is expected to receive the Shenzhen Stock Exchange’s first round of inquiries in the second quarter. If things go smoothly, after examination and approval at the meeting, it may achieve listing in the fourth quarter. The person also cautioned that if special situations arise during the review process, such as requests for supplemental materials or special inspections, the timetable may be correspondingly extended. This is also a normal occurrence in the A-share IPO queuing process, and investors need to view it rationally.

With the “involution” trend in the brokerage industry becoming prominent, the commission war has continued to heat up, and leading brokerages are squeezing the survival space of smaller and mid-sized brokerages by leveraging their scale advantages. Combined with the dilemma faced by smaller and mid-sized brokerages—narrower financing channels and higher funding costs—many market participants have questioned the necessity for smaller and mid-sized brokerages to raise funds through listing.

A chief analyst at a listed brokerage firm outside the banking sector said directly in an interview with the Huaxia Times reporter: “The core of involution is ‘a gap in strength,’ and raising funds through listing is the key path for smaller and mid-sized brokerages to make up for their shortcomings in strength, improve governance, and build differentiated advantages. For smaller and mid-sized brokerages that have regional advantages, steady performance, and compliance that is controllable, raising funds through listing is not only meaningful, but also the inevitable path to achieve breakthroughs and sustainable development.”

“But for smaller and mid-sized brokerages with large fluctuations in performance, compliance shortcomings, and a lack of core advantages, blindly rushing to list may instead intensify operating pressure. They need to assess their own strength rationally, focus on their core businesses, and make up for weaknesses before seeking to list,” the analyst added.

Facing risks head-on

In this updated IPO prospectus, Dongguan Securities has clearly disclosed multiple potential risks, covering various dimensions including business operations, compliance controls, and financial matters. These are key factors that affect the company’s sustained operations and its IPO progress, and have attracted significant attention from investors.

First, the risk of an overly single business structure is prominent. The prospectus shows that the company’s revenue depends heavily on the securities brokerage business. In 2025, that business’s revenue accounted for 48.42%, continuing to rise from 41.61% and 42.58% in 2023 and 2024, respectively. Nearly half of revenue comes from securities agency trading. Its profit model is deeply tied to the activity level of the A-share market, and the “living by the weather” characteristic is obvious.

In sharp contrast, the development of investment banking and asset management businesses is weak. In 2025, the revenue share of investment banking business was only 3.75%, and the revenue share of asset management business was only 1.28%. Diversified business support is insufficient, and risk resistance is weak. If, in the future, trading volumes in the A-share market shrink and the market sentiment weakens, the company will face significant pressure from performance declines.

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‰, overall it still shows a downward trend.

Second, there is the risk of a relatively high concentration in the region. As a local brokerage rooted in Dongguan, the company’s operations rely heavily on the local market, with an obvious concentration in its regional layout.

From 2023 to 2025, the proportion of net brokerage commission income sourced from the securities agency trading business within Dongguan City was 57.46%, 56.15%, and 54.66%, respectively. Although it decreased slightly year by year, it still accounts for half of the picture. With the relaxation of policies on the establishment of business outlets and the implementation of non-face-to-face account opening, the number of securities companies and securities outlets entering Dongguan has gradually increased, and competition in the brokerage business within Dongguan has intensified. If the intensifying industry competition in Dongguan leads to the company losing high-quality customers or a clear decline in its market share in the brokerage business in Dongguan, it could have a major adverse impact on the company’s performance.

In addition, the company’s internal controls, compliance risks, and financial-related risks are also worth attention. Among them, the company faces risks related to changes in the prices of trading financial assets and other debt investment holdings. At the end of 2023, the end of 2024, and the end of 2025, the proportion of trading financial assets in the company’s own assets was 23.70%, 33.17%, and 30.01%, respectively; the proportion of other debt investments in the company’s own assets was 28.56%, 15.39%, and 18.05%, respectively. The value of the financial assets the company holds will fluctuate with ups and downs in the securities market, which may have a major impact on the company’s profit and loss and net assets, and may also bring potential risk to the stability of the company’s overall financial condition.

At the same time, its asset-liability ratio is relatively high. At the end of 2025, the asset-liability ratio based on the parent-company basis was 77.17%. A high asset-liability ratio will bring certain risks and impacts to the company’s production and operations, such as increased financial costs and reduced risk resilience. If, in the future, major changes occur in national macroeconomic policies, overall economic conditions, and the international economic environment that lead to interest rates rising, the company’s relatively high debt level will cause it to incur higher financial expenses and thus affect its profitability, and it would also be unfavorable to the company’s cash flow.

The Huaxia Times reporter noted that, in response to the relevant risks, Dongguan Securities’ IPO prospectus did not clarify future 대응 measures.

In this regard, the company’s relevant responsible person, in an interview, pointed out that the risks indicated in the prospectus are some risks inherent to the brokerage industry. During specific implementation, the company will adopt different phased measures according to its plans. Therefore, this portion will not be written in extremely specific detail in the prospectus, and it will formulate phased measures based on the actual progress and working situation.

Dongguan Securities has clearly defined the main line of business development in its IPO prospectus: based on the brokerage business, it will vigorously promote comprehensive development of multiple businesses, including large-scale proprietary trading, large-scale asset management, investment banking, and subsidiaries, to form a diversified business ecosystem. Rooted in Dongguan, and focusing on the Guangdong–Hong Kong–Macao Greater Bay Area as the core priority, it will actively expand into coastal regions with developed economies such as the Yangtze River Delta and the economic circle around the Bohai Sea, and thereby radiate across the whole country.

Byline: Ma Xiaochao Editor-in-chief: Xia Shenchà